Rail Investment

Kelvin Hopkins Excerpts

Thursday 17th February 2011 Westminster Hall

[Mrs Ellman]

I thank my right hon. Friend for her comments and I agree with her sentiments. The delay is problematic in its own right, and it certainly has consequences for what is termed the cascading of rolling stock to the north, among other places. The major redevelopment of Birmingham New Street and Reading stations is proceeding.

[Kelvin Hopkins (Luton North) (Lab)]

I reinforce the strong point made by my right hon. Friend the Member for Derby South (Margaret Beckett). We must do everything that we can to maximise the possibility of keeping manufacturing in Britain. Bombardier, a British-based firm, should be considered for that if we are serious about rebuilding our manufacturing base.

[Mrs Ellman]

My hon. Friend makes an important point. He reinforces the important link between rail investment and jobs.

Electrification that was planned long before the comprehensive spending review is going ahead, but only in part. I am pleased that the Government have confirmed the electrification of the Manchester-Liverpool line and the line from Preston to Blackpool. However, there are still problems with the electrification of the Great Western main line.

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[Paul Maynard (Blackpool North and Cleveleys) (Con)]

It is a pleasure to serve under your chairmanship, Mr Owen, as it is to follow the Chair of the Transport Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman), whom I hold in great esteem.

It is also a great pleasure to discuss the Transport Committee’s report on rail priorities. It is not one that I have any personal responsibility for, as I had not been elected to Parliament when it was drawn up. None the less, priorities for rail investment is a worthy topic for debate, not least because of the amount of public money that our railways consume. We have a democratic duty to ensure that that investment is properly apportioned.

For me, the sacred text in this area remains the Eddington report, which the previous Government commissioned and which included several pertinent points. In particular, when prioritising investment Sir Rod Eddington stressed that we needed to focus on three main areas, namely congested urban areas and travel-to-work areas, key inter-urban corridors and key international gateways and hubs. All three were coming under pressure from increasing congestion and the associated unreliability.

As the hon. Member for Liverpool, Riverside pointed out, a lot has changed since her Committee’s report was published. We have a new Government—we even have a new MP for Blackpool North and Cleveleys. We have also had welcome confirmation from the Government of the importance of infrastructure investment. Amid all the talk of spending reductions, I was pleased to learn that many of the feared cuts that we were all told were coming down the line did not materialise and that important projects such as electrification are continuing, which is welcome. It is also true that the issue of high-speed rail has assumed a much greater importance in our political discourse, and I will discuss that issue in more detail later.

One aspect of policy making has been diminished since the election, which is regrettable—maybe this is a misinterpretation on my part; I do not know. As a Member of Parliament for the north of England, I recognise that regional development agencies had their faults and their problems. They were by no means perfect organisations, and they needed immediate reform. I agree with the hon. Member for Liverpool, Riverside that one area where they made a contribution was the quality of the transport planning that they provided through the Northern Way project. I have had the pleasure of meeting representatives of that project time and time again. The quality of the work that they have done was one reason why the Government’s infrastructure announcements for the north of England went down so well, and I have genuine concerns about the quality of policy making if the Northern Way does not find a niche within the new Government structures.

The north is different, and this is not just special pleading or the usual carping about London getting all the transport money. We know that there is a substantial productivity gap between the north and the south of England. I recognise that London is our national capital—a global capital, if anything—and that it needs substantial public investment, but we cannot overlook the fact that the north has, over many years, been getting a raw deal rather than its fair share.

The hon. Member for Newport West (Paul Flynn) suggested earlier today that I read his book on how to be a Back Bencher. I have learned one essential truth so far, which is that it is only when an MP is bored with talking about an issue that he knows he has got his point across. With some trepidation, therefore, I shall discuss the northern hub.

When the report was first published, the northern hub was still the Manchester hub, and I take some pleasure in having played a role in getting it renamed, if only to reflect the fact that it benefits the whole of the north of England and the north of Wales from Anglesey to Newcastle. The northern hub is not only a building in Manchester, but a series of discrete projects that unlock the potential of the rich, dense rail network that exists across the north of England, and it is vital that it goes ahead. I welcome all the positive indications that we have had so far from the Minister. Every time I have bored her and the Secretary of State by asking about it, I have got a nod and a wink that it will be in control period 5, and I ask once again for that to be restated.

