Network Rail

Kelvin Hopkins Excerpts

Thursday 2nd February 2012 Westminster Hall

[Kelvin Hopkins (Luton North) (Lab)]

I congratulate the hon. Member for St Albans (Mrs Main) on a first-class speech. I agreed with almost every word she said, but I am afraid that I do not share the rosy view of Network Rail that the hon. Member for Reading East (Mr Wilson) expressed.

[Mr Wilson]

It was my experience.

[Kelvin Hopkins]

It is not my experience. I have had many contacts with those who have worked in the rail industry over the past 15 years and before, and I have heard a stream of criticism from people fearful of being exposed because they would be victimised if their names leaked out. To illustrate that point, I deliberately forget their names, but I have heard a lot of very disturbing details.

I have a passionate interest in railways and have supported them since I serviced the TUC transport committee in the 1970s. I have been a rail commuter on Thameslink for 43 years, and have travelled through St Albans in that time. I have always believed that railways are the transport of the future, which was not the view of the Department for Transport until recently—quite unexpectedly as far as it is concerned, there has been an enormous surge in rail passengers in recent years. Despite higher fares and travel problems, people have chosen to use the railways, which confirms my view that they are the transport mode of the future. There has been much investment over the past 15 years, which has been expensive, but we need a lot more of it.

Privatisation has been a hugely expensive mistake. Indeed, a Department for Transport official was heard to say privately at the time that privatisation was intended to facilitate the decline of the railways. That was the Department’s view then. It was thought that the railways were a diminishing form of transport and that eventually we would all move to our cars. The great mistake, of course, was to divide the railways between Network Rail and the train operators—to separate track and train. No other country in Europe has chosen to privatise their railways. They have seen the mistake that we made, and the problems that that caused. There have been accidents and there are serious safety problems, even now, and of course there has been a massive increase in costs.

As my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), the Select Committee Chair, said, Railtrack was an appalling organisation. In the foyer of its headquarters it had an electronic indicator showing its share price. That is what it was concerned about—not serving the public, or safety. Eventually, of course, the previous Government were forced to abolish it and to come up with another solution. I understand that a private conversation took place in Downing street for several hours, between Stephen Byers, Tony Blair and the then Chancellor of the Exchequer. Tony Blair got bored after a certain time and walked out, saying “Well do what you have to do, but no nationalisation.” So they came up with the strange beast called Network Rail, which is neither nationalised nor privatised, and has no effective accountability at all. We have had not just privatisation but fragmentation—but that fragmentation was based on some economic theory, which was once explained to me by an economist. I said, “Costs were supposed to go down, but they went up massively.” “Yes,” he said, “our theory didn’t work.” Well, why do they not just reverse what they did and reintegrate and renationalise the railways?

There has been a massive increase in costs, in both public subsidy and fares, and, as Sir Roy McNulty concluded, at one point, our railways were up to 40% more expensive than continental railways. I have said in the Chamber, and to Sir Roy, whom I have met twice with my hon. Friend the Member for Hayes and Harlington (John McDonnell), that the big difference between continental railways and ours is that the continental ones are publicly owned and integrated, while ours are privately owned and fragmented. I do not think that he was listening to me, because he clearly had his card marked, “Whatever you do, no public ownership: find another solution.” One of the things that he has done, which I completely disagree with—the railway unions have made the point—is to consider staffing cuts. The staff on the front line have apparently been judged very efficient. They are not the problem, or the ones who cause the costs, but they are the ones who will have to pay the price, because in place of a challenge to what Network Rail does, there will be cuts to staff in stations at night.

Network Rail is a dysfunctional organisation. It is expensive and bloated, and is a law unto itself. I have met David Higgins a couple of times, and I have a high regard for him. He is a decent person, but he has taken over an organisation that is out of control. He has had great difficulty in penetrating that appalling organisation. Network Rail is a rogue organisation, and impenetrable. I have described it as an entrenched management mafia. I understand that within the organisation David Higgins suffers a degree of hostility, because every time he tries to change anything he is resisted. That is not just within the management structures; even at board level he suffers from those problems. It is down to the Government to back him up when he wants to do things, and to break the stranglehold of the corrupt management that has been there so long.

The vice-like grip of the old guard stems back to Railtrack days, and even though it was abolished some of the same people—and the same practices and culture—carried on. As I have said, I have had dozens of conversations over 15 years with staff and former staff, and they are all fearful of being whistleblowers, and I can understand why.

[Mrs Main]

The hon. Gentleman is making a valid point. Some people have said to me that Network Rail is just Railtrack by another name, but with a large bung from the Government.

[Kelvin Hopkins]

Indeed, and without any proper accountability. As the hon. Lady has said, there is no means to control it.

The bullying culture in the organisation was appalling. Anyone who stood out against, challenged or criticised it, or said that things could not be done, was sorted out by a head of human resources, who has, I think, recently been paid off with a substantial sum, rather than sacked. For years he was protected by senior management. On several occasions he sacked people and, when threatened with a tribunal, settled out of court, eventually. Just to pay off staff whom he had sacked cost many millions of pounds. Eventually he was paid off to go elsewhere. He was symbolic of a culture that was about control and bullying, and making sure that individuals looked after themselves within the organisation.

[George Freeman]

I did not want to interrupt the flow of the hon. Gentleman’s interesting description, but he appears to be giving the impression that we should simply return to the days of old—of British Rail and an integrated national system. Many of us in the Chamber will remember British Rail, which was hardly a paragon of efficiency, investment or good service. Is that indeed what he suggests?

