Greenock Coastguard Station

John McDonnell Excerpts

Wednesday 8th June 2011 Commons Chamber

[Mike Penning]

Of course. I was still responding to the intervention made by my hon. Friend the Member for Truro and Falmouth and when I have finished dealing with it, I will discuss the points that the hon. Lady has raised. In that intervention, I was asked specifically what will happen later in the process. We will announce our proposals once we have taken into consideration the Select Committee’s report. That means that I will have to reopen the consultation, but I stress that that will be just to allow that report to be taken into consideration. If I did not do so, I would be insulting the Select Committee and there is no way I intend to do that. The Government will announce their conclusions before the summer recess—as we have said all the way through, they are likely to be different—and then I will reopen the consultation. That is the right and proper way to proceed if we want to work with the public, with the service and with Members of this House. It is different from the way in which a lot of consultations have historically been carried out over the years, but I do not think this will be a one-off; I think that the Government will take this approach on a regular basis. I recall a consultation on my local general hospital in which 85% of respondents said they did not want the hospital to close, yet it was closed in any case. No consideration was given to people’s concerns. Does this approach mean that everybody is going to be happy? No, of course it does not. However, proper consultation will take place again once we put forward our proposals.

[John McDonnell (Hayes and Harlington) (Lab)]

I apologise for arriving so late to the debate and I am grateful to the Minister for giving way. It would be very helpful if he gave a commitment at the start of that consultation to avoid compulsory redundancies at every stage in the process from there on in.

[Mike Penning]

I hope that there would not be compulsory redundancies, but I cannot give that commitment and I am not going to stand at this Dispatch Box and mislead people. The PCS has known that all the way through. It is important to understand that there will be job losses if we reduce the number of co-ordination centres, although I hope that such job losses will not be compulsory. I have gone through redundancy, despite my union fighting to help me, so I understand where people are coming from. However, if I am going to increase salaries, training and career prospects, I have to find that money from somewhere and that money will come from the savings we are finding. There are quite significant costs up front, particularly for the resilience we want to put into the system. The Treasury has been generous and I have money, but I cannot carry that forward—I must make savings. To be fair, the union—

McNulty Report and West Coast Rail

John McDonnell Excerpts

Thursday 19th May 2011 Commons Chamber

[Mr Hammond]

I do not want to pre-empt the rail fares policy review, to which I am sure that my hon. Friend will make a submission, but I have recently enjoyed meeting the Northampton rail users group, and the Minister of State has just said that she would be happy to meet the Kettering rail users groups, so perhaps we can carry a dialogue forward.

[John McDonnell (Hayes and Harlington) (Lab)]

I refer to my entry in the Register of Members’ Financial Interests. On a constituency matter, with regard to First Great Western and the handing back of the franchise, I would welcome the Secretary of State or the Minister convening a meeting of the relevant MPs along that line to discuss the security of service provision. This looks like a creeping re-nationalisation of the railway service—but there we are! However, as the Secretary of State said, there is a big staffing agenda. All three rail unions have welcomed the opportunity to work with the Government on that agenda. However, it is crucial that they are represented at every level of the industry and in every forum discussing the staffing agenda. It is not conducive to good industrial relations to have statements about threats of further anti-trade union legislation at this time.

[Mr Hammond]

I will have to disappoint the hon. Gentleman on creeping re-nationalisation: there is not one, and I can assure him that so long as I am in this job, there will not be one. However, I am happy to meet MPs along that route to talk about the Great Western franchise. First Group will continue to operate the franchise until 2013, and it has assured us that it will operate it as normal and run the franchise properly during that period. It has every incentive to do so, because, as I just announced, our policy is that eligibility for participating in franchise competitions will depend on demonstrated ability to deliver co-operative working, and to bear down on cost pressures.

I am absolutely ready to meet the unions. In fact, I think my office is in the process of arranging a meeting with the rail unions through the TUC, which I hope can play a constructive role in this process—it is a process I think we all want—of making this a viable and affordable industry that has a bright future, and which will employ not fewer but more people as the railway expands on the trajectory of current projections.

Rail Engineering (Jobs)

John McDonnell Excerpts

Tuesday 29th March 2011 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I refer the House to my entry in the Register of Members’ Financial Interests. I have a railway estate in my constituency. It was a British Rail estate constructed to house railway workers. Although many of those properties have been sold off, it still predominantly houses railway workers, many of them retired but many of them still working. As a result, I have taken an interest in the railway industry for the past 30 years. I am also the convenor of the National Union of Rail, Maritime and Transport Workers group in the House. We come together as a group of Members interested in the railways to receive briefings from the union on issues of the day.