We have to realise that whenever we discuss inter-city travel in the UK, for those of us who are London-centric or come down here all the time, north-south journeys matter, but for business men in my constituency and across the north of England, east-west journeys are just as important. People in Manchester occasionally need to go across the Pennines to Leeds and even further to Newcastle. Sometimes, my constituents want to go to the north Wales seaside, because they have had enough of Blackpool—surely not. East-west travel matters, and the Council for the Protection of Rural England backs better trans-Pennine rail links, although I am not sure whether it would do so with HS2.

[Kelvin Hopkins]

I strongly agree with the hon. Gentleman’s view about east-west links being equally important. Does he agree that it is vital to keep the Woodhead tunnel for future transport use and not let it be poisoned by having electricity cables put through it? The previous Government arranged for that to happen, and I hope that the present Government will continue to preserve the tunnel for future transport use.

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[Kelvin Hopkins (Luton North) (Lab)]

It is a pleasure to speak under your chairmanship, Mr Owen. It is also a pleasure to follow the good speeches that we have heard so far, especially from my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), who is the Chair of the Transport Committee. I have been a member of the Committee for the past few months, and I have much enjoyed that time.

I am a passionate lover of, and believer in, railways. Even when they were unfashionable, I still believed that they would be the transport of the future. I suspect that they will outlive the internal combustion engine and possibly even air flight and that, however far ahead we look, there will still be railways. I have a real interest in passengers and freight, and I would like to think that I have some informed proposals to make.

I should declare some interests. I am the chair of the ASLEF group of Members of Parliament. I am also a member of the National Union of Rail, Maritime and Transport Workers group, and my constituency fund received RMT donations before the last election. However, the views I express today have nothing to do with anyone else—they are purely my own—and I would like to think that I have given them sufficient thought to make them worth while.

Like Eddington and others, I am somewhat sceptical about HS2. That is not because I would not, in the best of all possible worlds, want a superb high-speed line that went everywhere. However, ours is a relatively small, densely populated country, and given that funds are, inevitably, limited, there is, as Eddington suggested, a considerable opportunity cost involved in spending money on HS2 rather than other things. It would also be expensive.

I think I can also make the case that HS2 is not absolutely essential to provide the transport that we need. We need lots more investment in existing passenger routes. Improvements to existing routes could make an enormous difference to their capacity. There are a number of problems on the east coast main line. There are two tracks at Welwyn, and we need another viaduct so that we can have four. That bottleneck causes serious problems, and that would be the case particularly for high-speed trains, especially during peak hours of commuter traffic. We therefore need another viaduct at Welwyn.

Further north, we need a flyover where the Cambridge trains branch off at Hitchin. We need passing loops at Peterborough and a flyover at Newark. If we had those, we could have 140 mph non-stop working between King’s Cross and Edinburgh if we chose to. Indeed, in 1992, a trial run was undertaken between King’s Cross and Edinburgh, with a two-minute stop at Newcastle. The journey was done in three and a half hours based on a standard operating speed of 140 mph, so these things can be done. It is interesting that the proponents of HS2, looking into the future, came up with a time of three and a half hours for services between King’s Cross and Edinburgh—exactly the same time as was achieved in 1992.

We need new signalling and higher running frequencies. We can have much higher frequency running if we have modern signalling. One problem is that we have 50-year-old signalling systems. Geographical interlocking signal boxes were installed in the 1960s and they are now out of date and need replacing. With modern signalling, we can achieve higher frequencies and faster throughput.

[Guto Bebb]

As a Welsh Member, I would be fully in favour of electrifying the south Wales line. As far as the north Wales coast line is concerned, the hon. Gentleman is completely right that signalling improvements could make a huge difference to the frequency and speed of services, and that would be critical to the area’s economic success.

[Kelvin Hopkins]

Indeed, and that is true not just of north-south routes, but other routes, too.

Unfortunately, we have a lot of ancient equipment on the railways. It was worthy in British Rail’s time, but we have moved on. One problem with privatisation is that companies have no great incentive to improve investment in such things when they are trying to run as profitably as possible with existing equipment. Some people, including Eddington, suggest that capacity on main lines could be doubled with modern signalling and more frequent running. We could have trains every 180 seconds on those routes if we get the modern signalling.