[Kelvin Hopkins]

Indeed, I shall come to that shortly. In fact, British Rail was starved of money and did a remarkably good job in the circumstances. Those are not my words. That is how it was put by Tom Winsor, the former rail regulator, who said that British Rail worked miracles on a pittance, and that when it was handed over to the privateers it was “in good order”. A Catalyst report some years later made comparisons between British Rail and continental railways and found that British Rail’s productivity was the highest of all the European railways. That is not true of our railways now, but it was then. However, British Rail was starved of money because there were several Governments, and a Transport Department, that did not believe in railways. They thought that they were dying and did just enough to keep British Rail alive.

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

Apart from the Catalyst study, most recently Christian Wolmar demonstrated that rail now has three times the subsidy that British Rail had, so there has been a tripling of subsidy and an increase in inefficiency, with higher fares.

[Kelvin Hopkins]

My hon. Friend is absolutely right, and of course that includes paying for the bloated, self-interested mass of people at the heart of Network Rail.

I like to think that David Higgins is possibly the right man for the job in the appalling organisation we have, but he has a difficult job at the moment. During the time in question there have been the accidents at Grayrigg, Potters Bar and Hatfield. There has been pressure for prosecutions, but Network Rail has constantly said “Not our fault.” It has tried to escape and avoid blame. As to the recent accidents on level crossings, it is interesting that just in the past couple of weeks David Higgins personally apologised to the parents of the two girls who were killed. That is a different attitude from that of previous Network Rail management.

[Mr Brian Binley (Northampton South) (Con)]

I do not quite have the same memories as the hon. Gentleman of British Rail, but I shall let that go and take up a more positive point, about the role of the regulator. We have got that totally wrong. It is ineffective. Is not that where we need action to help David Higgins?

[Kelvin Hopkins]

That is another point I was going to make: regulation. At the time when Tom Winsor left the Office of the Rail Regulator, there was talk in Government circles, which leaked out, that the Government—the Treasury and, indeed, the Department for Transport—wanted light-touch regulation. They did not want the ORR to regulate too hard, because that might damage profits. It might make privatisation less popular. If a regulator of any kind is told “Light-touch regulation”, they will either go along with it and take the money, or say “I am not going to be blamed for things that go wrong,” and stand down and do something else. I suspect that that might have been the case with Tom Winsor, but there we are.

The Government must take hold of the matter. The speech today by the hon. Member for St Albans has started, I hope, to move the tectonic plates. Governments and Network Rail management have refused for years to face the problems, and the costs have been massive. If the Government want to save money, one way to do it would be by sorting out Network Rail. I suggest that they should first make it a proper public corporation again: one that is transparent and accountable—ultimately to Parliament through the Secretary of State—and subject to freedom of information inspection. There are inherent problems of cost, but those are caused by the contracting culture. Track maintenance was taken in-house when it became incredibly costly. Time and again I raised with the Secretary of State, under the previous Government, the question why track maintenance costs are four or five times higher than they were in British Rail’s day. The simple answer was that it was about contracting. There was contracting, subcontracting and sub-subcontracting. There were costs at every level whenever the work was contracted out, and of course there were project managers and lawyers negotiating contracts at every level. People were filling their pockets with public money.

British Rail directly employed its own staff at every level, from the engineers who designed and controlled the work to the track layers at the grassroots level. They were all employed in particular areas, so that they had possession and ownership of their own area of track. If things went wrong, it was the engineer’s fault. He was permanently employed and he was accountable. He knew that his life was in the railway industry being employed by British Rail and he had to get it right. In the case of subcontracted staff, perhaps from overseas—they might have signed on as subcontracted staff or contract staff from elsewhere—they disappear after the work is done. Nobody knows who has done the work, and of course there is no sense of accountability and no sense of loyalty. They are just doing a job for the money. That is quite different from the type of attitude that British Rail engineers had. They believed in railways and they were passionate about their work.

There are still many of those BR engineers about today, but they are being abused and rubbished by this appalling organisation called Network Rail, where they are employed as consultants. Network Rail has to depend on them, because they are the only people who know how to do the job, but Network Rail does not inspire loyalty and commitment to the industry. People love railways—I love railways—and when they work inside the industry, they devote their lives to it. It is like loving a work of art. They have those attitudes, which is exactly what we want. We want people back in the industry who are permanently employed, who are responsible for sections of track—their track, and if it goes wrong, it is their fault and they feel totally responsible.

We have an expensive operation. Some years ago, the Department of Transport held an internal seminar on project management and its costs. It invited Don Heath, the manager who had been the guiding light and chief engineer in charge of the east coast main line modernisation and electrification, and it called in the west coast main line privateers. Don Heath was asked how much of his total budget was spent on project management, and he said 1%. The privateers were asked how much of their budget was spent on project management, and they said 50%. It was 50 times more. Direct employment by a dedicated engineer working for BR compared with a mass of private companies and subcontractors speaks for itself.

We want the direct employment of engineers; engineers in charge; engineers who care about the railways; and engineers who are permanently employed and have a life in the railway industry and believe in it. We want committed and responsible people in charge, not fly-by-night subcontractors.

I must not take too long, but I want to raise a few more issues before I finish. I put down an early-day motion a year ago to register my opposition to the use of agency and subcontracted labour. My EDM is quoted in our debate papers. It stated:

“further notes research undertaken by the RMT union and academics demonstrating that the complex network of contractors and subcontractors means there are tens of thousands of rail workers employed by a multitude of companies undertaking renewals and that substantial savings could be achieved if renewals were instead carried out in-house as was the case before railway privatisation”.

I made that point a year ago, and it is still true today.

The Office of Rail Regulation has recently found that Network Rail is in breach of its licence and that

“major asset failures, congested routes and poor management of track condition”

contributed to poor performance of the rail network in 2011.