One of the key issues that has been raised consistently with us over the past year has been the current and future state of rail engineering in this country. Rail engineering concentrates on renewals, which includes the installation of new overhead lines and signals and the laying of track. It is skilled work and we have a skills base of trained and experienced workers developed over centuries. It requires that skill to produce the quality of work that ensures a safe transport system for the travelling public. We have learned to our cost over the years that if there is any undermining of that skills base, it produces accidents. I lost one of my constituents in the Paddington disaster, and others were injured in Southall.

Network Rail, the not-for-profit company that was established by the previous Government, is responsible for the rail infrastructure and for rail engineering. Network Rail puts out to tender to private companies all the renewals work. Jarvis was a major contractor in the field of renewals until a year ago, almost to the day. On 31 March 2010 Jarvis went into administration. Some 1,200 workers—skilled railway engineers—across Britain were sacked. That put a large section of the rail engineering skills base of this country in jeopardy and it is still impacting on the industry.

The impact on the workers and their families was disastrous and heart-rending in many cases. They were paid only statutory redundancy. Their accrued benefits were lost, and active and retired members of the Jarvis pension scheme suffered detriment to their pension entitlement. I have met a number of the ex-Jarvis workers and it has been extremely distressing. They appealed to me to explain to the House just what had happened to them and the effect of being sacked in that way. They asked me to give a couple of examples.

I met Mick. He was one of the workers who explained that they were sacked the week that they were due to be paid four weeks’ money, and the mortgage and bills still had to be paid. The loss of his job led to a strained relationship with family members and severe financial difficulties. They were forced to sell the family car. He suffered medical problems as a direct result of the stress brought on by his redundancy. The chief grievance for him is the pain of knowing that his former work is still being done, but by someone else on less pay and with worse conditions.

I met Brian, who had worked for Jarvis for 36 years. He had been a skilled worker. He told me that

“to sign on unemployed is soul-destroying and we have to live off our savings to pay for food and bills. I have applied for lots of jobs, over 50, and have received only one reply. I was unsuccessful in that application.”

He went on to say:

“The future looks bleak. I feel very let down by Jarvis and Network Rail for putting us in this life-changing situation.”

The last individual I met, Martyn, is in work. He said that other rail contractors have taken

“advantage of sacked engineers’ desperation to find work”.

He said there are now

“low wages, poor terms and conditions; long hours; zero hours working; long driving times and a culture of keeping quiet about safety for fear of not being picked for contracts… I hope my fears about accidents and death on a railway I just don’t recognise anymore prove to be untrue.”

[Jeremy Corbyn (Islington North) (Lab)]

I congratulate my hon. Friend on securing the debate and on his speech. Could he explain, if he knows, why the valuable and skilled workers of Jarvis were not taken into direct employment by Network Rail at the time of Jarvis’s collapse? Clearly, all their work was done for Network Rail anyway, as there are no other railway services in Britain to work for.

[John McDonnell]

I will explain, but first I will give another example of what I found among ex-Jarvis workers. We met workers who are now touring the country picking up days of work. These are skilled engineers, but some of them are unable to afford proper accommodation because they are now agency workers on low wages and are having to sleep in cars and vans so that they can pick up a day’s work wherever they can.

Let me explain what happened, because lessons need to be learned from what happened for the future of rail engineering in this country. Jarvis’s bankruptcy did not need to happen. It was forced into administration because Network Rail deferred renewals work to comply with the Office of Rail Regulation’s decree that it needed to make a 21% saving over the five-year control period 2009 to 2014. Jarvis’s bankruptcy was not the result of the recession. Despite the cash-flow problems, it had £100 million-worth of work on its order book.

My hon. Friend the Member for Islington North (Jeremy Corbyn) referred to the fact that Network Rail refused a rescue plan from the administrator for Jarvis’s rail division. The administrator put forward a proposal for a £19 million investment to cover the running costs and wages for a couple of months of operation, which would have enabled the staff of Jarvis to be transferred in an orderly way to other companies that were picking up the Jarvis contracts. That was rejected by Network Rail, and the Government refused to intervene and use their legal powers under the Railways Act 2005 to treat Jarvis’s work as an essential railway activity, as that would have allowed them to step in and protect the work and the workers themselves. We now know from freedom of information requests that the Government knew months in advance of Jarvis’s imminent crash.

The lesson is that we must never again allow the failure of one company to put railway engineering at risk in this way, because the results of this fiasco are horrendous. One year on, the majority of the ex-Jarvis workers are still on the dole and Network Rail is re-letting former Jarvis contracts to agency labour. We are discovering exploitative wages and conditions. Even if ex-Jarvis workers have followed their work, they have moved across to inferior terms and conditions. There is now a fear about the commitment and quality of the work being done by the agency work force.

