Railway Industry

Julie Hilling 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.

[Mr Mike Weir (Angus) (SNP)]

I welcome this debate, and I congratulate the hon. Member for North Ayrshire and Arran (Katy Clark) on securing it and on making a wide-ranging and knowledgeable speech about the railways, despite her inability to avoid a quick stab at the Scottish Government.

I want to concentrate on two areas that concern my constituency—the future of the east coast rail line and the plan for the high-speed rail network, both of which are vital to our economic future. The east coast line is vital to the north-east of Scotland because it provides the major cities of the north of England direct access to London and, importantly, to the cross-channel network through the Eurostar and Eurotunnel and, I hope, to Germany if the proposed connections to German cities come to pass. The line provides an important link for business and tourism and is a vital economic asset.

I have had serious concerns for some time about the future of services on the line, especially north of Edinburgh. I raised those concerns as far back as July 2009, and when the franchise went from National Express to East Coast. The line north of Edinburgh has long been a problem because it is not electrified, so it has been difficult to reduce journey times from Aberdeen to Edinburgh. When the previous Government committed themselves to purchase new dual electric-diesel trains to run the whole length of the line, there was considerable hope that that would lead to a reduction in journey times.

When the franchise was transferred, Lord Adonis, the then Secretary of State for Transport, assured me and others that there was no danger of cutting services north of Edinburgh. Unfortunately, shortly before the general election, he postponed the purchase of the new trains and left the decision until after the election. I thought at the time that that was an ominous sign, and so it has proved to be. The new Government have twice postponed the decision, more recently until the comprehensive spending review, which is due tomorrow. That has the ring of a death knell for the contract to purchase those trains.

I appreciate that the Minister will not tell us today, before the Chancellor’s announcement, what will happen, but I remain gloomy about the prospect for those trains. The matter is important, and I asked her a written question about the services north of Edinburgh. She replied:

“The current level of direct services between London and Aberdeen and Inverness will continue to be provided when the new East coast line timetable is introduced in May 2011.”

So far, so good, but unfortunately, she continued:

“The longer term future of direct services between London and Inverness and Aberdeen will be determined by forthcoming decisions on replacement of the current rolling stock.”—[Official Report, 16 September 2010; Vol. 515, c. 1244W.]

The Minister may say that I am wrong, but alarm bells rang because she seemed to be specifically linking the services to the rolling stock and, by implication at least, if the rolling stock is not purchased, long-term services are at risk. If I am correct, that is a short-sighted way of looking at the future of this important line because its importance is not only economic.

The coalition Government claim to be the greenest ever, but that seems to be a pretty shaky claim if they do not consider the need to reduce carbon emissions by providing more rail than air transport. Failure to provide regular services from the north-east of Scotland will seriously impact on that. I have used the line many times to travel down to London. I take the train from Montrose in my constituency, and it takes around six and a half hours to get to King’s Cross. From Aberdeen, the journey is around seven hours. Clearly, that is a long train journey, and business men coming from Aberdeen, which is Europe’s oil capital, are faced with the option of taking a plane from Aberdeen airport, which takes approximately one and a half hours to London. Even taking into account the time taken to check in and to get in from Heathrow, it is clearly quicker to go by air. However, even with the existing service, for someone travelling from Edinburgh the decision to travel by air or train is much more marginal.

The point is that if we are serious about moving travellers, particularly domestic business travellers, from air to rail, the issue that must be addressed is not just price, but time. We must ensure that there is a realistic alternative, and that can be provided only by speeding up journey times. I appreciate that the proposed new trains are not a magic bullet for the problem, and that the decrease in journey time provided by the trains alone might not be all that significant. The line has various other problems, not least the physical restraints at Montrose in my constituency, where part of the line is single track and the geography of the area makes it difficult for it to be dualled. However, the proposed dual fuel trains would send a clear signal that the Government are serious about investment in the railways, and in ensuring that we continue with the regular and worthwhile service that links Aberdeen directly with London and through to the continental mainland. Unless we look at such proposals, we will undoubtedly fail to persuade people to switch from air travel to rail, even if the Government use taxation to push up the price of flying.

[Julie Hilling]

I am interested in the hon. Gentleman’s point about trains and the green economy. Does he agree that electrification pushes all the buttons for the green economy? Electrification makes trains greener, it is better for the environment, it increases the speed of the train and reduces the wear on the track. We must continue with electrification, particularly in my constituency where the previous Government were committed to the electrification of the lines between Liverpool and Manchester, and Manchester and Preston. Electrification speeds up journeys; today, a person would be crazy to take an aeroplane from Manchester to London, although that option was frequently used in the past. Electrification is a key part of the argument.

[Mr Weir]

The hon. Lady makes a good point. Whether electrification is greener than its alternative depends on how the electricity is generated, but that is an associated issue. However, she is right that the faster train journeys can be made, the more likely it is that people will use the train rather than travel by air. That is my point. Flying to London from Manchester or Birmingham no longer makes sense, but it does make sense to travel from Aberdeen by air unless something is done to speed up the train line. I appreciate that that is not easy to do, but the Government must look at the issue seriously.

My other point is about the high-speed rail network. The Government have announced their proposal to go with the Y route, which would run up the centre of England to the north-east and the west coast. It will speed up journey times and, if I understand it correctly, link up with the east coast line and provide a slightly faster journey time at least as far as Edinburgh. As it stands, however, although the proposal will considerably speed up rail travel to the north of England, it does not address the central problem of taking the line further north into Scotland. If the Government are serious about the issue, we must look at an extension of the line to ensure faster travel times from Scotland and encourage people away from the longer domestic flight routes. Unless we do that—and the same argument goes for the east coast—we will not get the green benefits that we hope for. As it stands, if I were to use the high-speed line to get home, I would probably have to change train twice to get to Montrose, and that will not significantly reduce the journey time.

--- Later in debate ---

[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.

[Julie Hilling]

Does the Minister consider important the feeling of safety of passengers travelling on the underground, and on the rail network generally? Stations can often be very lonely, scary places for all rail users but particularly for women travelling alone. The fact that we have staff in ticket offices and on platforms increases both the feeling of safety and the actual safety.

[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.