Standardisation has collapsed as a result of the fragmentation of the railway industry. We have chaotic technical standards imposing massive costs and building up problems for the future. We have trackside land reserves being sold off—asset-stripped for profit—so track is no longer accessible for essential repair work, because the land alongside the track has been sold off. We have blue-sky contracts being issued whereby contractors are paid according to emerging costs. In other words, they can charge what they like; we will just pay the bill at the end of the day. All this needs fundamental change. With the right people at every level in the industry, we can do that, but it depends on Ministers, on Government and on the Department for Transport taking hold of Network Rail and transforming it into something that is fit for purpose.

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

I also congratulate the hon. Member for St Albans (Mrs Main) on securing this debate. I know that offering such congratulations is usually done as an element of politesse in these debates, but I genuinely congratulate her. This debate has been really helpful, and having heard from both her and my hon. Friend the Member for Luton North (Kelvin Hopkins) there is not much more to be said really.

I am really pleased that the hon. Member for Reading East (Mr Wilson) had that wonderful experience with Network Rail, and I hope that that experience is transposed to other constituencies, because it is very rare that we receive such a report about Network Rail. I am also sure that he will want to pay tribute to former Members who have lobbied on behalf of Reading—for example, Martin Salter—to gain the project that he described and bring it to fruition.

I want to address a limited number of health and safety issues, as so much else has already been said about other matters. Before I do so, however, I want to talk about the issue of bonuses. Way back in 2009, I tabled an early-day motion on bonuses, which was a reflection of how unaccountable Network Rail was. On that occasion, I think 51 Members of the House signed that early-day motion, and it seemed to have cross-party support. It urged Network Rail not to go ahead with the payment of bonuses that year, because it was laying off 1,500 track maintenance workers at that time. My understanding is that the bonuses were paid, on some scale.

May I draw Members’ attention to another early-day motion—early-day motion 2681—that has been tabled on Network Rail annual bonuses? So far, 28 Members have signed it. It would be very helpful if that early-day motion was supported. It is worded on a cross-party basis and draws attention to the statement by the Secretary of State for Transport in The Daily Telegraph on 19 December 2011 that

“Passengers would be extremely surprised if Network Rail attempted to award bonuses next year in the light of this action by the ORR”.

I urge hon. Members on a cross-party basis to sign that early-day motion, as well as noting the expressions of concern that have been made today about the bonus situation at Network Rail.

I am interested in rail because in my constituency we have a railway estate at Hayes. It was constructed by the old Great Western Railway and then taken over by British Rail, and it was built to house railway workers. It still is a railway estate, although most of the properties have now been sold off. Nevertheless, it still houses railway workers and their families, so I have taken an interest in rail for the past 30 years, based on the practical experiences of my constituents as they report them to me.

I must say that, tragically, my interest in rail also results from what happened under Railtrack. One of my constituents was one of the drivers killed at Paddington as a result of the tragic accident there, and there was the accident at Southall, which is literally one mile down the track from my constituency, where people were also killed. That accident also involved some of my constituents. So, I have taken a particular interest in health and safety matters on the rail network as a result of those incidents and the dialogue that I have with my constituents who are represented by their unions, the RMT, TSSA and ASLEF.

With regard to health and safety, I want to raise the issue of crossings. A number of Members have waged a campaign over many years to ensure that we rid ourselves of the crossings that we have, which are so dangerous. We heard this week about the findings against Network Rail as a result of the tragic deaths at Elsenham in 2005. Network Rail made a statement—I think it was made in early January—that it is proceeding to eliminate the crossings that it has. It says:

“Network Rail has closed 500 level crossings across Britain since April 2009 and intends to close a further 250 by 31 March 2014.”

My view, and that of many Members, is clear, and it reflects the views of the industry’s workers: the programme for the elimination of crossings must continue, and all high-risk crossings that we have identified must be removed, particularly those on high-speed rails. Replacing them with underpasses and bridges is the only way to ensure people’s safety. All other level crossings should be reassessed, with the ultimate aim of removing them also from Britain’s rail network. Although Network Rail has made its statement about the pace of change up until 2014, I urge it to consider how to increase that pace, to eliminate the risk.

The health and safety risks that resulted from privatisation, particularly from contracting out, are well documented. With Railtrack, there was contracting out—subcontracting—and then there was subcontracting of subcontracts, which meant that there was a failure to manage and monitor the quality of work. That was combined with cuts, particularly in front-line staff, even though there seemed to be a flourishing of management levels of bureaucracy within the company, which resulted in a high risk to workers on the tracks and the trains, including the drivers, and also, importantly, to the passengers. Track maintenance was brought back in to Network Rail, which was a major breakthrough, but we seem to be going down the same path as before, with a combination of a drive for cuts—it is argued that they are efficiency savings, but I would like to evidence that they are direct cuts—and potentially more contracting out. We seem to be replicating Railtrack’s mistakes.

In the current control period, 4, Network Rail is looking for the same level of efficiency savings as McNulty has called for, of about 30%, and they seem to be coming from direct cuts to staff. I shall read out some of the concerns that individual workers and groups of workers around the country have raised, via the RMT. I have met groups of staff as I have held meetings with union representatives. The signals and telecom teams in Scotland

“have been reduced from three to two workers, resulting in a large backlog in maintenance work, leading to the company offering 12-hour overtime shifts in an attempt to clear that backlog.”

That was a criticism we had of Railtrack. Front-line staff numbers were cut and teams reduced, and therefore to achieve cuts and savings long hours of overtime were worked, which had an impact on staff’s ability to maintain safety levels.

Another current concern is that maintenance gangs:

“in Scotland are faced with vacancies being left unfilled. Furthermore, cover is not being provided when gang members take annual leave, are on long-term sick or undertake extended periods of higher-grade duty.”