The irony is that we now know from Deloitte, which communicated this to Jarvis’s creditors, that the book value of the rail debts that were written off was £10.7 million, and the vast majority of the amount that was written off was owed to Network Rail. If we add to that the cost of redundancy, which fell on the taxpayer because the staff were not transferred under TUPE, and the drain on the staff funds of the benefit payments for the unemployed workers, we find that the overall cost of allowing Jarvis to collapse into administration in this way outweighs the £19 million cost of the rescue plan that the administrator proposed. It was a false economy not to accept the rescue plan, and it had a tragic outcome for the workers.

There is also a longer-term cost that threatens the future of the rail industry and safe transport, because we are undermining the rail engineering skills base that we developed over two centuries. One of our concerns is that we have a demoralised work force, many of them unemployed, and that insecure work is being offered to agency workers with no stable future. We seem also to have undermined the attraction of a career in rail engineering, thereby jeopardising the recruitment of a future generation of rail engineering workers.

[Jim McGovern (Dundee West) (Lab)]

Is my hon. Friend aware, as I am, having found out just 10 minutes ago, that there are people employed in this House—in the Palace of Westminster—through an agency that charges £20 per hour and pays them £6.15 per hour?

[John McDonnell]

The reason why I raise the issue of agency workers in the rail industry is that such employment practice is becoming the norm for a number of companies. It is reflected throughout industry, and if it has now invaded the House. I find that disappointing. We as Members should take it up, because it does not seem to be a particularly cost-effective way of employing staff. The agency receives a large cut, but there is very little reward for the workers themselves.

The irony of what happened to the Jarvis workers is that, during the period in which they were laid off, the previous Government and the incoming Government were planning one of the largest railway industry expansion and modernisation programmes that we have seen for perhaps 50 or 70 years. It has happened just at a time when there is a huge job of work to be done in modernising the rail network, with the arrival of Crossrail, High Speed 2 and the electrification of the Great Western main line. We need a stable and skilled rail engineering work force and a national strategy that will retain and develop those skills, so that we can complete that modernisation and renew and enhance our rail network. In the long term, if we are to ensure that stability, we should bring renewals back in-house, back into Network Rail.

The McNulty interim report demonstrated that, when Network Rail brought maintenance in-house in 2004, there was a saving of £400 million per annum. I believe that bringing the renewals back in-house would achieve the same savings, but all the potential for the development, improvement and modernisation of our rail network will be jeopardised if we go through another Jarvis-type disaster.

I should welcome the Minister addressing several issues, and I express my gratitude to the Ministers we have met in recent months. The RMT parliamentary group, RMT union officials and the TUC have discussed with Ministers the plight of Jarvis workers and the future of rail engineering, and I am grateful to the Minister of State, Department for Transport, for writing to Network Rail to urge it to work closely with the unions and to meet members of the RMT parliamentary group. We have heard that the new chief executive at Network Rail, David Higgins, has expressed a willingness to attend a round table of stakeholders to discuss where we go from here on rail engineering.

I should like to ask the Minister here tonight to look at a number of concerns about the future. First, what is to happen to the ex-Jarvis workers who are still on the dole? Network Rail could assist in resolving some of the problems of the ex-Jarvis workers by stipulating that new contractors employ Jarvis workers or at least give them first refusal in any application for jobs. Part of the problem is that it is not clear where the former Jarvis contracts have been awarded, so it would be helpful if Ministers could intervene, asking Network Rail to identify through its Sentinel system exactly how many former Jarvis workers have been employed by contractors and how many are still out of work. In that way, we could work with them to secure their re-entry into the industry.

It would be helpful also if pressure could be put on the individual organisations—the five main companies that took over the Jarvis work—to meet the unions and other representatives of the work force to ensure that we overcome some of the outstanding claims from Jarvis’s going into administration. The companies are BAM Nuttall, Babcock Rail, Freightliner, DB Schenker and VolkerRail. In the long-term interests of the rail industry, we should do all in our power to ensure that this never happens again in this industry—that we never go through another collapse of a company when all the various agencies and stakeholders just stand to one side and allow it to happen.

[Jim Shannon (Strangford) (DUP)]

Is the hon. Gentleman suggesting that what is needed is for the Government to take a direct, hands-on approach to retaining skills and ensuring that those who have lost jobs get back into work again?

[John McDonnell]

Certainly. I will come on to an idea that I have about that, which I think will interest the hon. Gentleman.

To deal with the more immediate questions about learning the lessons of how this occurred, one of the concerns expressed was about the failure by Government to apply the powers of the Railways Act, which would have protected not only the contract work that was being undertaken but the workers who were undertaking those contracts. It would be helpful if the Minister could offer interested Members from all parties a meeting with the appropriate civil servants to discuss the procedures and criteria for when Government can apply the powers under the Railways Act if companies are threatened or in danger of going into administration, so that at least we get those procedures clear in case this occurs again.

