Oral Answers to Questions

Ian Swales Excerpts

Thursday 22nd January 2015 Commons Chamber

[Claire Perry]

I have respect for the hon. Gentleman and for many of his campaigns, but I am amazed that he can stand up and represent a party that did so little for the railways over 13 years. He described the predecessors in his seat as a bunch of trainspotters. Instead, he should be congratulating this Government on their investment programme and on the new intercity express programme trains that will benefit his constituency.

[Ian Swales (Redcar) (LD)]

I welcome the recent announcements on rolling stock for the network, but looked in vain for news of a replacement for the ancient trains used on the Tees Valley line. Will the Minister look at that matter urgently so that the Tees Valley city region gets the upgraded trains that it needs and deserves?

[Claire Perry]

The hon. Gentleman is right to point out that there are many parts of the country, particularly in the north of England, where the rolling stock is simply not fit for purpose thanks to the franchise specifications let under the previous Government. We are looking at all specifications, including upgrading the inappropriate Pacers, which will be part of the franchising specification process he will see published in the next few weeks.

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[John Thurso]

As the hon. Gentleman will know, both Houses are sovereign, so we must make progress through dialogue and agreement. However, I am much encouraged by how the joint service for procurement was set up last year, and I believe that there is an appetite in both Houses to reach agreement. I will certainly do all I can to assist in that.

[Ian Swales (Redcar) (LD)]

I know that my right hon. Friend has extensive management experience in the hospitality industry. What constraints does he see in making this place efficient compared with his private sector experience?

[John Thurso]

I thank my hon. Friend for that extremely interesting question. I would observe that when one is appointed chief executive of an organisation in the private sector, one is in charge, one takes responsibility and one gets on with it. In this place and the other place, we are responsible to the Members, so it is necessary to have a structure that properly reflects that. One therefore tries to take the best bits of governance that one has learned from the private sector but use them in a way that serves the House and its primary purpose of legislation.

Rail Network (Disruption)

Ian Swales Excerpts

Monday 5th January 2015 Commons Chamber

[Mr McLoughlin]

There is unprecedented development on the railway network. I think that is absolutely vital, and I am very keen that a lot of the first-class pieces of engineering done by Network Rail continue to be done by Network Rail, along with the huge investment that we are making in the whole system.

[Ian Swales (Redcar) (LD)]

My constituents were caught up in the chaos on the east coast main line on the 27th, like so many others. They recall poor communication not just during their journey but in advance of it, for planning purposes. They were, of course, also caught up in the Finsbury Park chaos and held around Stevenage for anything up to two hours. What can the Secretary of State do to ensure that communication is improved and our public transport network is properly operational throughout holiday periods?

[Mr McLoughlin]

I do not want to keep on repeating myself. I have talked about the necessity of doing these big engineering projects over what is usually the less busy period, as opposed to creating the scale of disruption that would occur if they were done in the normal working week or at other times of the year. We will need to look at this; some of the suggestions from my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst) made that clear. On communications, I wholly agree with the hon. Gentleman: the communications were not up to scratch in any way, shape or form, and the whole industry has got to try to address that.

Oral Answers to Questions

Ian Swales Excerpts

Thursday 20th March 2014 Commons Chamber

[Mr McLoughlin]

I am sorry that the hon. Gentleman makes such a point, because I do not know whether he can get the shadow Chancellor to commit to investments such as those we are putting into this country’s road infrastructure. As I understand it, he is not allowed to make any commitments whatsoever. I am very glad not only that the Chancellor yesterday announced an extra £200 million to invest in our roads but that later today I will announce the allocation of the £140 million that I announced a few weeks ago to all local authorities. I hope that they will use the £140 million along with the £200 million announced yesterday to make significant improvements to our roads.

[Ian Swales (Redcar) (LD)]

2. What assessment he has made of the adequacy of public transport links to Durham Tees Valley airport.

[The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)]

My assessment is that public transport links to Durham Tees Valley airport are very poor. However, we stated in the aviation policy framework that we will work with airports, transport operators, local authorities and local enterprise partnerships to improve surface access to the UK’s airports.

[Ian Swales]

In the year to last March, the station at Durham Tees Valley airport had eight passengers—not per hour or per day, but in the whole year. Only one service a week stops there, cynically avoiding the costs of a real closure. This is a symbol of the long-term neglect of the area and its airport. Will the Minister require the airport operators to link their passenger terminal to proper public transport services, timed to serve their flights?

[Mr Goodwill]

I know that this is what is known as a parliamentary service, which does save the cost of closure, but given that the passenger numbers were 900,000 in 2006 and 161,092 in 2013, action on more than just public transport links will be required to ensure the airport’s future.

Inter-City Rail Investment

Ian Swales Excerpts

Thursday 9th January 2014 Commons Chamber

[Ian Swales (Redcar) (LD)]

I beg to move,

That this House has considered inter-city rail investment.

As well as London, the eight largest English cities have city deal status and another 20 are being agreed at present. I want to talk about rail travel between these city regions, especially those journeys that do not involve London. My speech will not be about HS2, except in passing, partly because that subject has already been aired at length, but also because journeys between the 29 city regions involve 465 possible trips, only 13 of which are directly covered by HS2. Those figures do not include Welsh or Scottish cities, but I am sure other Members may wish to comment on them.

If we look at past priorities for inter-city rail investment, we see that there has often seemed to be an assumption that the only thing people want to do when they get on a train is travel to or from London. Research shows that prioritising transport heavily on connections to a capital tends to suck economic activity into that capital. As Chris Murray, director of Core Cities, observed recently, this over-concentration is bad for the national economy in the long term. In contrast with other developed countries, such as France and Germany, the UK remains one of the most economically centralised countries in the world. The vast majority of significant companies and other institutions are headquartered in and around London.

London itself has major capacity issues, whether they be housing, schools, airports, local transport, water, sewage treatment or even land and labour. Immigration pressures from abroad or from elsewhere in the UK are felt heavily in London as it deals with its overheated economy. A London MP recently exemplified affordable housing in her constituency, it being defined as a two-bedroom flat costing £750,000. There is constant pressure for billions of pounds of taxpayers’ money to be spent addressing those capacity problems in the capital. Meanwhile, other areas, such as the one I represent, have all those assets freely available, including houses, none of which cost £750,000, surplus school places and capable people ready to take jobs.

The Government have a stated aim to rebalance the economy and I believe that inter-city rail investment can play a pivotal role in that endeavour. Others share my concerns. The former Business Secretary, Lord Mandelson, said recently:

“There are literally dozens of rail and public transport projects urgently needed across the country that would make a significant economic and social impact.”—[Official Report, House of Lords, 24 October 2013; Vol. 748, c. 1228.]

He also commented on the cuts to other inter-city services that accompany the HS2 proposals, including loss of service from Stoke, Stockport, Coventry and Wilmslow, and long journey times to Carlisle. The Institute of Directors reports that 80% of its members support increased investment in the existing inter-city network.

[Kelvin Hopkins (Luton North) (Lab)]

I commend the hon. Gentleman on what he has said so far. Does he not also agree that a spinal, dedicated rail freight route capable of carrying lorry trailers on trains and serving the north-east would have an enormously beneficial effect on the economies of the regions?

[Ian Swales]

I thank the hon. Gentleman for that intervention. I certainly agree with him and will mention rail freight later in my speech. He makes a powerful point which I know he has raised in the House before.

With excellent assistance from the House of Commons Library, I have conducted research on all the journeys between the English city regions, comparing fastest rail journey times against road miles as the best indicator of the actual distance between them. Many interesting facts emerge. The fastest journey times from nearly every single city region are on the lines to London. Average speeds range from 63 mph from the south coast to well over 100 mph from many other parts of the country.

For journeys between cities outside London, however, the overall fastest miles per hour speeds are in the 20s, and many are in the 30s and 40s. Fastest journeys can involve absurd dog-legging through London—for example, Cambridge to Sheffield, Ipswich to Newcastle and Swindon to Leicester—and journeys between the 29 key city regions can involve as many as four changes. Those figures are the consequence of past investment focused on hub-and-spoke systems based on London, and of under-investment on other routes, which has helped to concentrate economic and administrative power in the capital.

The record of the previous Government was poor, with too much micro-management but only nine miles of electrification investment. Fares went up by 66%, but subsidies went up £1.7 billion as well. Journey times are slower than they were 15 years ago, and 61% of UK businesses are concerned that the UK’s transport infrastructure lags behind international competitors.

I welcome the steps that this Government are taking. A good example of the work needed is the Milton Keynes to Oxford route. At 22 mph, it is one of the slowest possible journeys, so the Government’s decision to revive the east-west route to join those two city regions is very welcome and will provide the connectivity to help release potential. However, the Milton Keynes to Cambridge route, at 24 mph, will remain one of the slowest in the country. Other examples of very slow connectivity are the routes from Leicester to Coventry, Bournemouth to Bristol, Southend to Ipswich, Sunderland to Darlington—I could go on.

It is certainly welcome that the east coast main line is at last due to get modern rolling stock. Despite being one of the most profitable lines in the country, botched franchising deals have led to a sense that it is somehow a basket case, with consequent high fares and old trains. Passengers richly deserve the investment in new rolling stock and, as a regular user, I suppose that I should declare an interest.