Again, we had those same problems under Railtrack, with gaps in front-line service provision. The workers also report that budgetary constraints have meant that signals and telecoms teams

“from Carlisle and Warrington are filling vacancies by working overtime. The effect is that gang members are working long and arduous hours with potentially serious consequences for both health and safety at work and the integrity of the infrastructure itself.”

In the north-west of England

“track inspections are now taking place every two weeks rather than the previous once a week inspection regime.”

Members might recall that under British Rail there were track inspections three times a week, so we have gone from that to once a week, and now to once every two weeks. In some of the recent reports, the accidents have been specifically connected to the track, and the lack of adequate inspection.

I can remember the debates in the House about another problem:

“RMT inquiries into the cause of the disastrous overruns over Christmas and New Year 2007/08 found that in the Overhead Line division vacancies were being left unfilled for long periods of time…the Doncaster OHL depot had a staff compliment of 40, however at that time there were 7 vacancies that had been unfilled for some considerable time. This represented a staff shortage of almost 18%.”

Yet another concern is that in

“the Anglia region S&T Teams have also been reduced to 2 workers. Where work is planned and risk assessed in advance this can on rare occasions be an acceptable practice”

because at least management can assess the work that the signals and telecoms team is going to undertake. However, in a rapid response fault team the workers do not know in advance what they are going to face, and when or where they will have work on the track, and that results almost certainly in risk but also in further delays in the work being done properly. Also in the Anglia region there are further reductions in the rate of track maintenance inspections.

What I am trying to point to is that sometimes we need to talk to the people on the very front line of the delivery of the service, which is what a number of us have done. Reports are coming back from around the country that because of the pressure under control period 4, which is looking for 30% cuts—and under the McNulty recommendations they will roll into control period 5—front-line staff are being cut and the number of inspections reduced, which will inevitably lead to the same problems we had with Railtrack, which resulted in one of my constituents dying.

[Kelvin Hopkins]

I support everything my hon. Friend has said about inspections and track. A little over 10 years ago, in the last days of Railtrack, I was asked by a friend from inside the industry to look at the track north of Hadley Wood tunnel, which is not far from where I live. It is a significant bit of track. My friend was seriously concerned, and wanted me to raise the matter with John Prescott, who was then responsible for railways. I did not manage to get down with my camera because I was too busy. Just north of that track are Potters Bar and Hatfield. I think that the two might be connected.

[Andrew Rosindell in the Chair]

[John McDonnell]

I can only state as baldy and starkly as I can that what my hon. Friend has just said is that we have been here before, under Railtrack, and that we seem to be replicating the experience under Network Rail. Everyone wants to look at the drive for efficiency and the reduction of costs, but all the reports we have seen so far are not about the lack of efficiency of front-line staff. The increasing costs are a result of the fragmentation of the industry, the division between rail and operations, and the lack of co-ordinated management across the network. My hon. Friend spelt out very clearly in his speech that that is where we fail in comparisons with the rest of Europe, where there is an integrated railway system that enables those efficiencies and economies of scale to be made. Network Rail is looking for savings and efficiencies in the worst possible way, by reducing front-line staff and increasing the pressure on specialists working on the ground, which results, I think, in increased risks to the health and safety of workers and passengers.

Will the Minister clarify when the Government’s White Paper is to emerge? I hope that we can have a genuine debate on the document and that we can go at it with a blank sheet of paper, a tabula rasa for putting our ideas back in. I hope that we do not have prejudices against public ownership, but that we look at what will work. The lessons from Railtrack, and now from Network Rail, are about investment in front-line services and about ensuring that if we are looking for savings we do so by overcoming the fragmentation. We must support those people working at the front line under the tiers of bureaucratic management we have had for decades, under both Railtrack and Network Rail.

Those are just reports collected from across the country. One exercise we could do during the discussions on the White Paper—I know we have done this before—is an extensive consultation across the country with the trade unions that represent front-line workers to get a feel for what is happening on the ground. Ultimately, it was the workers on the ground who exposed what was happening within Railtrack and eventually forced the change. Tragically, that change came too late for a number of my constituents, one of whom was killed in the accident at Paddington while others were seriously injured at Southall. I hope we have learnt the lesson from that and that in the White Paper discussions, we will look to the longer-term future of investing in an integrated system in which workers and passengers have much more democratic control and say.

[Mr Brian Binley (Northampton South) (Con)]

It is a pleasure to serve under your chairmanship, Mr Rosindell, newly come as you are. I congratulate my hon. Friend the Member for St Albans (Mrs Main) on obtaining the debate and on her speech. As many contributors have said, this is a vital debate. I hope that many of her comments will be recognised by the Minister and acted upon, because action is needed.

I pay tribute to those hon. Members who have contributed to the debate. By the nature of their contributions, I know that they take the subject seriously. I want especially to congratulate the hon. Member for Luton North (Kelvin Hopkins), who has a long interest, massive enthusiasm and great knowledge of the subject. It is always a pleasure to listen to him, because he always speaks in such a friendly and good manner, which is a lesson to us all. I welcome this opportunity to discuss Network Rail, which is vital to the nation’s economy and well-being. That underlines the importance of the debate.

I declare an interest as chairman of the Northampton rail users group. Consequently, I will contain my remarks to issues specifically affecting my constituency. On that basis, I wish to explore three themes: the factors that make rail travel from Northampton increasingly unbearable, the urgency with which the rail industry must get a grip on its cost base—a matter that has been mentioned on a number of occasions—and the pressing issue of capacity and the need to face up to what must be done to relieve that pressure, especially for my constituents in Northampton South.