I also ask the Minister to look at the arrangements under the Transfer of Undertakings (Protection of Employment) Regulations 1981 to see how they can be amended so that we are never again in a situation in which workers are unprotected and are made unemployed, not transferred across, and then taken back on under agency conditions, and, as a result, on worse wages and with worse conditions.

I would also welcome the Minster working with us to review the protection of railway workers’ pensions. The original pension rights of those who worked for British Rail, which Members from parties across the House thought would be protected on its privatisation, have been undermined by subsequent pensions legislation—I think unintentionally so.

[Jim McGovern]

Does my hon. Friend agree that it is a scandal that TUPE does not apply to pensions?

[John McDonnell]

It is a gap in the protection of workers’ living standards, and this instance is a classic example of how people’s futures have been damaged when they thought they were secure. The material that was provided to railway workers on privatisation of British Rail—the leaflets and documents that they received in the consultations that took place—assured them of the security of their pensions for the long-term. But then, as privatisation proceeded and individual companies took over individual contracts, those assurances were unfortunately not adhered to, and subsequent pensions legislation has undermined the protections that they had. Because this is not covered by TUPE, many of the workers have suffered detriment. That is something that we need to look at, on a cross-party basis, I hope.

My final point is about the long-term future of rail engineering, and it relates to the comments made by the hon. Member for Strangford (Jim Shannon). We are now facing an immense task in seeking to modernise our railways, and the success of that cannot be put at risk by the lack of a skilled engineering work force. One proposal that I have for the Minister is that he convene an urgent, industry-wide jobs seminar to examine rail engineering employment needs not only now but for the long term, so that we can work together to safeguard and enhance skills in railway engineering.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

Surely that jobs summit, or meeting, must include provision for youngsters thinking of entering the industry to assure them that they will have a stable future and will be treated properly. The sort of casualisation that we currently have in the industry is undoubtedly a deterrent to entry.

--- Later in debate ---

[John McDonnell]

I think the experience of Jarvis has sent a message right the way through the industry that this is no longer a secure job. The message from what has happened to the ex-Jarvis workers is this: “No matter how skilled you are, you will not necessarily be properly rewarded in terms of wages, decent conditions or the long-term security of your pension, regardless of how hard you work and whatever skills you have in the industry as it now stands.” That is why it is critical that we take a lead in this matter and bring all the stakeholders together.

[Karl MᶜCartney (Lincoln) (Con)]

I have issues with Network Rail in my constituency, and I am interested to hear some of the information that the hon. Gentleman has given this evening, especially regarding the new chief executive. Does he think that the mindset of Network Rail has changed?

[John McDonnell]

I hope that it has. With the new chief executive, there is the potential for more openness and engagement. The previous chief executive even refused to meet a number of us on one occasion, although some of the less senior staff did.

I urge the Minister, as a matter of urgency, to get all the stakeholders in the industry together to look at the future of rail engineering and the skills base that we require. In that way, we can start planning the future of rail engineering on the basis of the needs that we now have, particularly as a result of the new investment that the Government are putting in. As I said, I think that this is a matter of urgency.

I save my last few words for the ex-Jarvis workers. I think that they have had an appalling deal and have been treated extremely badly. It behoves us as a House and those who are now in government to do everything we can to assist those workers to get back into work and to restore the dignity of work to them.

Rail Investment

John McDonnell Excerpts

Thursday 17th February 2011 Westminster Hall

[Mrs Ellman]

Thank you for chairing this important and interesting debate, Mr Owen. I thank the Minister for her response. I am pleased to see my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) acting so effectively in his new position. We have had a constructive debate, and I thank all hon. Members who have participated, including Select Committee members and others who find the issue important enough to have spent time and spoken here. The range of contributions underlines the importance of investment in our railways. Contributions have addressed the importance of investment in local stations, of local services and of developing capacity, whether in local, regional or high-speed rail services. I listened carefully to the Minister’s response. She has given some assurances. The Select Committee will be following up the promises and commitments that she made, and will take up the various points raised by hon. Members.

The report that we have been debating was concluded a year ago, but it is significant how highly relevant many of its recommendations and the issues that it raised are today. The Select Committee’s work is enhanced by the involvement of many Members. I assure all hon. Members here that we will be pursuing all the points that they have raised in our questions to Ministers and others responsible for delivering our services, and in new inquiries. I thank everybody for their constructive participation.

[John McDonnell (Hayes and Harlington) (Lab)]

I apologise for coming so late. We were engaged in debate in the main Chamber. When the McNulty report is published, I urge the Select Committee to consider it in detail and give us the opportunity for a further debate based on the Committee’s consideration of the recommendations.

Coastguard Service

John McDonnell Excerpts

Wednesday 2nd February 2011 Westminster Hall

[Mike Penning]

The hon. Gentleman will have to bear with me because I have two minutes left.