It is worrying that a briefing I received for today’s debate from the Rail Delivery Group, a consortium of Network Rail and the train operators, states that the east coast line

“essentially serves two main destinations…Leeds and Edinburgh”.

It makes no mention of services that terminate in Newcastle or Aberdeen, of the 750,000 people in the Tees valley served by Darlington, or of numerous other towns and cities served directly or through connections. Sadly, the geography of many of the decision makers seems to get sketchy outside the M25.

One area that I want to highlight is the wide corridor of national importance through south Yorkshire and south Lancashire. It contains four of the six biggest cities in England, as well as many significant towns and other cities, and it is home to more than a quarter of the UK’s small and medium-sized businesses. Although it is already an economic powerhouse, it could be so much better with proper inter-city rail investment. Our forefathers recognised its importance by building one of the first cross-country motorways, the M62, to link Hull and Liverpool. How is the rail service through the region? The answer is, very poor. The 120-mile journey from Hull to Liverpool takes 30 minutes longer than the 214-mile journey from Hull to London, which means that it is at exactly half the speed. The vital commercial centres of Leeds and Manchester are joined by a service that runs at only 46 mph, whereas they both already have services to London at more than 100 mph.

Slow train times lead to far more people travelling by road, which in turn has an impact on train passenger numbers. They also give the appearance of low demand: no doubt that affects perceived investment, but this is surely a classic case of “Build it and they will come”. Getting people, and of course freight, off the roads also has major environmental benefits.

I welcome the many improvement projects contained in the northern hub initiative and the associated forecast of growth in passenger numbers, but they fall short of providing the kind of radical improvements that could transform the economy of the region. We need speedy train services to link our northern cities to each other, not just linking them separately to London and the south.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

My hon. Friend is making a very strong point, but does he agree that the issue relates not only to the north, but to the south-west and the west country? Frankly, we have not had the kind of investment in our railways that we would like.

[Ian Swales]

I absolutely agree. I look forward to the speeches of other hon. Members who have stayed late on this Thursday to hear more about other regions. I know that my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert) is likely to talk about the south-west.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I congratulate the hon. Gentleman on securing this important debate. With hon. Members piling in to put their own inter-city and other rail services on the table, may I make a plea for the Brighton main line? We need more capacity, with a second line from Brighton to London so commuters do not get stuck in Brighton, as they do on the many occasions when that line is not operating.

[Ian Swales]

I thank the hon. Lady. I am sure the Minister is logging the various bids that are being made.

My area of the north-east has good journey times to London, but very poor journey times to other places. Is it right that it takes longer to get from Darlington to Manchester on a single train than it takes to get to London? The Secretary of State for Business, Innovation and Skills was stunned recently when he discovered how long he had to spend on the train when travelling from Liverpool to Darlington. Ironically, he was making the trip to be present at the inauguration of the new inter-city train factory at Newton Aycliffe, which is hugely welcome in my part of the world.

Rail investment is not just about passengers, but about freight, as the hon. Member for Luton North (Kelvin Hopkins) mentioned. It was good to see the recent but long-overdue investment by the Government to enable modern-sized containers landing at Teesport to join the east coast main line. However, a large modern port needs good connections to a wide hinterland and, again, the cross-country links are very poor. If such a container was destined for Preston, which is less than 100 miles away, it would have to go via Birmingham, so poor are the trans-Pennine links.

[Kelvin Hopkins]

I am pleased that the hon. Gentleman is talking about freight, even though this debate is essentially about passengers. Some 80% of freight in Britain and across the channel goes by lorry, not by container. Containers are splendid things and lorries are the problem. Do we not need to be able to get lorry trailers on to trains? To do that, we need a dedicated route with the height and gauge capacity to deal with it.

[Ian Swales]

The hon. Gentleman makes an excellent point. I am certain that the current trans-Pennine links would also be inadequate for that solution. I agree with what he says. This matter needs to be considered seriously. What is the point of investing heavily in rail freight handling in the Trafford area of Manchester, which is going to happen, if there is no easy route to the major ports on the Tyne, the Tees and the Humber? The ability of east coast ports to collect goods from northern businesses for export and to deliver imported goods and materials to them by rail should be a key economic driver.

As part of rebalancing the economy, the Department for Transport should be accelerating inter-city investment in the regions for three reasons. First, the economic benefits of constructing that infrastructure would be felt most strongly in the regions concerned. Secondly, the manufacture of infrastructure materials tends to be concentrated away from the south-east. An example is Tata Steel’s construction beam mill in my constituency. Finally, the provision of good infrastructure tends to lead to more economic development in the local region.

Rail investment should be used proactively to drive our regional economies, not just reactively to address overcrowding. Quicker travel would make existing businesses more efficient. Better city links would allow regionally based businesses to set up and expand more easily, and to take on London-based competitors.

As Jim O’Neill, the chair of the City Growth Commission, observed in a recent article in The House magazine entitled “Going for growth”,

“We already know that around the world, mid-tier cities generate higher economic growth relative to their populations.”

In the same magazine, Alexandra Jones, the chief executive of the Centre for Cities, noted that

“most of the UK’s largest cities…punch below their economic potential.”

The underperformance in the UK is due partly to our transport infrastructure. The excessive focus on London recently led the Secretary of State for Business, Innovation and Skills to say that London

“is becoming a giant suction machine draining the life out of the rest of the country”.

In closing, I want to emphasise the following points. A business person’s time is just as valuable when they are travelling from Newcastle to Bristol or from Norwich to Liverpool as it is when they are travelling to or from London. It should be possible to run an effective, competitive national or international business from any of our city regions, not just from London. The Government have a key aim of rebalancing the economy. I commend the work that is being done on city deals and through the regional growth fund. The Department for Transport needs to take up the challenge and play its full part in that rebalancing. After decades of under-investment, I welcome the renewed focus on rail investment that the Government are driving. I hope the Minister will explain how the Department’s inter-city rail investment policy will meet the ambition of making the whole economy more successful, and not just that of London and the south-east. I look forward to his response.

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[Ian Swales]

As we are all bidding for electrification, let me point out that the Grand Central service from Sunderland to London runs on a non-electrified line north of Northallerton through Eaglescliffe and Hartlepool.

[Kelvin Hopkins]

I think we are well behind the rest of the world in electrifying our rail routes and we need to do a lot more. It is happening, but it is going to take some time yet. We should have done this years ago.

Hon. Members have mentioned some of the corridor routes I intended to speak about, such as that from Liverpool, Manchester and Leeds to York. A modern, electrified fast service linking those great cities would be a tremendous boon to the north. I am obviously not speaking on behalf of Luton here; I am speaking about my interest in railways and in the country in general.

A second electrified route should link York, Sheffield, Derby, Birmingham, Bristol, Exeter, Plymouth and Penzance, which would provide a real chance for growth, particularly in the south-west, as my hon. Friend the Member for Plymouth, Moor View said. Those are two important corridors, and I could provide more detail on others. Fast electrified services would greatly benefit the relevant regions.

In a rail debate on 31 October I set out a scheme for upgrading and improving the east coast main line from London to Edinburgh. I shall not go over the detail again now, as I want to reserve my time to deal with other schemes, other than to say that this is another important investment that should go ahead to improve capacity and speed on the east coast.

I want to focus today on a particular scheme. I have mentioned it before, but I want to re-emphasise its importance. I believe it would be a major advance to upgrade the Birmingham, Snow Hill to London line, which passes through Solihull, Leamington Spa, Banbury and other towns, on which only a handful of trains currently run each day to and from Marylebone. The line also runs directly to Paddington—a much more useful London terminus that links directly with Crossrail and thus to the City. Snow Hill is in the centre of Birmingham and easily accessible to the business district.

There is, however, a much more compelling and exciting possibility for this route. If it were to be electrified, a simple link to Crossrail at Old Oak Common would provide direct passenger services between the centre of Birmingham and the City of London and, indeed, Canary Wharf. Business travellers would have available direct travel from city centre to city centre with no changes required, thus saving time and inconvenience. But there is more: the electrified Snow Hill to London line could also branch off at Greenford to join Crossrail going west, thus providing a direct service from Birmingham city centre to Heathrow. The electrification of that line and those two links with Crossrail would together cost no more than £500 million.

There is still more. The Snow Hill line has a branch at Leamington linked to Birmingham airport, which opens up the possibility of direct, non-stop electrified 125 mph services between Birmingham and Heathrow airports, as well as a direct link between Birmingham airport and the City of London via Crossrail. A journey time of one hour between the airports would be a boon to both of them, making Birmingham effectively a satellite of Heathrow and possibly removing some of the pressure from the growth of passenger traffic there, as well as being advantageous to workers in Birmingham.

I believe that the scheme would be enormously beneficial economically at both ends of the route. It would breathe extra life into the economy of the west midlands, and it would take a bit of pressure off London. It would also be helpful to services going further north. It would be possible to travel to the airport from Birmingham New Street and on to that route directly as well. There are numerous exciting possibilities, provided that the whole line is electrified and upgraded. Even now, it would be capable of 125 mph services, which I think would be sufficient for the journeys to which I have referred.