That leads me to the west coast main line, which is the nation’s most important rail artery and has the ability, given supplementation, to add enormously to our economic well-being, especially in Manchester, Leeds and the areas north of Birmingham. The current daily capacity crunch is intolerable for the west coast main line’s users and will become increasingly so as the months and years go by. Network Rail’s most recent assessment is that the line will be full to capacity by 2024. Some expert railwaymen—a number of whom sit on my rail users group, I am pleased to say—would argue that that capacity might be reached quite a bit earlier. So we are talking about an important matter.

[Kelvin Hopkins]

The hon. Gentleman is again making a very effective speech. Two possibilities could alleviate the problem of capacity on the west coast main line fairly quickly: we could develop and improve the line from Paddington to Birmingham Snow Hill to make it an express route, and we could develop a dedicated freight line to free up the west coast main line for more passenger traffic.

[Mr Binley]

I thank the hon. Gentleman for that contribution, which I am sure the Minister has noted. My particular favourite is to ensure that High Speed 2 comes into being and is taken further, to Manchester and Leeds, because there is no doubt that transport systems cannot operate efficiently under the current pressures. That is one reason why we have the problems that we do, and it is one reason why the track is constantly in need of maintenance and repair, which makes the hold-ups even worse. We simply have to relieve that pressure. That is why I am a major supporter of High Speed 2. I argue that we should do our best to bring it forward as quickly as possible. I do not want to see High Speed 2 up and operating in 2030; I would much rather hear the Minister say, “We can make a target of 2024.” If the Chinese can put up a hotel in 14 days, we can do a little better than 2030.

I pay tribute to London Midland, because it has achieved a modicum of success, but that needs to be seen alongside the pressure. I feel for London Midland. I think it has many faults, but it is battling against a difficult situation. I make the point again that Rugby has been a problem in recent months. Rail travellers hate to get off at Northampton to circumvent Rugby by bus or, equally, to circumvent Milton Keynes going the other way.

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[Mr Binley]

Of course, that is right, but because Network Rail is a monopoly in some respects, it needs the Government and the regulator to be its friend and ensure that it operates competitively, but we know from McNulty that it does not. McNulty has also said that there is a subsidy of 31p per passenger kilometre at present, so there is 30% more cost and 31% subsidy. What would happen if those costs were reduced? In addition to the taxpayer and the consumer, there is a third factor in cost setting and cost payment—the train operators. Let a message go out loud and clear that they have a duty and a responsibility to care for their customers in a much more efficient way than at present.

I am concerned about Network Rail’s supply chains and the way in which it bids for jobs. When I was a managing director and wanted to get work done for my business, I would talk to a number of suppliers and ask, “What’s the best way of doing this? How do I achieve the most efficient answer for this job at the most efficient cost?” Are Members aware that Network Rail does not do that? It decides internally what it wants done and then goes to people to tender on the basis of its own decisions about how best to undertake the job. We have talked about the quality of middle management in Network Rail. No wonder that costs are so high when middle management is poor and does not even look for ways to be more efficient by talking to suppliers who know what they are doing in relation to a given task.

[Kelvin Hopkins]

The hon. Gentleman is making yet another strong point. One of the problems in Network Rail is that contractors are required to work rigidly to specifications, even when those specifications are wrong. In British Rail’s day, the engineers locally would find out whether things were wrong and correct them as they went along.

[Mr Binley]

The hon. Gentleman talks some truth. I have never known a business man say that he wants an end product, only to ignore the supplier and say, “I’m not bothered about what you tell me is the efficient way to do it. This is how we are going to do it, because we know best.” But we do not know best—that is the reason why I would get a supplier in the first place.

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[Mark Pawsey]

Absolutely. My hon. Friend will expect me to stand up for my constituents who receive a good service. It is very important that we maintain that service, whether or not high-speed eventually takes place.

My hon. Friend the Member for St Albans referred to the accountability of Network Rail in the costing and management of its projects. Although we have a great new station at Rugby, there are very serious questions about how much it cost to deliver. Some of those questions were aired on the BBC “Panorama” programme on 16 January, when reporters were advised by the Office of Rail Regulation that soaring costs were an oversight, but that it was not possible to determine by how much the project had overspent. Our local newspaper, the Rugby and Lutterworth Observer, spoke to a member of the Rugby rail users group who talked about setbacks in the construction process leading to train services being stopped simply because Network Rail was unable to complete its work on time. The hon. Member for Hayes and Harlington (John McDonnell) drew attention to that issue.

We have got a new station, but the second matter regarding the changes at Rugby is the noise nuisance from the new track that has arisen since the works upgrade on the west coast main line. I have met Network Rail staff and approximately 25 residents to try to resolve that matter. In most cases, we are talking about residents who have lived in the area for many years. They had got used to living with the railway before the upgrade and were familiar and comfortable with the noise.

Many of the works that took place in Rugby were intended to enable trains to pass faster through Rugby station. Of course, the faster that trains travel—the higher the speed that they run at—the more noise is generated. In the district of Hillmorton, there are two separate noises: first, the absolute noise that the trains make; and secondly, a distinctive one-off thud is heard each time a train passes. I will come to that in a moment.

On major noise levels, my constituent Peter Bayliss invited me into his garden to listen to the noise. He showed me hand-held sound meter readings of between 89 and 90 dB for trains passing through at great speed. That was not previously a problem because, under the old alignment, trains slowed down to pass through the station. There appears to be no resolution to the issues faced by Mr Bayliss and his neighbours.

[Kelvin Hopkins]

The M1 goes through my constituency and I have persuaded the Government to build noise barriers, which have made a considerable difference. Would noise barriers help in the hon. Gentleman’s constituency?

[Mark Pawsey]

I thank the hon. Gentleman for his advice. We are continuing to talk about the problem, but we are effectively being stonewalled by Network Rail.