We should not sit back and, on behalf of our constituents, say that we think all stations can stay open and that everything is fine. I know that the previous Government looked at the matter because it was on the table when I was appointed. My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick)—I call him my hon. Friend because we have been friends for many years—has been sensible and this has been quite a sensible debate. What worries me is that, when hon. Members go home, they will say to their local papers tonight—I have seen such things in the papers that land on my desk in the morning—that lives are at risk and are going to be lost. The headlines will be : “Cuts to your service,” “Cuts to the frontline,” “Cuts to this.” That is not going to happen. There will be job losses. Some will be voluntary and some will be compulsory.

[John McDonnell (Hayes and Harlington) (Lab)]

Some 200 jobs are going.

[Mike Penning]

We do not know the numbers.

[John McDonnell]

On a point of order, Mr Hancock. The Minister has made reference to the unions agreeing with his proposals in some form. I would not wish him to mislead the House. I chair the Public and Commercial Services Union group in Parliament. That group represents 500 members who will be affected. The unions have not supported these proposals and will not accept 220 jobs being cut, which they believe will put lives at risk.

[Mr Mike Hancock (in the Chair)]

That is not a point of order, Mr McDonnell, but an issue for debate. There are 30 seconds left.

High Speed Rail

John McDonnell Excerpts

Monday 20th December 2010 Commons Chamber

[Mr Deputy Speaker]

And now the ever-patient John McDonnell.

[John McDonnell (Hayes and Harlington) (Lab)]

Thank you, Mr Deputy Speaker. I say to the Secretary of State that I am just grateful we are getting a train set for Christmas and not a third runway at Heathrow. He has referred to the Heathrow link, the Mawhinney review and the Arup proposals for a transport hub near Iver and has concluded that there should be a spur to the airport running close to the M25. Does that mean that the Iver hub will or will not take place?

[Mr Hammond]

We do not favour the proposal for the Iver hub as a way of delivering high speed rail passengers into Heathrow. It is worth noting that the proposals that Arup worked up on its own account—it was not commissioned to do so—around the hub at Iver were originally intended as a proposal for getting traffic from the Great Western main line into Heathrow. HS 2 came along as a bit of an add-on to that proposal, and Arup may still wish to pursue it as a proposal that is of interest for that purpose, but it is not our preferred route for getting high speed rail passengers into Heathrow.

Severe Winter Weather

John McDonnell Excerpts

Monday 20th December 2010 Commons Chamber

[Mr Hammond]

We will, and my hon. Friend’s question has to be addressed to the operators. British Airways made the call on Saturday morning to cancel all flights, because it considered it certain that the airport would have to close. I have spoken to Willie Walsh today, and he has told me that based on the forecast he saw on Saturday morning, any airport anywhere in Europe, bar none, would have had to close. BA therefore made the decision to pull all its flights.

The lesson that is emerging for BAA, which it will take away from the situation, is that it has to be more proactive in examining forward forecasts, and that when airlines do not make a decision to stop flights, the operator might have to make that decision for them, to avoid large numbers of people being stranded in terminals.

[John McDonnell (Hayes and Harlington) (Lab)]

I hope that the Secretary of State will join me in thanking many of my constituents and their colleagues who work at Heathrow for trying to get the airport open and fully operational again in the most difficult circumstances.

I join the hon. Member for Wellingborough (Mr Bone) in saying that the lesson to be learned from the last occasion when such a problem occurred, although not on the same scale, was about information. We thought that lesson had been learned. BAA and the individual airlines must be required not only to take decisions soon enough, but to communicate them proactively and directly to customers travelling with them.

[Mr Hammond]

I am grateful to the hon. Gentleman for giving me the opportunity to record my thanks, and the thanks of the Government, to the hundreds of workers who have been out, often in temperatures of minus 10°C or minus 11° C, clearing snow and de-icing through the night, as well as caring for passengers stranded in terminals. They have done a fantastic job, and I am afraid they will have to go on doing that fantastic job for the next few days.

The hon. Gentleman is also right to focus on information. Nobody likes to have their travel plans disrupted, but one of the interesting features of human psychology is that somehow, things are never quite as bad if people know what is going on. As he will know, we have committed to introducing an airport economic regulation Bill during this Parliament. One thing that we are committed to doing in that Bill is ensuring that airport operators’ financial incentives are clearly aligned with the needs and interests of passengers. I will ensure that supplying information is part of that matrix, so that the operators will do it because it is in their financial interests. That certainly seems to be a motivating factor.

Rail Investment

John McDonnell Excerpts

Thursday 25th November 2010 Commons Chamber

[Mr Hammond]

The question of brand-new rolling stock versus cascaded rolling stock depends ultimately on the business case that can be made. It is expected that some brand-new rolling stock will be deployed on the Greater Anglia franchise. I cannot tell my hon. Friend that that will necessarily be used on the London-Ipswich-Norwich line, but it is expected that there will be some new rolling stock in that franchise.