I urge the Minister, Opposition Front Benchers and Network Rail to give serious thought to my proposal. It is not just my own idea; it is based on detailed advice from experienced railway engineers. It would work, it would be easy to construct, and it would bring great benefits at modest costs. I commend it to fellow Members, and especially to those on both Front Benches.

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[Martin Vickers]

I certainly agree with the hon. Gentleman and I think that even people who were connected with producing the Beeching plan have since acknowledged that the closure of the east Lincolnshire line was a marginal decision at the time and certainly in today’s climate it would not have been closed. Unfortunately, however, at various points that line has now been blocked off and it would take billions of pounds to reinstate it.

I was mentioning the services on the Lincoln-Cleethorpes line provided by a single unit. When passengers get on the conductor says. “When we reach Market Rasen, passengers will have to stand. Please make sure that all seats are clear.” East Midlands Trains acknowledges that the service it provides with that single unit is inadequate, but apparently there is such a shortage of units that it is unable to improve on it.

The Government have an excellent record on electrification. Electrification of the route from Manchester to Sheffield is edging nearer and the possible extension through to Doncaster is being considered. If that becomes a reality, which it must, then completion of the final 50 miles into Immingham, Grimsby and Cleethorpes must surely be worthy of inclusion.

Immingham is a major centre for railways; indeed, it was the railways that built it. It was a creation of the Great Central Railway just over 100 years ago in 1912. Today, measured by tonnage, around 25% of the freight moved by rail starts or ends its journey in Immingham, much of it of strategic importance—oil, coal and the like. That, together with the growing potential for passenger traffic, must make a case for, at the very least, a feasibility study into the viability of electrification of the final section of the south Trent-TransPennine line, the Doncaster to Immingham and Cleethorpes section.

Despite considerable capital investment over recent years the main route from Cleethorpes to Doncaster, which covers just 50 miles, takes 70 minutes. We must do better than that, particularly since we describe the trains on that route as TransPennine Expresses.

In this afternoon’s earlier debate on rural communities I heard my hon. Friend the Member for Gainsborough (Sir Edward Leigh) refer to the Saturdays-only service from Sheffield through Gainsborough and Brigg to Cleethorpes. This line was the Great Central main line and yet it has come to this—a once-a-week service. It provides a shocking service not only for my hon. Friend’s rural community, as he said, but for the industrial centres around Immingham and Grimsby and for the east coast premier seaside resort of Cleethorpes.

[Ian Swales]

I am sure that it will be no consolation to my hon. Friend that I have just done the maths in my head and discovered that the rest of the trans-Pennine service is no quicker than the service he has just described.

[Martin Vickers]

I have experienced that full journey on a number of occasions, and I have to agree with my hon. Friend on that.

I was describing the Saturdays-only service on the Gainsborough to Cleethorpes line. It begins its journey in Sheffield. I believe that that service illustrates the need for more flexibility in the franchise system. Northern Rail operates the service and, because of the type of services it operates, it is highly dependent on public subsidy. I would have thought, however, that if it had any sort of commercial drive behind it, it would see the possibilities in that route. It is already running a train to Cleethorpes on a Saturday, and it would surely be even more viable to run the service on a sunny summer Sunday as well. There should be some incentive to try to expand the market in that way.

My constituency contains 10 railway stations, the largest port complex in the country and an international airport, yet it has no trains to London. It does not even need investment to provide such a service; it just needs the Minister’s say-so. It just needs him to insist on it being part of the new east coast franchise, or to give the go-ahead to one of open access providers such as Alliance Rail, which is currently exploring the possibility of providing such a service.

The debate pack states:

“Inter-city rail investment covers a wide-range of projects, including electrification, line enhancements, service improvements and new rolling stock.”

My constituents would be happy with just a little progress under each of those headings. I should like to draw the Minister’s attention to one urgent enhancement that is needed on the east coast main line, which is plagued by the wires being brought down in high winds. I know that the Department has committed £1.2 billion to transform the line, but I am not aware that the upgrading of the electric wires is included in that. My understanding is that a relatively modest investment in certain sections of the line could deal with the problem to some extent.

There are electrification plans for the Great Western line, which provides services into Wales, and the northern hub will greatly enhance services in the north-west. My hon. Friend the Member for Redcar has described the needs of the north-east. My plea is, of course, for northern Lincolnshire and the Humber region in general. As I have said, the area has great economic potential, but if we are to maximise that, we need better rail and other transport connections. We need to close down the arguments about nationalisation, even if only in the context of the east coast main line. Privatisation has revitalised what was a dying industry. Let us also get on with HS2. The Cleethorpes to Manchester services run via Meadowhall, which would provide our link into HS2. However, that 70-mile journey to Meadowhall currently takes about 90 minutes. My plea is for direct services to London—an absolute necessity—and for a feasibility study into the electrification of the final section of the south TransPennine line between Doncaster and Immingham, Grimsby and Cleethorpes.

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[Sheila Gilmore]

I suspect that the quiet coach operates to a large extent as a business class. Perhaps operators should consider expanding the number of those coaches. Many people want to use that time on the train—whether it is two hours, three hours or more—productively, even if they are only recharging their batteries and reading a book or whatever. If we are serious about the environmental advantages of rail over air, we need to make that journey as productive and as comfortable as we can, and also to speed it up. The big advantage of HS2 in Scotland would be a cut in journey times, even without the high speed rails reaching us. The city centre to city centre advantage of HS2 is huge, and it works both ways. For example, 11% of employment in Edinburgh, even after the recession, is in the financial service sector. The links from Edinburgh to other financial centres are important. If we are to continue to be the headquarters of some very important financial institutions, rather than a sub-office of somewhere else, it is just as important that people can come to us as it is that we can go to them.

[Ian Swales]

The hon. Lady mentions HS2, so I ask this question in a spirit of genuine inquiry, because I only know the figures for Newcastle. How much will HS2 enable trains from Edinburgh to save time? Does she think a similar time could be saved by investing in the straight and relatively flat current east coast main line, as referred to by the hon. Member for Luton North (Kelvin Hopkins)?

[Sheila Gilmore]

My understanding is that when phase 2 is in place, we could save a full hour—perhaps slightly more—of the journey time. As we are talking about a long time scale, I am not averse in any way to looking at ways of improving the speed on existing rails. One thing East Coast has done, which is helpful, is introduce a train that leaves Edinburgh early in the morning and arrives in London at a time that allows people to attend meetings. It does that by having fewer stops, so there is always a trade off. By only stopping at Newcastle and then coming straight through, it has shaved off time. The only downside is that the train departs very early in the morning. We are privileged here in the House of Commons. As we go through until 10 pm on a Monday night, we do not start work at 10 am, which would be difficult.

Leaving aside the whole HS2 debate, we welcome the fact that intercity lines in other parts of the country are receiving significant public investment for electrification, new rolling stock and so forth. Of course, it is important to emphasise that all that investment is public and coming from the taxpayer. That fact was reinforced last month when the Office for National Statistics announced that it would reclassify Network Rail as a central Government body from September. That is an acknowledgement that it is not outwith the Government.

Part of the promise of privatisation was that it would generate investment, but it has not done so. We must be realistic about that. What about the level of private investment in other inter-city routes following the Government’s decision to prioritise the franchise competition for the east coast? I am sure that Members will remember that under the Government’s initial franchising timetable, a new contract for the west coast main line was due to start in October 2012, with Great Western starting in April 2013 and east coast in December 2013.

After the debacle of the west coast bidding process, a new timetable was announced last March. The east coast main line, which was previously last in the queue of those big franchises, was brought forward so that it would be let before April 2015. As the Government accepted the recommendations of the reports produced after what happened with west coast that only one major franchise should be dealt with at a time, that was only made possible by giving the current operator of the west coast main line—Virgin—a four-and-a-half-year franchise extension to April 2017. The operator of the Great Western line, First, was given a two-and-a-half year extension to September 2015. That is 77 months of extensions between the two operators.

Ministers who prioritised the east coast franchise and justified it by referring to the Brown review are presumably reiterating their belief that competition in the bidding process should drive private investment. Although franchise competition might achieve that, franchise extensions clearly do not. The Government have lost any bargaining chip they had in the process. Having made that set of decisions, they had no option but to negotiate with the existing operators. The only bargaining chip Ministers could use would be to threaten to call in East Coast’s parent company, Directly Operated Railways. The operators know the Government’s reluctance to do that and the very fact that they want to extract the east coast franchise from DOR shows that, quid pro quo, they would not want to put the other routes into DOR’s hands. That means that competition is effectively absent.

The companies have no incentive to invest during the remaining time for which they are operating the routes and have every incentive to demand significant subsidies. The extensions are likely to cost us, the taxpayers, dearly. In 2011-12, Virgin paid the Department a premium of £165 million and First Great Western paid £110 million. Will the Minister confirm that following the agreement of the extensions, payments of such an order are unlikely to be made? Perhaps he could confirm what sort of payments he anticipates. Will the Minister also confirm that apart from the roll-out of wi-fi on First Great Western, which we would have expected from any operator, the two extensions offer no improvement for passengers?

My key contention is that if the east coast franchise had not been prioritised, those extensions would not have been necessary and the competitions for the west coast and Great Western franchises could have been held much sooner had the Government wanted to pursue them.

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[Lilian Greenwood]

I will return to the east coast main line in a few moments.