The thud has been the subject of correspondence between me and Mr Higgins, the chief executive, who has been mentioned. My most recent letter from Mr Higgins in that regard was dated 27 January. I was invited into a resident’s upstairs room, so that I could understand the impact of that noise disturbance. I will not detain hon. Members by telling them which room the lady constituent invited me into, but I was able to hear a very distinctive thud each time a train passed. The lady told me that the noise wakes her regularly in the morning. I use the line regularly, and as a passenger, I can identify the sound. The noise comes from something that I understand is called a switch and cross, which is a device that allows trains to maintain their speed. In his letter, Mr Higgins tells me that there is absolutely no fault with the equipment. That is something my constituents will have to live with.

In both instances, my constituents had come to live with the railway over many years and were comfortable with it. There has now been significant change. I do not think that Network Rail has taken that on board. There is little prospect of remediation for my constituents.

[Kelvin Hopkins]

I am sorry about that. Another suggestion is a floating slab track, whereby the track is insulated from the source of the noise and the vibration is taken out of the ground. That is another very good method of noise reduction.

[Mark Pawsey]

I thank the hon. Gentleman for his advice and guidance, but I would have hoped that Network Rail would refer those things to me when I presented the problems to it. In each case, neither remedy has been proposed. Network Rail should be more responsive to a broader group of people, not only those who use the railway and its operators, but those who live by it. As a result of the improvements to the west coast main line, those people have had their quality of life significantly impaired.

My hon. Friend the Member for Northampton South referred to his enthusiasm for HS2. Those who live close to the line or who are disrupted by the building of high-speed rail will be massively compensated for the disturbance and there will be all sorts of remedial measures. Unfortunately, I am talking about an upgrade to an existing line and my constituents will not receive those benefits.

The third issue that I should like to raise is access to the west coast main line during construction of the Rugby western relief road by Warwickshire county council. That long-awaited road, which was designed to relieve traffic pressure in our town centre, eventually opened to traffic on 10 September 2010. The works required the demolition of a road bridge at Parkfield road and the construction of a new bridge on a different alignment. For a variety of reasons, the history of that road’s development shows that it was not a successful project. The costs rose from the original estimate of £36.5 million to a final out-turn of around £60 million, with a substantial delay in delivery.

A report prepared by the county council draws attention to the reasons for both the increased cost and the delay. A substantial reason given was that problems arose in gaining access to Network Rail land to get necessary works done. There was some difficulty in getting—again, this is a technical term—forms A and B approved by Network Rail. That led to uncertainty in predicting when certain works could start, which, in isolation, added a cost of £2.3 million to the project. In addition, the reprogramming of some work in the diversion of a 25 kV power supply added £635,000 to the project.

The entire issue was the subject of a letter from the leader of Warwickshire county council to the then Secretary of State for Transport dated 5 September 2011. That letter refers to the need for a works agreement with Network Rail before any work can be carried out and to the delays in getting that agreement. I understand that a template is being negotiated by the County Surveyors Society. In this instance, gaps have been left that have led in turn to issues of contention.

The problem is that Warwickshire county council felt obliged to accept the terms imposed on it by Network Rail, which was the dominant partner in the arrangement. The county council certainly believes that Network Rail was less than constructive in enabling the bringing forward of a project that would give broader economic and community benefits. The county council has called for a review to establish more equitable terms, with regard to the wider public interest. Will the Minister comment on that? I raise the point today to support such a review.

Rail connections are very important in my constituency and, as we have heard, in the whole country. We clearly need efficient management of our track. I hope that the issues raised today will lead to improvements in how we operate and maintain this essential public service.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

It is a great pleasure to participate in this debate under your chairmanship, Mr Rosindell. I was delighted to secure the debate, led by my hon. Friend the Member for St Albans (Mrs Main). On behalf of us all, I would like to ask the Minister to pass on our best wishes to my right hon. Friend the Minister of State, Department for Transport, who has responsibility for rail, who has sadly had an accident. I understand that she is back on her feet. I hope that she makes a swift recovery. I know she is very resilient, but I hope she gets the rest she needs to make a full recovery.

Network Rail is 10-years-old this year. We all know how, why and when it came into existence. It is timely and appropriate to have this debate, especially as just over a month ago the Office of Rail Regulation served a notice of breach of licence to Network Rail on two fronts: on long-distance rail and on freight rail services. I have a particular interest in freight rail, which I will come to later in my speech.

One point that has been well expressed—I will try not to repeat too many points that have already been made—is that there has been some progress with Sir David Higgins. However, that does not mean that his job already requires significant six-figure bonuses. I am sure I am not the only person whose eyebrows were raised on understanding that that would be the case. I encourage the remuneration committee of Network Rail to consider carefully—having received those two breaches and considering the ongoing challenges that our constituents face—whether that bonus would be appropriate. I have no problem at all with rewarding success, but I cannot say at the moment that there has been great success on our rail network.

Since the debate was announced, I have had a very quick response from Network Rail. I commend my hon. Friend the Member for St Albans, because I understand that she would not meet with Network Rail until the debate had taken place. I did meet people from Network Rail. It was fantastic that my original query from last summer, which I followed up in October and again in January, was finally answered—good news. It also gave me the opportunity to meet Dave Ward, who has been put in charge of the East Anglia region. He talked about some of the changes that have already happened, and what he plans to do. I will give praise where praise is due: I like some of the changes that have been proposed. However, the proof will be in the pudding.

I want to mention briefly factors beyond control, which have been talked about. Perhaps this is degenerating the debate, but Network Rail has often been called “Not work rail” or “Network fail”. The wrong kind of leaves and the wrong kind of snow—these factors are difficult and I accept that. Extraordinary incidents will happen; for example, burst water mains. Cable theft has been a growing problem. The Government have responded. That response perhaps took longer than everybody wanted, but they have done the right thing in tabling an amendment on tackling metal theft, which will include aspects of cable theft. Network Rail could have done more itself to assess the security of its own lines, whether through technology, or through the good old-fashioned use of people to check what is going on. Indeed, Mr Ward suggested to me that he is spending £2 million on security patrols to try to ensure that such theft does not happen, or at least that it is reduced, and I welcome that.