[John McDonnell (Hayes and Harlington) (Lab)]

I associate myself with the statements made by my hon. Friend the Member for Ealing, Southall (Mr Sharma). On the High Speed 2 consultation, will the Government be expressing a preference about the Heathrow link based on their acceptance of the Mawhinney report? While the Secretary of State is at the Dispatch Box, will he say when the interim McNulty report will be published?

[Mr Hammond]

Sir Roy McNulty’s interim report will be published shortly. I intend to make a statement to the House in the near future about how we intend to take that process forward, looking at the structure and affordability of the railways. I should make it perfectly clear that the consultation on HS 2 will be around a preferred route. It will be open to other parties to suggest alternative routes, but the Government will put forward one preferred route.

Railway Industry

John McDonnell Excerpts

Tuesday 19th October 2010 Westminster Hall

[John McDonnell (Hayes and Harlington) (Lab)]

I shall make several brief points. I refer to my entry in the Register of Members’ Financial Interests: I chair the RMT parliamentary group, as the Minister will know. We are hoping that through the National Union of Rail, Maritime and Transport Workers, the Transport Salaried Staffs Association and ASLEF, we can have a dialogue with the Government during this key period when critical decisions are being made about the future of rail. I would welcome an early ministerial meeting to discuss the interim McNulty report when it is published in November. It is a pity that it was not published before the comprehensive spending review, because it would have been helpful to see whether it influenced some of the decisions that will be announced tomorrow.

The RMT group met with Roy McNulty last week for an informal discussion of some of its concerns about what happened in the past and what seems to be occurring under this Government. We were hoping that there would be a more objective discussion about the future structure of rail in this country, but it appears that any prospect of looking at an integrated railway system under public ownership—even some element of public ownership in the structure which would enable a public sector comparator—has been ignored again.

I still cannot comprehend why we cannot at least consider using one of the franchises as a public sector comparator. We know from the experience in the south-east that when Connex was brought back into public ownership for a period, it ran more efficiently, more effectively and more profitably than most other franchises across the country. We hoped that the previous Government would at least maintain it in public ownership so that there could be a public sector comparator.

If Members trawl through Hansard, they will see question after question over past years in which Ministers were asked why we cannot have a public sector comparator. They were also asked what calculations and assessments had been made in respect of other systems across Europe that are under integrated public ownership, so that we could at least make some judgment of the private franchising system that has been in operation in this country for the past two decades.

Several lessons have come out of independent comparisons. It has been found that integrated systems under public ownership, without a panoply and multiplicity of various agencies—my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) listed 24 different companies and four or five regulatory bodies or Government decision-making bodies—are more efficient as well as more cost-effective. I am concerned that in Mr Roy McNulty’s review there is still a prejudice even against examination of a public sector option or role in any part of our system beyond Network Rail.

Briefly, on investment, the rail industry overall, including management and unions, hopes that commitments will be given by the Government in the comprehensive spending review statement to high-speed rail—we look forward to the consultation starting in January—and to Crossrail. That would at least allow us to see a longer-term future for investment in the infrastructure that we so desperately need.

I compliment the previous Government, who at least committed themselves to Crossrail and to bringing forward high-speed rail, although I was critical of some of the delays in investment. We need this Minister to tell us that that long-term programme is secure.

The hon. Member for Newton Abbot (Anne Marie Morris) discussed rolling stock. Even under this Government, we need a discussion about investment in rolling stock, which would stimulate British industry rather than the import market. With a limited amount of investment and a commitment to the purchase of rolling stock, there is potential to rebuild the rail manufacturing base in Britain. This relates largely to what my hon. Friend the Member for York Central (Hugh Bayley) said about the loss of skills over years if we do not invest in the rolling stock manufacturing base of our country.

Any lifting of the cap on protected fares will fly in the face of everything that the Government, when they were in opposition, said about their commitment to the development of rail as one of the key transport mechanisms that will help us to protect our environment. The threatened increases of anything up to 37% to rail fares on some routes, and now the threat of increased fares on London underground, undermine the Government’s green credentials from the outset. I hope that there will be some acknowledgment in the comprehensive spending review of the role that rail plays in tackling climate change, and therefore the importance of maintaining fares at a reasonable level.

Passenger numbers have increased dramatically over the past 13 years, largely as a result of the increase in economic activity. As we go into recession, there will inevitably be a reduction of passenger usage, and there will be a temptation to make up the funding gap by increasing fares. That would be completely counter-productive: it would push more people off public transport and, as a result, have a dramatic impact on our policies to tackle climate change and our environmental policies overall.

Finally, let me raise a staffing issue. The treatment of the Jarvis workers was a disgrace. The way in which they were notified of the loss of their jobs was appalling. They have almost been turned into roaming serfs looking for work. We hear stories of people having to move around the country on zero-hour contracts, and even of people putting up camps near to where they can bid for work the following day.