Electrification of the Great Western main line, which has come up several times today, is a case in point. After pausing the project in May 2010, electrification to Newbury was announced in November that year, but the project’s extension to Cardiff was not announced until March 2011. Ministers said then that the line to Swansea would not be electrified, and it was not until they faced further pressure that, over a year later, they agreed that the route to Swansea would be electrified after all. In other words, thanks to the Government’s prevarication, a project initially announced in July 2009 was not confirmed until three years later. Given the importance of bringing forward infrastructure projects to deliver sustainable economic growth, even a Tory-led Government can surely do better than that.

There has been a similarly sorry tale in rolling stock procurement. In March 2011, the Prime Minister met the chairman of Bombardier and said that he was

“bringing the Cabinet to Derby today with one purpose – to do everything we can to help businesses in the region create the jobs and growth on which the future of our economy depends”,

but just four months later, Bombardier announced 1,400 job losses as a result of his Government’s decisions. Even after this debacle, there was an unacceptable two-year delay before financial close was reached on the contract. The Public Accounts Committee said recently that it was

“sceptical about whether the Department has the capacity to deliver the remainder of the programme by 2018.”

After the Government’s failure to keep HS2’s cost under control and the collapse of rail franchising on their watch, it is difficult to have faith in the political leadership of the Department. The failure of the franchising system has cost the taxpayer at least £55 million, and the Government’s refusal to consider Directly Operated Railways has left civil servants in an exceptionally weak bargaining position when agreeing direct awards. Under the terms of the Great Western contract extension, FirstGroup will pay only £17 million in premium payments next year, compared with £126 million in 2012-13. Investment has been delayed and orders have been put on hold, hurting the supply chain and threatening jobs and skills.

At a time when Ministers have been overtaken by problems of their own making and the Department is struggling to get essential projects out of the sidings, it is remarkable that the Government’s top priority is selling off the east coast main line franchise before the next election. I commend my hon. Friend the Member for Edinburgh East (Sheila Gilmore) and the hon. Member for Brighton, Pavilion (Caroline Lucas) for their persistence in raising this question with Ministers. Since 2009, East Coast has gone from strength to strength. It has delivered a new timetable, achieved better punctuality and passenger satisfaction scores than the previous failed private operators, won multiple industry awards and developed a five-year plan for improving inter-city services on the line.

The casual reader will be forgiven for not getting this impression from the Government’s franchise perspective, but thanks to a leaked draft of that document, we know that positive references to the company’s performance were removed at the last minute, as Ministers desperately tried to rewrite history. But East Coast’s commercial performance speaks for itself. By February 2015, it will have returned almost £1 billion to the taxpayer in premiums, and it has invested every penny of its profits—some £48 million—back into the service, but under the Government’s plans, that money would be split between private shareholders instead.

Before Christmas, East Coast announced that half its fares to London would be frozen and that most of its fares would be cut in real terms in 2014. Will the Minister tell us how many private operators have announced a cut in the average cost of their fares? The truth is that the Government have allowed train operating companies to raise prices by up to 5%—more than double the rate of inflation—and the average season ticket is now 20% more expensive than it was in 2010. So at a time when passengers are facing a cost-of-living crisis, why are the Government seeking to abolish the publicly owned operator that is cutting the cost of fares?

It is difficult to resist the conclusion that East Coast has risen to the top of the Secretary of State’s to-do list because it has proven itself as a successful alternative to franchising, and that is why Ministers are so determined to push it out the door before the election.

We know from written answers that the public cost of refranchising could reach £6 million, along with other wasted millions lost due to the west coast shambles. All this money could have been spent instead on alleviating the cost-of-living crisis or investing in the railways. As it stands, the refranchising of East Coast represents the triumph of ideology and short-term political calculation over passengers’ best interests and a wilful disregard for public resources.

I urge Government Members, particularly Liberal Democrat Members who before the election were opposed to selling off East Coast, to think again and halt this un-needed, unwanted and wasteful privatisation. The priority must be delivering a fair deal for passengers and ensuring that the essential projects that so many Members wish to see are completed.

[Ian Swales]

The hon. Lady makes an interesting point about East Coast. During the 13 years of the Labour Government, how many times was the franchise renewed and did the Government consider taking it into state ownership?

[Lilian Greenwood]

I would accept that we were perhaps too accepting of the overall franchising model. There were many problems on the railways that the Labour Government had to sort out, but we are at least prepared to look at alternatives, which is more than can be said at the moment for the Conservatives and Liberal Democrats. With all the inter-city franchises expiring in the next Parliament, we are right to look again at the best way to structure the railways to deliver real value for passengers and taxpayers.

My message to the Government is clear: “Call off the privatisation, get the Department in order, and make sure that essential investments in our inter-city lines are kept on track.”

--- Later in debate ---

[Ian Swales]

I thank all Members who contributed to the debate. We had a wide-ranging discussion and I learned more about train design than I probably ever wanted to. More importantly, we learned about the importance of inter-city rail investment for economic development. That was the thrust of my speech, and my view has been supported by many others across the House. I thank the Minister for the tone and the content of his response. He should feel emboldened by the cross-party enthusiasm for investment in our rail system. More power to his elbow, and I hope we hear of a lot more plans in the future.

Question put and agreed to.

Resolved,

That this House has considered inter-city rail investment.

Draft modern slavery Bill (Joint committee)

Resolved,

That this House concurs with the Lords Message of 18 December 2013, that it is expedient that a Joint Committee of Lords and Commons be appointed to consider the draft Modern Slavery Bill presented to both Houses on 16 December 2013 (Cm 8770), and that the Committee should report by 10 April 2014.

Ordered,

That a Select Committee of seven Members be appointed to join with the Committee appointed by the Lords;

That the Committee shall have power–

(i) to send for persons, papers and records;

(ii) to sit notwithstanding any adjournment of the House;

(iii) to report from time to time;

(iv) to appoint specialist advisers; and

(v) to adjourn from place to place within the United Kingdom;

That Fiona Bruce, Michael Connarty, Mr Frank Field, Fiona Mactaggart, Sir John Randall, Mrs Caroline Spelman and Sir Andrew Stunell be members of the Committee.—(Mr Gyimah.)

Greener Road Transport Fuels

Ian Swales Excerpts

Tuesday 15th October 2013 Westminster Hall

[Ian Swales (Redcar) (LD)]

It is a pleasure to speak in the debate. I congratulate my hon. Friend the Member for Southport (John Pugh) on securing it and giving it an imaginative title, which allows us to range over the subject with abandon.

There is an important distinction between greener transport fuels and making transport greener, and I think that my hon. Friend made several points about the latter issue. There is no doubt that vehicle manufacturers and many others, such as fuel manufacturers, have contributed to an enormous reduction in the amount of fuel used for road transport. The car that I drive gets more than 60 miles to the gallon, which would have been unthinkable when I was tinkering with cars in my early 20s. We have heard about the possibility of switching fuels, but although liquefied petroleum gas may reduce fuel use, it is, as its name suggests, a fossil fuel.

I want to talk about fuels that I think of as greener than fossil fuels. There are three basic sources: liquids, gases and electricity. The important thing is to think about where they come from, and many contributions today have been about that. As my hon. Friend said, there are many sources of electricity, and some could well be more polluting than putting petrol in the car. For example, electricity may be generated in a coal-fired power station, then go down a line with the associated line losses, and into a car that is plugged in, but that is an incredibly inefficient way to fuel a vehicle.

An important point about electric cars is where the electricity comes from. Just last week a car went all the way across Australia entirely on solar power. Unfortunately, we do not have the weather here to see that as a long-term solution, but at least it proved that it is technically possible. The journey was 2,000 miles in six days, so that was pretty good mileage. Electricity is clearly an option for greener fuel.

There are gas possibilities, of which hydrogen is the most obvious. The subject is bedevilled by different views of science, statements from NGOs and so on. In an intervention, hydrogen was linked to crops, but the biggest source of hydrogen in my constituency is the ethylene cracker. Plastics are made by extracting hydrogen from gases, essentially, and there is a hydrogen surplus in Teesside, which comes entirely from the petrochemical industry—not from crops at all.

There are many sources of hydrogen, and the most likely one in future is surplus electricity from renewable electricity generation. It is technically fairly simple to use surplus electricity from wind turbines, for example, to generate hydrogen, which could become fuel for vehicles. There are many technical possibilities for hydrogen generation, without necessarily using crops. Hydrogen is an incredibly powerful fuel.

It is an amazing fact that splitting a water molecule into hydrogen and oxygen gives the fuel that sent rockets to the moon. It is necessary only to recombine them, and that can send rockets into space; it is the perfect fuel because it produces water again as a by-product. Hydrogen must be on the long list of future fuels for that reason, if no other.

There are many liquid biofuels, some more controversial than others. One is used cooking oil, which my hon. Friend the Member for Birmingham, Yardley (John Hemming) is keen on. That is clearly a good environmental use for oil that would otherwise be thrown away. However, the amount of what is called used cooking oil throughout Europe is many times the amount actually used for cooking.

Imports of palm and other oils, which the hon. Member for East Lothian (Fiona O'Donnell) mentioned, are driven partly by the market for so-called used cooking oil. A great deal of policing of the source of the material is needed, because there are loopholes and many traders who run rings round the industry. Equally, however, many small-scale collection facilities produce fuel, and they have a role in the future.