We have heard a lot about extra rolling stock. In the short term, there are more than 100 unused carriages in Ireland. They are essentially Mark IIIs, and they could be immediately imported, re-bogied and used on main lines in Britain. Actually, they are more modern than our Mark IIIs because they have automatic doors, rather than slam doors. They could be bought cheaply now and installed quickly on our routes. That is a short-term fix—obviously, we want more investment and more rolling stock to be built, particularly by Bombardier—but we can make such changes.

On the west coast main line, the maximum operating speed will be 130 mph because there are tighter curves than on the east coast main line. However, 130 mph operation with modern signalling and high-frequency trains would still be sufficient, particularly if we got freight off the lines. That brings me to my next proposal, which is to get freight off the lines. Those who know me well will know that I have been proposing for a long time that we have a dedicated freight route from the channel tunnel to Glasgow, which would link all of Britain’s main conurbations. Why do we need a dedicated freight line? When it comes to existing freight routes, passengers and freight do not mix. They have different operating speeds and so on. Time and again, when there is a bit of a problem with a passenger train, the freight trains will be parked on one side while the passengers are given priority—people get much more upset than freight when they are delayed. Of course, freight operators get upset, but they have to suffer. However, if we have a dedicated freight line with no passengers, we would overcome those problems.

[Mr Leech]

The hon. Gentleman has been a long-time supporter of a dedicated freight route, but is it not possible, with the onset of a High Speed 2 line, that the extra capacity on the existing network would be enough to provide extra routes for freight movement? I totally agree that we need to move more freight from road to rail, but with the onset of an additional, high-speed line there would surely be enough capacity on the existing mainline networks to provide the necessary service.

[Kelvin Hopkins]

The hon. Gentleman raises the point that I want to address now. The problem with putting more freight on such routes is that it would be impossible to fund the provision of sufficient gauge. It would be prohibitively expensive to make all the tunnels, bridges, platforms and so on able to take freight. We must have trains these days that are capable of taking full-scale containers—that is W10—and I suggest a scheme that could take full-scale lorry trailers on trains. Hauliers would put their trailers on the trains and they would be taken straight through from Glasgow to Rome, or Rome to Glasgow. I have spoken to the logistics managers of big companies and asked whether they would like to bring their water, wine or whatever from Bordeaux, which is a favourite town of mine, to Birmingham. They say it would be wonderful—fabulous—to send it all the way on the train. What they do now is train it to the coast of the continent and then put it on lorries. That transit would become unnecessary. They could roll a trailer on in Rome or Bordeaux and roll it off in Birmingham or Glasgow.

The problem with trying to upgrade all the existing routes for freight is that there would have to be a through-operation for continental freight trains. They are larger gauge and cannot get through our platforms, because they are wider, or through our tunnels or under our bridges, because they are taller. Certainly we could never have lorry trailers or double stack containers, as we are suggesting. To get serious volumes of freight through, a dedicated freight route is needed, and that is what our scheme is about. As I have said, I have no pecuniary interest in it. I have been passionate about it ever since I heard about it some years ago, and I have spoken on many platforms. I took a team of people to see Geoff Hoon when he was Secretary of State for Transport; they included representatives of supermarkets, Eurotunnel, the rail constructors and AXA—the insurance giant that funds terminals. There were 15 of us. I think that we answered every question put to us adequately. We could not persuade the Secretary of State then, but I hope that the present Government may listen sympathetically, at least.

What I propose could be done very cheaply. We have a precise route, which would involve only 14 miles of new route, nine of which would be in tunnels. The route would, as I have mentioned, use the Woodhead tunnel. The rest would be on existing under-utilised routes and old track bed. Initially we put a cost of £4 billion on it. One of the rail constructors said it could do it for £3 billion. We are now being generous and suggesting £6 billion; but that is still one third of what we propose to spend on Crossrail—which I also support. Nevertheless, our whole scheme, with its 400-mile route, would cost a third of what we are to spend on Crossrail, and would be commercially viable, because of the amount of traffic on it.

[Mr Tom Harris]

Just for the record, and so that we are talking about exactly the same figures, is my hon. Friend aware, when he talks about the scheme costing a third of what Crossrail does, that the Government’s funding of Crossrail is less than £6 billion, and is a third of the total?