I raised the matter with the previous Government and said that there should have been an intervention by the Government and Network Rail, and that the contracts and staffing levels could have been maintained. Things were badly handled then, and there is a need for this Government to intervene now, because this is not just about how individual staff are treated; it is also about the expertise that we need for the future.

Surely to God we have learned lessons in the past that if we do not maintain expertise, and therefore do not maintain the track effectively, there will inevitably be accidents, loss of life and serious injury. We have had so many inquiries—surely we have learned the lessons. I urge this Government to intervene, to look at what happened in the displacement of ex-Jarvis workers and their expertise, and to see what can be done to secure not just their jobs but also their expertise for the long term.

[Julie Hilling (Bolton West) (Lab)]

I declare an interest in the debate, as I have a constituency development plan with the TSSA.

On the staffing point, does my hon. Friend agree that if we break up Network Rail, we will create not only more insecurity for workers, but a bidding structure for them? When rail was first privatised, the bidding war for drivers made the cost much more expensive because each franchise then bid for certain expertise.

A more important issue is safety. Already there is erosion of track inspection and other safety elements. If we fragment the industry further, especially track control, we will certainly make accidents, such as those at Grayrigg, Hatfield and so on, more likely.

[John McDonnell]

I could not have said that more eloquently. My hon. Friend makes an extremely valid point. I urge the Government to tread carefully when making decisions on franchising and the integration of track with operations, because we have seen what has happened elsewhere. Mr Armitt said that when companies have gained franchises in other sectors, they seek to “sweat the assets” to maximise their profits. That eventually has an implication for safety. Having a nationally integrated system would overcome those issues.

My hon. Friend also referred to the transaction costs involved both in that sort of breaking up and in individual franchising. The Government should carefully examine Roy McNulty’s work and the transaction costs that will result. On London Underground, I was assured by the previous Government that Metronet was a one-off failure and that Tube Lines would be secure, but we then had the failure of Tube Lines. The estimated cost of those franchises and setting up the public-private partnership was £400 million on consultancies, accountants and lawyers alone. The Government should learn lessons from the past.

On London Underground staffing, despite what people read in newspapers, RMT and TSSA have taken industrial action because 800 jobs will go if London Underground does not reconsider its position. Those 800 staff are based at stations including Hayes and Harlington in my constituency. If we lose those staff, we lose security and safety at those stations in the lead-up to the London Olympics. We are trying to put on a display for the world so that when people come here to enjoy the Olympics, they can travel in comfort and absolute safety. It would be a retrograde, short-sighted step to lay off those 800 staff, particularly at this key time.

I urge London Underground to return to the negotiating table and to seek a settlement with the two unions. Otherwise, there may be a long, bitter and protracted dispute that will affect the travelling public in a way that will jeopardise their safety in the long term. The dispute is a principled one. It is not about wages, but about looking after the safety of the travelling public. That is why I support it and have appeared on picket lines. There may be a role for the Government. If London Underground remains intransigent, the Government should intervene, because the matter is important.

I welcome this important debate engendered by my hon. Friend the Member for North Ayrshire and Arran. I urge the Minister to meet the union groups, to discuss the McNulty report on the long-term future, and perhaps to return to the matter in six months to monitor progress on the Government’s initial decisions.

--- Later in debate ---

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

I congratulate the hon. Member for North Ayrshire and Arran (Katy Clark) on securing the debate, and congratulate the shadow Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), on his recent appointment and his first address from the Front Bench.

I thought that it would be useful to consider the questions that the hon. Lady helpfully repeated at the end of her speech. First, she asked whether Sir Roy McNulty’s work is informing the comprehensive spending review. Neither his interim report nor his final report have yet been published or finalised, but I can assure the hon. Lady that Sir Roy has kept my right hon. Friend the Secretary of State and officials at the Department for Transport informed of his work, so that is feeding into the decisions being made on the comprehensive spending review. The early draft work, as it has been going ahead, has helped us to feed into the Treasury process and the CSR.

The hon. Lady also asked whether I would write to the executives of the rail operating companies about remuneration.

[John McDonnell]

Before the Minister moves on from the McNulty report, I point out that I asked whether she would meet the rail unions to discuss the McNulty report when the interim report is published in November.

[Mrs Villiers]

I was going to come on to that, but I am happy to answer it now. I have slight qualms about this while the industrial action is continuing on the London underground, because I am concerned about the huge inconvenience that that is causing passengers. As the hon. Gentleman is keen for me to meet the unions, I am happy to do that, but I would still urge them to find an alternative way to resolve their dispute on the London underground.

[John McDonnell]

The two issues are unconnected. We will make sure that the right hon. Lady can travel on a non-strike day.