I want to talk now about crop-based biofuels. I must declare an interest, because Europe’s largest bioethanol plant is in my constituency. I challenge the idea that we can have either food or fuel. We are still paying farmers in this country not to grow things—including 6 million tonnes of sugar beet, which is potentially a fuel for a bioethanol plant. The idea that the issue is all about land does not always stand up to examination. There are many political, economic and agricultural reasons why there are food shortages in the world, and, when overall world land use is considered, land is quite far down the list. Perhaps that is controversial.

[Mr Goodwill]

The hon. Gentleman should be aware that the current EU set-aside requirement is zero. When land is set aside it is usually, currently, because of some environmental arrangement that the farmer has entered into. The amount of set-aside in the UK is dramatically less than it was 10 years ago.

--- Later in debate ---

[Ian Swales]

I thank the Minister for that response. I recognise his special expertise in this area.

I want to talk about the sustainability of the bioethanol made in my constituency. It is made from animal-feed wheat, not human-grade wheat, and at the other end we get three products: bioethanol; carbon dioxide, which is captured for use in the food and drink industry in a separate plant; and crucially, high-grade animal feed. All the protein in the wheat ends up in high-grade animal feed, which is highly prized in the agricultural industry, to the point that there are times when those at the plant tell me that it is an animal feed plant with a bioethanol by-product, rather than a bioethanol plant with an animal feed by-product.

The high-protein animal feed replaces imports mostly from South America, mostly based on soya and mostly grown on former rainforest land. Far from being unsustainable, that high-grade animal feed, a by-product of the bioethanol business, is in effect replacing the use of rainforests in South America. A cradle-to-grave view of the sustainability of all greener fuels needs to be taken, because there are an awful lot of misconceptions about how some of the businesses work.

[Mr Goodwill]

My hon. Friend will be aware that the by-product from those plants is suitable only as ruminant feed. Much of the grain in South America is produced to fuel the chicken and pork industries, which seems to be the big demand in the developing world.

[Ian Swales]

I recognise that the Minister has a special expertise, but I know that there is demand in the marketplace for the feeds, which form only part of the overall mix. Having enjoyed the product of a ruminant in my cup of tea earlier this afternoon, I know that they have a place in the final food chain.

[David Mowat]

I am not totally certain that I understood the thrust of what was said about rainforests. Was the point being made that it is good to convert rainforest into soya for use in transport?

[Ian Swales]

No, absolutely not. My point was that the high-grade, high-protein animal feed, which the by-product feed replaces, is typically grown in South America, so the by-product feed reduces the demand for soya-based proteins, mostly from South America. There is a green chain. The situation is not as simple as people say.

The Government have had a policy for putting biofuels into both diesel and petrol for years. Starting with diesel, they set the targets and people invested large amounts in chemical plant, but all the early investors went bust because the Government kept moving the goal posts—surprise, surprise, the same has happened with bioethanol. The £300 million that people invested in the plant in my constituency has largely gone and the plant recently changed hands for a lower price. Why? Because the Government have not delivered on the renewable transport fuel obligations they said they would when the investment case was originally made.

The hon. Member for Southport mentioned an important point: we need certainty for green technologies. If we are asking people to invest large amounts of capital, we cannot keep changing our minds. Changing one’s mind leads to an industry heavily dependent on imports of green products. Unless we give investors certainty about the goal posts and the environment into which they invest, they will not invest anymore. Most of the early investors in such technologies have done badly and that is mostly due to Government policy.

For the same reasons, we need to ensure at EU level that targets for the proportions of biofuel in diesel and petrol are separate. If we allow an overall target and let oil companies play games over how much biofuel they put into each one on any given day, the people who have invested heavily in capital plant will have years of feast and years of famine, as the oil companies play their games, and will eventually exit the market. Again, traders will be left to pick up the pieces.

[Graham Stringer]

The hon. Gentleman is making an interesting speech and I have learnt a lot from it. Is not the fundamental point of what he is saying that in asking the Government to pick one technology over another, we are asking them to pick winners? History shows us that the Government are much better at picking losers than winners.

Rather than the Government’s picking winners and choosing where to put subsidies, would it not be better for them to switch some of the subsidies currently going into the energy industry—there is a huge debate about that at the moment—into research, so that we can move on to the next generation of renewable technologies, which the market will support?

[Ian Swales]

The hon. Gentleman makes a good point. I have told many potential investors in the industry that we cannot expect the Government to make winners. As at a roulette table, they will put their chips on lots of different numbers, but having made policy on, for example, the proportion of petrol that should come from bio-sources, they cannot change it when people are putting in hundreds of millions of pounds. By the way, those biofuels do not get a subsidy; all they need is a market that is understood and left to prosper. I agree with his point, but at some stage we must not so much pick winners, as set the environment for particular sectors of the market to thrive.

[John Pugh]

One place the Government cannot avoid interacting with the market in one way or another is the taxation regime, and they do so to an enormous extent. A lot of the price of petrol is tax. They cannot opt out.

[Ian Swales]

That is a good point. The Government have a key role, because they are never out of the market, due to the environment they set and the rules they put in place. They are players, whether they like it or not.

We need to look constantly at the science behind the issues and not simply listen to the last non-governmental organisation we spoke to. Sustainability needs to be looked at from cradle to grave, and there is a lot of devil in that detail, such as the materials used to make a car battery for an electric car. We need to police systems, because once we put rules in place, there are usually lots of people working on the best way to get round them and maximise their take. We need to ensure that we are not naive about the systems we put in place. We need big thinking.

One of my concerns is that we need five Ministers to respond to the debate: one from the Department for Business, Innovation and Skills; one from the Department of Energy and Climate Change; one from the Treasury; one from the Department for Environment, Food and Rural Affairs; and one from the Department for Transport, who I am sure—no pressure—will speak for all the others. The issues typically cross those five Departments, a fact that I know the Government recognise. They have put a high-level team in place, but we need not just high-level thinking, but high-level action to ensure we get a consistent view, over, for example, the value of waste and where it is best used.

Finally, I congratulate the Minister on his new role. I am sure that, having listened to the debate, he is wondering whether he did the right thing in accepting the job. I hope he will give us the clarity we all seek.

--- Later in debate ---

[Ian Swales]

Does the Minister feel that his colleagues in the Department of Energy and Climate Change, who are worried about the lights going out this winter, are factoring into their work on future power generation the electrical demand that he is talking about?

[Mr Goodwill]

Yes, I am sure they are. I am concerned that one means of addressing the range anxiety problem is to have fast-charge cars. Electric cars work well when they are charged overnight with renewable energy or nuclear energy, but once we start fast-charging cars at filling stations, we will have a major problem not only with generation capacity but with the grid’s ability to carry that amount of electricity.

However, not all modes of transport can be easily electrified. Aviation and heavy goods vehicles are likely to continue to require liquid fuels for decades to come. It is therefore essential that we develop the technologies to produce low-carbon liquid fuels.

Biofuels are renewable transport fuels created from organic matter and offer one way of creating low-carbon fuels. However, biofuels—and bioenergy more generally— also present complex challenges. Last year, the Government published a strategy for bioenergy, which recognised its important role in allowing the UK to meet its climate change objectives. It concluded that by using bioenergy, we could cut the costs of decarbonising the UK by £44 billion.

--- Later in debate ---

[Mr Goodwill]

The issue of displacement—the ILUC situation—is one that we are well aware of. It tends to be more of a problem with biodiesel than with bioethanol, but it is an issue that we need to address through negotiations and agreements at the European level.

The European targets that the UK has agreed to are legally binding. Therefore, the UK needs to work within the European framework to produce a biofuel policy that reduces the environmental and social impacts of biofuels. As part of this process, it is imperative that ILUC is properly addressed at European level. Negotiations are ongoing in Europe, and we are pressing for an ambitious outcome to the ILUC situation. The 5% figure is certainly the figure that we are negotiating towards.

As we have heard in the debate, there are also concerns about the impact of biofuels on food prices. Food versus fuel is an issue that I take very seriously. The primary goal of agriculture should remain food production, and the production of biomass must not undermine food security or increase food prices. It is accepted that increased demand for biofuel has played a role, but Government analysis has shown that although increased global crop prices have resulted from biofuel production there has only been a modest rise in food prices.

I must point out at this stage that there is only 10p worth of wheat in a loaf of bread anyway, so there are many other factors that come—oh dear, I have mentioned that I am a farmer again. However, I recognise the seriousness of even a small impact on food prices, as well as the potential for biofuel support policies to increase crop price volatility. Nevertheless, I am confident that our position on the ILUC negotiations, if it is successful in limiting crop-based biofuels and incentivising those produced from wastes and residues, should reduce the direct competition for food feedstocks.

I will turn now to advanced fuels. Resolving the issue of ILUC remains the main barrier to setting out the clear pathway to achieving our 2020 targets, which I know industry and investors need. However, in the meantime we can set out some markers for the longer-term path to more sustainable biofuels. That is likely to be achieved through the use of non-land-using feedstocks, such as agricultural residues and municipal waste. However, use of these feedstocks requires advanced conversion processes that have not yet been commercialised. These processes are an exciting technology, which can turn unwanted waste products into valuable transport fuel. A number of countries have already established production facilities for these advanced biofuels, although there are none as yet in the UK. However, with the UK’s world-class research capabilities we have the potential to become a global player in this sector.