I also want to mention two Members who cannot be here today. My hon. Friend the Member for Ipswich (Ben Gummer), who also helped to secure the debate, is opening the wing of a hospital, or something like that, in Ipswich. I pay tribute to his relentless work in trying to improve and secure investment for the greater Anglia area. My hon. Friend the Member for Witham (Priti Patel) has already spoken about the challenges for that line, so I will not repeat them. My hon. Friend the Member for Ipswich has also been working with my hon. Friend the Member for Norwich North (Miss Smith) on the Norwich in 90 and the Suffolk in 60 campaigns, bringing together MPs from across all three counties to ensure that we get a better service.

The other hon. Member who cannot be here is my hon. Friend the Member for Lincoln (Karl MᶜCartney). He also has to meet constituents today, and he wanted me to plug the fact that he is fed up with Network Rail. Anyone who has ever been to Lincoln will know that the railway line dissects it. He believes that the latest proposals for freight will mean that the level crossing will be closed for 40 minutes in every hour in daylight hours. He does not think that that is acceptable, and that is a fair point.

On issues of cost and time, we have heard some interesting ideas about what the right thing to do is. Is the right thing to go back to integration, or is it to introduce more competition? My first interaction with Network Rail came about after we lost the hourly service, which had been agreed before I became the Member of Parliament. Passengers had to change trains—there was no through train all the way to Lowestoft and they had to change at Ipswich. That meant that passengers who were not so mobile, or those with heavy luggage, had to be escorted across the tracks. On a very tight connection time of perhaps less than six minutes, that did not always feel very safe or ideal. In fact, passengers ended up going outside the canopy and out into the open elements. Wet or icy weather added to the problem.

Network Rail was supposed to build a footbridge and lifts. It did so, but they were several months late and cost £2.7 million. I understand that £1 million a lift is the going rate, which leads me on to a general point. Everything from Network Rail seems to be costed in units of £1 million: do we want a level crossing? “Yeah, that will be £1 million.” A new academy school building is being built and more children will use a particular route on the way to school. Network Rail has lodged an objection in respect of Runnacles Way, because children walk across there. A bridge is required, which might cost £1 million, or it might cost £2 million. Meanwhile, someone who has been doing some contracting work for the Environment Agency—which used to have the same problem in my view; everything was very expensive—reckons that he can build the bridge for approximately £150,000.

We should not accept that everything costs £1 million or more. That is why I was encouraged by the changes—I think it is called the devolution principle—that allow directors to take control of their regions. The Network Rail group that currently does a lot of small projects will be opened up. Pilots are being conducted to find out whether other firms can bid for tender. Indeed, Abellio, the new franchisee that comes online within the week, has said that it would strongly consider doing that; it does maintenance projects in the Netherlands. That presents an opportunity, but without the complexity that adds cost through procurement, as the hon. Member for Luton North (Kelvin Hopkins) said. However, we need to do something about value for money. We should not accept that the cost of everything is in units of £1 million. Network Rail pulled its finger out with the floods in Cumbria and rebuilt a station in three days, which was fantastic. I would love to see that happen everywhere.

[Kelvin Hopkins]

The hon. Lady is making a strong point about cost. British Rail used to have cash-limited projects that worked within cash limits. The engineers and the directly employed people said, “How do we do this as cheaply as possible? We have to work within the cash limits and we want to do the best job possible.” That actually worked, and is one of the reasons why cost was low in BR’s day.

[Dr Coffey]

The hon. Gentleman has more experience than me on those matters. Some interesting ideas are coming out today—I am sure that the Minister will take note of them—about building not just to spec, but being part of the design solution, and about other activities being constrained within a budget.

I should like to thank Network Rail, Suffolk county council and the Government for putting aside the money to ensure that we get the Beccles loop, which will reintroduce an hourly service all the way through to Lowestoft, as opposed to our only getting trains every two hours beyond a certain point. That improvement should be in by the end of this year.

Level crossings are a big challenge in my constituency. I respect the ambition of the hon. Member for Hayes and Harlington (John McDonnell) to see no level crossings at all, but I do not believe it is feasible. I live in a rural area with nine stations and 50 crossings, but many of those are bridges built a long time ago, back in Victorian times. Of the 27 level crossings in my constituency, only 11 have automated barriers. Eight have to be opened by hand. People drive up, get out of their car and walk to the gates, use the phone, open both gates, drive over, and then come back and close the gates. Those are the examples we could find; we have been doing a bit of research. I have used such a crossing and, as hon. Members can imagine, I have avoided using that route again.

In eight places there are just lights, with no barriers at all. Two of those are on A roads, one with 15,000 traffic movements per day. There have not been that many accidents, but I am not sure whether that is due to the design or people’s patience. It is such a crossing that I have been chasing Network Rail about—the one that will cost £1 million for installing two barriers—and I am delighted to say that I was told that it would be done by 2013. I am delighted that Network Rail has committed to doing that, but its challenge is to try to do that more cheaply. I want the response paper to contain something about how we are going to tackle some of those matters. The example that I have mentioned is not the only level crossing that is needed.

In a rural area, I would rather have routes than roads blocked off. If there were an insistence on there being no level crossings at all—just an underpass or bridge—quite a lot of mobility within rural areas would be compromised. It is about taking a risk-based approach and seeing whether we can do something about some of the crossings where people have to get in and out of their cars, and so on.