[Mrs Villiers]

I suppose that I am particularly sensitive about the issue because the day on which I was due to meet the Transport Salaried Staffs Association coincided with a strike day so, for all sorts of reasons, it seemed inappropriate to go ahead with the meeting.

Turning to remuneration in the rail industry, the level of pay across the industry clearly needs looking at in the context of the McNulty review. I have discussed remuneration levels with the train operators, and I expect that dialogue to continue.

The hon. Lady’s third question was about introducing a windfall levy for the train operators. The Government have no plans to do that. Her fourth question was whether I would meet her and colleagues to discuss those who—tragically for them—were made redundant by Jarvis. Yes, I would be happy to do that.

On the franchising review, the hon. Lady asked specifically about a clause on ScotRail and she will appreciate that that is a matter for the Scottish Government, but she also asked a wider question about the approach that the UK Government will take in relation to the franchises for which we are responsible. I am not convinced that we should have a blanket withdrawal of that type of indemnity clause; there is a place for such clauses in appropriate circumstances. She then asked whether the McNulty review, and the Government considerations flowing from it, would look at an expanded role for the public sector and additional nationalisation. That is certainly one of the options that Sir Roy will consider.

The hon. Lady also asked about ticket offices and the loss of guards. In many cases those are matters for those operating services, but the overall approach in relation to the franchises is governed by the ticketing settlement agreement. We need to look at reforming that, to ensure that we get it right, but it is obviously important to consult properly with the communities affected by the decisions.

The hon. Lady also talked about the strike action on the London underground and the loss of guards. I am convinced that we need to modernise working practices in the rail industry. I am concerned, as I already said to the hon. Member for Hayes and Harlington (John McDonnell), about the damage to the London economy caused by the strike action that is taking place. We have to recognise that the way in which people buy tickets has changed, and that rightly will impact on London Underground’s decisions about the deployment of its staff.

[Mrs Villiers]

Forgive me; I am probably trespassing on devolved matters because the relationship between London Underground and its employees is of course a matter for which the Mayor is politically accountable. I have to say, however, that of course I am concerned about security for women using public transport—I am a woman myself—but there is a real argument for saying that staff deployed on platforms are more valuable to passenger security than those stuck behind ticket office windows. I am not sure, therefore, that the security issue can justify the retention of ticket offices. Security focuses on whether people have access to staff in stations, which is not the same as whether a ticket office is open.

I shall go on to some of the wider issues addressed by the hon. Member for North Ayrshire and Arran. I would like to assure the House that the coalition has put rail at the heart of its strategy for transport, in terms of re-energising our economy, reducing carbon emissions and addressing congestion on our roads. I welcome the support shown today for taking into account the concerns of both passengers and rail freight—a point rightly made by the shadow Minister. Much will depend on the announcements made tomorrow in the spending review. It is clear that transport will not escape the pain that is the unfortunate consequence of the deficit that we have inherited from the previous Government, but I emphasise that the Chancellor has made it clear that he recognises the economic benefits of investment in infrastructure to support economic growth, and that he recognises in particular the importance of investment in transport infrastructure.

The shadow Minister asked me about Crossrail. I am sure that he welcomed, as I did, the support expressed by the Chancellor at the weekend for the Crossrail project. We have also expressed clear support for Birmingham New Street, we are taking forward plans on high-speed rail and we are working very hard on Thameslink. Our focus in all those projects is to ensure that we value-engineer costs down to keep the projects affordable and deliverable within the spending envelope that is now available.

[John McDonnell]

I emphasise that, although there is a commitment to the Crossrail project overall, people are concerned about the paring down of the project and the missed opportunities that might result from that. For example, in my own constituency, Hayes and Harlington station is to be redeveloped. If there is any paring down in the investment of such station projects, we will miss the chance to include modal transfer opportunities and to ensure the integration of our local transport network.

[Mrs Villiers]

Both the Secretary of State and I have repeatedly talked about our support for delivering the whole project, and it is worth bearing in mind the excellent work done by the team behind Crossrail to find lower-cost ways to deliver the same transport benefits, and to deliver the whole project.

It is true that there has been significant good news on the railways in recent years. Since privatisation there have been some striking successes, with train punctuality now at record levels and a significant increase in the number of passenger journeys. Also, the number of miles travelled on the railways has gone up by 75%. Since privatisation, therefore, a story of managed decline has been transformed into one of significant growth. Although the recession has subdued that trend to a degree, we expect it to resume once the economy recovers.

So, that is some of the good news about the UK’s railways. But the downside is that the cost of running the railways did rise dramatically under our Labour predecessors. If we are to deliver the improvements to services and capacity that hon. Members have called for today, and that passengers want, we have to find a way to get costs down. The disastrous deficit left for us by our predecessors makes it essential that we drive out cost inefficiencies on the railways, and we owe it to passengers to do our very best to get costs down.