That is why earlier this year the Government announced a £25 million competition for an advanced biofuel demonstration contest, which aims to deliver up to three demonstration-scale advanced biofuel plants in the UK. Later this year, we will also be announcing a call for evidence on advanced fuels. We will invite industry’s views on what more the Government should be doing to develop these essential technologies, which will be needed long into the future to allow us to reduce the carbon footprint of road travel and, increasingly, other transport sectors.

However, not all non-land-using biofuels rely on advanced technologies. For example, biomethane made from waste demonstrates some of the highest carbon savings of any biofuel, and the technology for its production is well understood. Indeed, I visited a BMW car plant in the United States, which was powered by biofuel from a nearby waste dump.

[Ian Swales]

May I ask the Minister a question about a detail in his speech? He mentioned “other transport sectors”. It is already technically possible for biokerosene to fuel aircraft. Some aircraft have flown—including, I believe, a Virgin aircraft—powered purely by biokerosene. Will the Government do anything about aircraft fuels?

[Mr Goodwill]

I will not digress too far into the area of aircraft but we certainly need to ensure that the quality of aircraft fuels is consistent, and currently we do not put biofuel into aviation kerosene for safety reasons. However, more research could lead to some progress in that area.

Biomethane represents a particularly compelling opportunity for heavy goods vehicles, which have few other options for decarbonisation. Biomethane currently represents less than 1% of renewable transport fuel, so there is clear potential to expand its contribution to reducing emissions in the UK. However, biomethane cannot be used in transport without the vehicles that are able to use it, and there are currently fewer than 1,000 natural gas vehicles in the UK. The Government are supporting the early uptake of gas-fuelled vehicles through the low-carbon truck demonstration trial. This £11 million project to trial low-carbon trucks and supporting infrastructure will support almost 350 natural gas trucks.

I am aware of industry concerns about the adequacy of incentives for the use of biomethane in transport, particularly when compared with other Government support schemes for the use of biomethane in electricity and heat. These issues will be considered as part of our forthcoming call for evidence, and we will then be in a position to propose the changes that we think will be needed to the RTFO in order to strike the best balance of incentives. With luck, we will then be able to introduce those incentives alongside agreed European proposals to address ILUC.

I turn now to some of the points made in the debate. I again welcome the shadow Minister, the hon. Member for Birmingham, Northfield (Richard Burden), to his role. In many ways, we are on the same page. The renewable energy directive targets are still in place for 2020; under those targets, 10% of transport energy will be renewable. I am sure that he will be pleased to know that those targets have not changed as a result of our recent negotiations.

The hon. Member for Southport raised the issue of liquefied natural gas, which is the same as methane or biogas. As a transport fuel, natural gas has lower carbon emissions than diesel; it produces about 15% lower emissions. Natural gas also diversifies our fuel supply, increasing energy security, and it can improve local air quality. In addition, natural gas benefits from a lower duty rate than diesel. I should point out that matters regarding duty rates should be addressed to the Chancellor of the Exchequer.

Liquefied petroleum gas vehicles have some environmental benefits. On a lifecycle basis, LPG vehicles produce about 14% less carbon dioxide than petrol vehicles do. However, LPG is not as good as diesel. LPG cars deliver similar air quality emissions to petrol cars, and better air quality emissions than diesel, although the gap has narrowed with the introduction of Euro 5 and Euro 6 cars.

The hon. Member for East Lothian (Fiona O’Donnell) asked about the 5% food crop cap. I hope that I have reassured her that we are sticking with that, and we have certainly made it clear to the European Commission, the European Parliament and all other member states in the Council of the European Union that the UK supports the 5% cap.

East Coast Main Line

Ian Swales Excerpts

Wednesday 5th June 2013 Westminster Hall

[Ian Swales (Redcar) (LD)]

I congratulate the hon. Member for Middlesbrough (Andy McDonald) on securing this debate and on his excellent speech, which fully covered many of the issues. I have been a regular traveller on the east coast main line for more than 25 years for business purposes. It seems hard to believe that it is the most successful and profitable line in the country, because the bungled franchises under both Governments and under-investment have left us with old trains, poor punctuality and high fares.

Arriving at Darlington station to come to Parliament, I have a choice: buy a standard return ticket, or get back in my car, drive to London and do the return trip that way. At 45p a mile, I save the taxpayer £60 if I drive. Is there anywhere else in the world where a mass transit system is so much more expensive than each passenger recovering in full the cost of driving a car?

In the year to March 2012, East Coast made a profit before tax and payments to the Department for Transport of £196 million on a £666 million turnover; that is more than 29%. It is high time that some of that money was used both to reduce the fares and to upgrade the rolling stock. Until then, users of the line are bound to feel that they are being ripped off and, in effect, used to subsidise the rest of the network.

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

My hon. Friend makes an important point about the quality of the rolling stock, but is he not aware that the inter-city express programme, which will be built in the north-east, will introduce new trains on the east coast main line?

[Ian Swales]

Indeed, and I hope they will be built in the north-east at the new Hitachi factory. Let us hope the public procurement produces the right answer.

I note the Opposition’s position. They had the chance to make the franchise public in 2007; they did not, and they went into the last election promising a refranchising in 2011. The Public Accounts Committee, of which I am a member, reviewed the east coast fiasco in mid-2011. It mainly considered the National Express failure, which was a familiar story of unrealistic bidding, poor due diligence, poor contracting and wasted taxpayers’ money. Since then, the Department’s franchising team has caused the west coast train disaster with another huge loss of taxpayers’ money. Will the Minister give us confidence that a proper job will be done this time?

Although I understand the commercial sensitivity, I feel that the whole bidding review process should be as transparent as possible. Independent experts should be involved from the start to provide scrutiny to avoid unrealistic assumptions producing the wrong answer. Taxpayers should not have to wait for the National Audit Office to pick over the entrails again. Furthermore, if the offers are not good value for travellers and the taxpayer, continuing public ownership must be a realistic alternative. As the hon. Member for Middlesbrough said, we should not start with the answer and allow political dogma to decide.

I hope that the bid review process will also be stress-tested. For example, there should be no assumptions about tax recovery from companies, which then avoid tax, as we constantly see in the world of the private finance initiative.

With its inherent profitability, and given that the 250-mile journey from Darlington to London takes as little as two and a quarter hours, the east coast line should be the jewel in the crown of the UK rail network. However, with two bungled franchise deals behind us, the Minister has a lot to do to convince us and the public that this will be third time lucky.

Oral Answers to Questions

Ian Swales Excerpts

Thursday 18th October 2012 Commons Chamber

[Mr McLoughlin]

I will certainly bear in mind the hon. Gentleman’s comments. He has always fought hard for an improved service for his constituents and in the Sheffield area. I will look closely at what he has said.

[Ian Swales (Redcar) (LD)]

14. Does the new Secretary of State recognise the need for electrification in the Tees valley so that we can have a metro service to connect the large conurbation together?

[Mr McLoughlin]

I take that as a bid, and it is one that I will look at in more detail. I am sure that I will hear much more about it from my hon. Friend.

Oral Answers to Questions

Ian Swales Excerpts

Thursday 23rd February 2012 Commons Chamber

[Mrs Villiers]

It is not the role of Ministers to make decisions on these deals. There are legal rules that put in place the role of independent competition authorities in deciding these questions. Of course the Government take seriously the importance of regional connectivity. That is one reason for our pressing ahead with HS2 and our Y-shaped network to Leeds and Manchester, which will deliver a three and a half hour journey time to Scotland, providing an excellent addition to current connectivity.

[Ian Swales (Redcar) (LD)]

7. What plans she has to ensure the rail network serving ports can carry modern freight containers.

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

Our policy is to continue to develop the strategic freight network to drive UK economic growth and support the expansion of our maritime trade.

[Ian Swales]

I welcome the public investment to upgrade the rail connection from Teesport to the east coast main line by the end of this year. However, there is still no suitable east-west rail crossing for modern containers anywhere between the midlands and Scotland. Will the Minister also address that problem?

[Mrs Villiers]

The Government have a major programme of improving the capacity of our rail network to take freight, particularly the 9 feet 6 inches high cube containers that are such an important a part of international trade. That is why the railway control period up to 2014 will see about £350 million spent on upgrading the network. A crucial part of that is improving links to ports, for example between Southampton and the west coast line and on the Felixstowe-Nuneaton line. That will provide major benefits on carbon emissions, road safety and relieving congestion on our roads.

--- Later in debate ---

[Justine Greening]

I will be happy to meet the hon. Gentleman to discuss this issue because I can assure him and his constituents that people in Liverpool are absolutely not being left in the slow lane. They will benefit from the improvements in times on the west coast main line. I am happy to talk with him about phase 2 and how we can, I hope, ensure that Liverpool benefits, as one of the cities that will not be on the line but will be in the region served by it.

[Ian Swales (Redcar) (LD)]

T2. In the light of research from the continent showing that high-speed rail has an adverse effect on the economy of towns and cities not on the networks, what assessment has the Secretary of State made of the impact of High Speed 2 on the north-east of England?