I welcome the change in who can bid for work, which will be piloted. I understand that Anglia will be part of that pilot. However, it is critical that there is transparency. I want Network Rail to report on how many projects are internal and external. Starting to show value for money and the percentage, or value, of work being done externally would be a useful barometer.

--- Later in debate ---

[John Woodcock]

That is an interesting point. We should examine repeatedly how such incentive mechanisms work.

In the case of cable theft, increased action and a tougher regulatory system are needed to enable Network Rail to perform better. Of concern is that it took so many instances of main lines and major stations coming to a halt before the Government were spurred to what we hope is greater action. Even though Ministers now seem prepared to legislate for a ban on cash sales of scrap metal, at the moment their actions fall short of what is required to end the scourge of thefts. Cashless transactions alone may prove too easy to circumvent. We need a licensing system for scrap metal dealers, strengthened police powers to enter premises that they suspect of selling stolen metal and to close such premises down if necessary, and a requirement to show verifiable identification, recorded at the point of sale, for all transactions.

Ministers still have an opportunity to put more comprehensive measures in the Legal Aid, Sentencing and Punishment of Offenders Bill. They would have cross-party support in doing so. I am talking about measures that would genuinely put an end to the spiral of delay, disruption and extra cost being experienced by passengers and freight customers across the network. I hope that the Minister will outline whether he is prepared, from a transport point of view, to put pressure on his Home Office colleagues to go further on the matter.

There is a need for improved performance from Network Rail in areas over which unquestionably it has control. Those areas include the reliability of signalling systems and better management of planned shutdowns to limit overruns having an impact on the next day’s passenger services. Performance is highly variable across the network. Far more needs to be done to ensure that good practice is learnt from by all Network Rail regions.

There is real scope to improve performance by reforming the artificial barrier between track and train—one legacy of the botched privatisation of the railways. However, there remains real confusion about where the Government are heading on that. Originally, Ministers proposed handing over infrastructure to the private sector, raising questions about whether they had truly learnt the lessons of the Hatfield crash. Will the Minister make it clear whether they have abandoned those plans? In the absence of the much-delayed Command Paper, the confusion drags on, so will the Minister tell us when we can expect to see that Command Paper?

We also have concerns about something that has so far not been brought to the House but on which newspapers have been briefed, which is the Minister’s new idea about creating single management companies out of Network Rail and train operating companies, starting with a potential partnership with South West Trains. The Minister needs to say how a level playing field will be ensured when such franchises come up for renewal. How will other train operators, both passenger and freight, that use that part of the network fit into the alliance? How does the balance between a for-profit train operator and the not-for-profit Network Rail work in that context?

Hon. Members are right to focus on the need to improve efficiency. As part of that, we need to make procuring and building improvements more efficient without compromising safety. I have spoken to train operating companies, and a number of them have expressed concerns that having to use Network Rail to procure improvements to the non-safety-critical parts of the railway system, such as station buildings and car parks, significantly pushes up the costs of and delivery timeframes for those improvements. Will the Minister expand in his winding-up speech on plans either to allow TOCs to procure such works independently, or to ensure that Network Rail improves its processes?

A number of hon. Members raised, quite rightly, the issue of investment in various parts of the rail network. However, the way in which we currently manage investment in the railway system and, indeed, across the transport network needs to change. We need longer-term thinking that goes beyond artificial five-year horizons. We have a reasonable idea of where the pinchpoints in the system will be in decades to come, the capacity challenges and the emerging markets for new or faster services. We have had, for example, welcome albeit piecemeal announcements of funding for electrification. So far, that applies mainly to schemes developed by the previous Government. However, the five-year horizon of planning means that the Government are hindered from creating greater certainty about a rolling programme of electrification, which, at its best, could guard against the resources and skills employed by schemes such as the Great Western and north-west wiring schemes being lost at the end of those programmes rather than being moved to the next area, such as the midland main line or the Great Western route through to Swansea.

Labour is not calling for extra spending on rail in this comprehensive spending review period, but we do want the five-yearly assessment of what is affordable to be part of a longer plan for what is desirable and likely, so that industry can plan and British manufacturing can have the best chance of winning contracts.

[Kelvin Hopkins]

My hon. Friend is rightly emphasising costs, but a lot of the costs have to do with the method of contracting and sub-contracting that has been in use since privatisation. The contrast with British Rail is extreme, but there is also the contrast with costs abroad—other railway systems on the continent of Europe. Is that not something fundamental that we have to look at to bring those costs down, not just marginal changes to improve efficiency a bit, because we are talking about a multiple of costs?

[John Woodcock]

I thank my hon. Friend for his intervention. He is right to say that we need to look across the board at all options for improving efficiency. Avoiding inefficient procurement decisions, without returning to the days of the railway system that existed before the botched changes were made, which was not in itself operating efficiently, is the challenge and would be the challenge for any Government seeking to produce real, lasting and effective reform.

The deficit of accountability and transparency has rightly dominated speeches today. They have been powerful and well directed, but before I say more about where we share concerns in that respect, it is important to stress how far we have come since the days of Hatfield. Network Rail’s unusual structure was forged in response to the failure of its predecessor, Railtrack. The Labour Government were right to take action to bring the management of our rail infrastructure back under control, but the simple fact that we are in a relatively better place today does not mean that we can or should ignore the problems and shortcomings that beset the organisation a decade on.

The unusual nature of Network Rail has created a deficit of accountability. It does not have shareholders and does not respond directly to elected politicians, as has been demonstrated today. Most importantly, it is not properly responsive to the passengers who use the railway system. That can leave it unable properly to serve businesses, passengers and communities alike, and allow inefficient practices to continue. It has given rise to the alarming allegations that hon. Members have aired today and on which I hope the Minister will comment in his winding-up speech. [Interruption.] He still has 20 minutes.