[Justine Greening]

We looked closely at the wider economic impacts. In fact, looking at high-speed rail’s impact in other countries, such as France, one sees that there has been a broader regional benefit. I am determined to work not only with the cities where high-speed rail will stop but with the broader regions served to ensure that we make the most of the huge opportunity that I think high-speed rail presents.

Tees Valley Rail Transport

Ian Swales Excerpts

Tuesday 24th May 2011 Westminster Hall

[Ian Swales (Redcar) (LD)]

Tees Valley is a distinct area of the country with a population of more than 750,000 people. It is well defined, with the sea to the east, 20 to 30 miles of open County Durham countryside to the north, the dales and Pennines to the west, and a vast area of sparsely populated north Yorkshire to the south. It has long been defined as a coherent economic area. It was no accident that the Tees Valley local enterprise partnership was quickly established, as a similar body already existed. Despite the substantial population, the area has a slight identity crisis. It is often referred to as a city region by policy makers, but it contains no cities or even one dominant town. Middlesbrough is currently applying for city status.

Steam-powered passenger rail transport actually started in Tees Valley between Stockton and Darlington in 1825, hauled by George Stephenson’s engine, “Locomotion”. Some 185 years later, we cannot even go directly from Stockton to Darlington on a train. There is a passenger rail system, but it is poorly co-ordinated, has insufficient trains and badly needs investment. New station stops are needed to reflect developments since the lines were built. This has been recognised for many years by the local and regional planning authorities. Finally, in 2009, a first tranche of investment in a Tees Valley metro system was approved. However, after less than £5 million was drawn down, the remaining £24 million was postponed by the present Government. The importance of the project to the area was shown by the fact that a first phase was resubmitted to round 1 of the regional growth fund. Unfortunately, the bid was unsuccessful.

My speech today will cover three main areas: the need to get a good passenger metro system in Tees Valley; the importance of freight investment; and the need for a long-term vision, including further use of existing lines and possible new lines. Settlements in Tees Valley are there mainly due to manufacturing industry. Decline of industry in the last few decades has left much of the area at the wrong end of all the socio-economic league tables. For example, a study by the BBC and Experian in 2010 looked at 324 areas of the UK in terms of economic strength. It placed Hartlepool borough 314th, Redcar and Cleveland 319th and Middlesbrough, arguably the largest town in England, in last place at 324th. Middlesbrough also has the third lowest number of businesses per thousand residents in the country. It is precisely because the area has been performing badly in recent years in respect of socio-economic indicators that there is a need for a modern, long-lasting rail network to aid regeneration.

There are many promising signals. Teesside university was UK university of the year for 2009-10, and that has helped fuel a rapid growth in digital and media industries. Teesside remains a key UK centre for process industries and is emerging as a major centre of green technology research and manufacturing. Teesport is a thriving, growing port. Darlington is a growing commercial centre, aided by the presence of the Student Loans Company and Teachers’ Pensions. If we are to restore the north-east to the economic hub it once was and can be again, improving rail infrastructure is vital.

Existing passenger rail in the core area is in the shape of a cross, with a north-south Hartlepool to Nunthorpe line intersecting the east-west Darlington to Saltburn line at both Thornaby and Middlesbrough. This area should be the first target of a metro system. There are 21 stations in the core area. Some are very poorly served, including the one near the airport at which only one train stops every week. Despite the patchy service, usage has grown over the past 10 years. More than 2 million people a year use Darlington station, which gives access to the east coast main line and other national services.

[James Wharton (Stockton South) (Con)]

My fellow Teesside MP—I still do not like “Tees Valley”—has already touched on a key concern for our part of the north-east, which is the future viability of our airport. An effective rail transport system, making proper use of the station at the airport, would be an important piece of the puzzle in bringing Teesside airport—as I still insist on calling it—back into use and making it successful once again. The airport, which is on the boundary of my constituency, has a new owner, looking to do exciting things. I congratulate my hon. Friend on securing the debate, and I hope that the Minister will consider that, as part of an integrated package, rail transport could also revive our air transport links.

[Ian Swales]

My hon. Friend’s intervention is timely, because I am about to talk more about the airport. I fully support his comments. It is essential that the airport is better served, and a frequent light rail service operating in the core area would help to change the economic fortunes of Tees Valley.

The use of rail services has continued to grow, despite the patchy service: last year, footfall increased by just less than 50,000; and in the past 10 years, the average increase in footfall overall has been 58%. Refurbished stations have shown the biggest increases, some in excess of 100%. The increase in passengers, along with huge further potential demand, means that new lines, trains and infrastructure are needed to meet the needs of residents and businesses.

Investment in existing stations is vital. For example, establishing a proper link to the airport is vital: Durham Tees Valley airport, or Teesside as it is still shown on departure boards all over the world, must be the passenger airport in Britain worst served by public transport, but the train line passes just half a mile from the terminal. Eaglescliffe station now has a main line service to London, but no information displays and only two small bus shelters for passengers. Redcar station needs investment as a gateway to the town and the new college and civic developments, and Darlington station needs investment to improve access to new educational and economic developments. The Redcar and Darlington schemes were included in the regional growth fund round 1 bid. The last new station in the area was Longbeck near Marske-by-the-Sea in 1985.

There are clear possibilities for further new stops on the existing lines. Some examples include Teesside park, for access to the new shopping area and the Tees barrage leisure facilities; Middlehaven, for the major new commercial developments and the Riverside stadium, home of Middlesbrough football club; and the James Cook university hospital, which is the major acute hospital for the area. Traffic to and from the hospital is a big source of congestion on one of the main access roads to Middlesbrough, and there are chronic parking problems at the site. Providing a good rail service would help to reduce such problems. The existing lines run close by, and a new station for the hospital was also part of the initial regional growth fund bid.

A number of other residential and commercial developments are current or planned along those routes, opening further possibilities for new stations, such as at Morton Palms, Darlington, and The Ings, Redcar. A further key need is to ensure that the new enterprise zone recently announced by the Government is well served by public transport. It is almost certain to be close to those rail routes.

I will now move on to freight. Teesport has recently been ranked variously as between the second and fourth largest port in the country, depending on the amount of industrial activity in the area. As well as serving the bulk process industries and being an import terminal for cars, Teesport has a rapidly growing container business, with giant new warehouses serving Tesco and Asda. The excellent facilities at Teesport mean that process industries inland also use the import/export facilities, and such industrial materials normally require shipment by rail.

The port has been successfully driving economic and employment growth. For example, 1,100 jobs have been created since 2007 and further exciting developments are planned. However, the existing connecting rail facilities need upgrading—for example, to provide clearance for modern 9-foot 6-inch containers—which is strategically important for the country. A successful Teesport backed by good rail facilities will help to reduce lorry use by millions of miles, bringing economic and environmental benefits. As part of the regional growth fund round 1, a gauge clearance project was submitted, which is vital to continuing the rapid, port-based economic growth. I hope that the Minister will recognise the importance of getting more bulk freight off the roads and on to the railways.

The longer term vision includes more use of lines joining the core area and possible new lines. To the west, Darlington connects to Bishop Auckland via four other stations, including the former rolling stock manufacturing town of Shildon and, following the Hitachi announcement, the new rolling stock manufacturing town of Newton Aycliffe. The line from Eaglescliffe to Northallerton passes through the large population centre of Yarm-on-Tees, which I believe is in the constituency of my hon. Friend the Member for Stockton South (James Wharton). Beyond Nunthorpe, the line passes into the north Yorkshire moors and on to Whitby. Services on that line are always likely to be more of a leisure activity, but the first station is Great Ayton and most people in that area work in Tees Valley.

Finally, beyond Saltburn, part of the old Yorkshire coast line to Scarborough still exists as a freight-only line as far as the Boulby potash mine. The potash mine received money to expand in the regional growth fund round 1 and is a major local employer. I have recently been approached by an operator who is considering restoring a passenger service along the line to include the east Cleveland settlements it passes through, including North Skelton, Brotton, Skinningrove and Loftus. Use of all such existing lines to better connect people to the core Tees Valley services and opportunities should be part of our vision.

Serious discussion is also going on about reopening the old Nunthorpe to Guisborough branch line. Although the track has been lifted, the route is virtually intact as a walkway, and Guisborough has expanded to be a large centre of population, with most of the people working in Tees Valley. They are a large contributor to the heavy south-to-north road congestion at peak times. A rail service would reduce the current pressure to invest in new road solutions—some road-building proposals even involve taking land from the National Trust at Orenby hall.

More speculative would be the construction of other new lines and a Tees crossing nearer the river mouth. Redcar to Hartlepool is only seven miles as the crow flies, but the need to go a long way upriver to cross by road or rail means that their local economies are largely disconnected. A Tees crossing remains a dream for many in the long term. Where new lines are not economical, better co-ordinated bus services are needed to link centres of population to the rail network, for example from the Greater Eston area.

I appreciate that investment requires funds, but I urge the Minister to consider carefully the issue of fares. The UK already has some of the highest fares in the world. I live close to Redcar East station and, to travel one stop to the centre of town, the fare is only slightly less than a taxi fare—for just two people, a taxi would be the cheaper option for most short journeys locally. For long trips, we risk incentivising people to do the wrong thing. For my trip to Parliament each week, it is already cheaper to drive at 40p a mile than to buy a standard class open return train ticket. I hope that the Minister will recognise that fares must remain reasonable, as mentioned in the coalition agreement, and that continued public investment in the railways is in the country’s interest. That is the view taken by Governments in almost every developed country.

As I hope that I have illustrated, it is vital that Tees Valley receives the short-term investment it desperately needs to improve passenger and freight rail transport. Investment without a long-term vision, however, will not deliver the results that the people throughout the region want, so it is important that a long-term strategy is put in place to manage investment over time and to build the infrastructure needed. Tees Valley is an area with enormous potential to drive major growth in the UK economy. I hope that this debate has helped further the cause for improving Tees Valley rail transport, and I strongly urge the Minister to support the upgrades that are so badly needed.

[The Parliamentary Under-Secretary of State for Transport (Mike Penning)]

It is a pleasure to serve under your chairmanship, Mr Benton. I pay tribute to my hon. Friend the Member for Redcar (Ian Swales) for securing this important debate. Having a debate on the day before a recess is always dangerous, but he managed to encourage some of his colleagues to attend.

I was in Teesside only recently. I went there by train from London to visit Teesport, which comes within my portfolio. I have been asked to respond to the debate because my hon. Friend the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), whose portfolio covers regional and local transport, is not here. He has asked me to apologise for his absence.

The points that my hon. Friend the Member for Redcar raised cover myriad modal shifts in how to get passengers and freight off the roads, and how better to use available facilities. It was fantastic news for the region when the Tees furnace was reopened, and certainly the new owners, whom I had the privilege of meeting, were thrilled. What was obvious when coming in by train was the unbelievable number of sidings that have not been used for a considerable time. I am the Minister with responsibility for freight, on whatever mode, and it always hurts to see that investment sitting there unused. It may have been made many years ago, but the concept was right.

The port, which is under new ownership, has a huge footprint, and not all of it has been used as well as we would like. There are contamination issues, as I am sure my hon. Friend is aware—the new owners of Teesport, however, have good and imaginative ideas, especially in some of the areas to which my hon. Friend alluded—such as problems relating to moving larger containers around. A particular issue in this country is that we cannot move many of them on our canals, which are a great asset, but difficult to use.

My officials have written a brilliant speech for me, but if I read it out, which I am sure is what they would like me to do, I would fail to pay tribute to the contributions that we have heard this afternoon. Investment for the area was planned before the new coalition Administration came to power, and before we realised how bad the economic situation is. I will not go through how bad it is, because everyone knows the situation. The £4.9 million that was drawn down has been well spent, and the stations at Hartlepool, Eaglescliffe and Thornaby have benefited.

I am pleased to hear that the new owners of the airport have sensible ideas for expansion, and how to increase their market share and put the airport on the map in the UK, but that will require investment. They will have to look at their business plans, and create a market that drives people to use it. I was fascinated to hear private companies saying that they would like to put passengers back on that line. They are obviously thinking of doing that because there is a need. The Government may help and, as my hon. Friend knows, two funds have been drawn down.

Sadly, Tees Valley Unlimited was not successful in the first tranche, because it needed to be much better at proving what the economic benefits in terms of jobs would be from drawing down from that fund. Tees Valley Unlimited has discussed the matter extensively with my officials. They have met eight or nine times recently, and I urge them to have further meetings, because the key to both funding plans is that the community comes together, and that a proper business plan is drawn up to create the right climate for further investment in the area. I will not go into the semantics of what it should be called. I have enough problems deciding when to call my football team Spurs or Tottenham Hotspur, and my town Hemel or Hemel Hempstead. It is for local politicians to discuss the matter over a pint on another occasion.

However, it is important—I am sure that this has been discussed—that the area is branded in the right way so that investment comes to the area, and there is no confusion about that brand. The first time I flew to what was Speke airport in Liverpool, I looked for Speke on the departure board, but it had been renamed John Lennon. I had no idea that I was going to Liverpool. When a brand name is used for a community, it must be what the community is looking for. I am sure that the new name was discussed in great depth before it was introduced, but whenever I spoke to people in that part of the world, and especially when I was at Teesport, there was confusion. When I quoted my brief, they did not understand what I was talking about until I talked about Teesport, the Tees area and so on.

There is real scope for local authorities to come together, and to consider joint bids. It is crucial as we go forward with the localism agenda, to which the Department for Transport is fully committed, that local authorities are not parochial and say, “This is our borough, and we won’t join together.” They must have confidence in their area and say, “We know what’s best for our community, and exactly how to generate jobs and go forward.” Four local authorities would probably need to join together to formulate a plan and to give them confidence to return to the Department for Transport, as well as to other Departments, because transport will not be the only issue.

[Ian Swales]

I want to pick up the point about local authorities. Five are involved: Stockton, Hartlepool, Middlesbrough, Redcar, Cleveland, and Darlington. The Minister can be confident that they are speaking with one voice on such issues, because Tees Valley issues and transport infrastructure cross all five. One reason why the local enterprise partnership got going so quickly was that it was heavily backed by those five local authorities.

[Mike Penning]

I am new to this area, and I may not be back if I make a mess of it, but my brief refers to the four Tees Valley local authorities. If that is wrong, I will arrange for my Department to write and apologise. When talking about local areas, branding is important.

In the next six months, passenger transport executives, groups of local authorities, and local enterprise partnerships should come together to discuss whether they want to take greater responsibility for such services. That is crucial when discussing where they are going, and how. There will be some central Government funding, but not as much as we probably all want, but local communities, especially through local enterprise partnerships and so on, will have much more say in what is done, and there will be an early opportunity to shape the future and destiny of local rail services. We have been discussing bits and bobs, but the discussion should be formalised with a shopping list of what should be done first, what should be done second, and what should be done third.

If we read my hon. Friend’s speech tomorrow morning, and the points that he made—I apologise for this and I am not being critical—will we know what the priorities are, and what needs to be done in the short term, the mid term and the long term? Communities and LEPs must come together to decide that. I am not being critical, but that must be done.

On cost, the McNulty report, which was commissioned by the previous Administration, addresses fares, and the fact that, if we are not careful we may jeopardise the great success—this is not party politics—of the railways today. There are issues about capacity and cost, and whether we are driving people off the railways and into their cars. That is important: we must address it in the franchise agreements and remove bureaucracy. McNulty acknowledged that the way in which the railways operate involves a huge amount of bureaucracy and cost, and in international terms they are very expensive. He estimated that £1 billion of savings could be made without damaging infrastructure, while at the same time encouraging people to use the railways. That will be a difficult task, but anyone who has had anything to do with railways—I am involved purely in freight, which is more successful now than it was—must address the fact that the state can provide only a certain amount of money for new lines. There is only a certain amount of railway capacity for the freight industry, and we must look carefully at how we can encourage a better modal shift and not have so much long-haul freight on the railways.

On today’s network—without High Speed 2 and the lines to the north-east and north-west, which would release more rail capacity—even if we increased rail freight to full capacity we would still struggle to get freight off the road. One of the huge successes in the Teesport region has been made by Asda and other supermarkets that are building what I consider to be the beginning of a renaissance in coastal shipping facilities—I apologise for naming Asda, but it is the store I visited. Bigger and bigger box ships are coming into big, deep-water wharves, but our roads do not have the capacity to move those goods around.

The most efficient way of moving freight anywhere in the world is by sea. We are a maritime nation with over 90 ports in state and trust ownership, yet we do not properly utilise those ports and their capacity. At the Asda hub, all the products that arrive come in by sea. The distribution is then worked out, and followed by what Asda describes as a limited “road bridging” system. That system is beginning to be replicated around the country. I was in the north-west the other day at Stobart’s rail hub. Stobart has developed such a system, not because it wanted a rail hub, but because its clients—Tesco, Sainsbury’s, Asda; we could name all the supermarkets but I probably should not—have said that they want goods to travel shorter distances. That area is developing.

The rail industry is underused. We have spoken about lines that need to be better utilised, and the railways are a huge facility that we could use to create a modal shift in transport locally through the hubs. The Asda scheme has been a great success, and it is looking at expanding it. It is a badge of honour for the local community and local authorities in that part of the world to facilitate the scheme and understand the needs and demands of their communities. We should also use other lines, especially if we can deal with the problem of bridges, and I know that discussions on that are taking place.

At the same time, we must be honest about what is likely to come in and out of the ports. As my hon. Friend said, if a line is working, it is crucial that it is used. It is much cheaper to use that line in a better way than to rebuild a line or put track back down. A lot of residents—I know this from my constituency—will have moved to live close to a railway line after the track was removed, and there will be an interesting debate about whether those lines should be put back. Those people no longer live next to a railway and without doubt, having a railway at the end of the garden or in the community impacts on people’s lives. That debate would be interesting; it would not be wrong to reopen the line, but such matters take time and must be managed correctly in the communities.

The use of Westminster Hall for a debate such as this is important. Concerns and ideas can be bounced into the arena, and Ministers will respond. I am conscious that I have not answered all the points raised by my hon. Friend the Member for Redcar, and by my hon. Friend the Member for Stockton South (James Wharton) in his intervention, but the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes, will write to them and answer all their questions. If a further meeting with a Minister is needed, the door will be open.