[Kelvin Hopkins]

Indeed. I suggest, although I am a public investment person, that the scheme I am describing would attract outside investment. Already, at the meeting with Geoff Hoon, AXA said it would fund the terminals. It already does that. The prospect would be commercially viable. We suggest it would take 5 million lorry loads off the roads.

Finally, the scheme would make a massive difference to carbon emissions. Heavy freight taken by road produces 12 times as much CO₂ per tonne-km or tonne-mile as freight taken by rail. Even lighter freight produces six to eight times the amount. That is a massive carbon saving from rail. Every tonne we put on to rail makes a substantial saving in CO₂ emissions on those 5 million lorry loads a year on a 400-mile route. That would also transform the links between the northern economies and the continent of Europe and breathe new life into the northern, Welsh and Scottish economies. It would not just be about the south-east. At the moment lorries must get through the treacle of the south-east. With a through, dedicated rail freight route we would overcome that problem. It would be of enormous benefit to colleagues who represent northern constituencies. Instead of being peripheral to the core of the European economy they would become part of the central European economy, which would benefit them and the country enormously.

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[Mr Tom Harris (Glasgow South) (Lab)]

I have been involved with the railway industry to a greater or lesser degree for the best part of 20 years now, but I have never suffered the ignominy of going native. When I was the Minister with responsibility for railways—the Minister is welcome to use this joke if she wishes, although most of her audiences will have heard it a number of times from me—I used to joke that although I had succumbed to the lure of the railways and started buying railway magazines regularly, I was always careful to buy a copy of Playboy and put the railway magazine inside it to avoid embarrassment.

There is a healthy turnout of right hon. and hon. Members here. It says something about the lure of the railways that 80% of our constituents do not use them—I expect that it is more than 80% in most constituencies—but the subject attracts and engages Members of Parliament. I suspect that most of us receive more letters a week from our constituents about railways than about motorways or local roads, despite the fact that roads are a vastly more popular mode of transport.

[Kelvin Hopkins]

Are the railways regarded as a national treasure like our forests?

[Mr Harris]

I will refrain from trespassing on the Government’s sadness at this juncture.

Although I do not stand every weekend with a flask of tea, a pair of binoculars and a camera at the end of the platforms at Glasgow Central, I am, if not an enthusiast, a strong supporter of the railway industry. I congratulate the Government, because most of us feared the worst when this shower came in.

In the previous Parliament, the Labour Government did a great deal to invest in the railways to try to improve the services that our constituents rely on. The figures show that we have the largest number of passengers travelling on the railways, apart from during the wartime period, since they began. We also have the best safety record and there are more services running per weekday than at any time in the history of the railways. There was concern upon the arrival of the new Government, whose Ministers seem unable to speak without using expressions such as, “Cleaning up the mess left by the previous Government,” and talking about deficits and so on. We assumed that that would be a simple mechanism and excuse for starving the railways of investment. However, I must say, in all seriousness, that that has not happened, and I am delighted about that.

I am also delighted about the Government’s commitment to High Speed 2, and I regret that my own Government only saw the light on high-speed rail in the latter part of their period in office. That was a mistake, and I accept my own personal responsibility for not pushing it as hard as I could have done when I had the opportunity to do so. I was the Minister who saw through the Crossrail Act 2008, so I am delighted that Crossrail, as well as Thameslink, will be fully funded. There is a lot to celebrate in relation to the railways—there always has been, even at the most difficult times in the network’s history. We have now had two successive Governments who seem to have a genuine commitment to growing the network.

On procurement, my right hon. Friend the Member for Derby South (Margaret Beckett), who is no longer present, mentioned that the manufacturing base of the railway industry in this country is, sadly, significantly smaller than it has ever been. She mentioned Bombardier in particular. I totally understand the pressure that Ministers are under in relation to procurement and an open procurement process throughout the European Union. The Minister will be aware, and she will have been told by her officials, that certain European countries somehow manage to get around the procurement rules and, miraculously, give very large and helpful contracts to their domestic manufacturers rather than to foreign competitors, which is something that Britain has, sadly, never managed to do.

I do not expect the Minister to deviate from her line—I understand the legal ramifications if she were to say that she agrees with me in any respect at all—and I do not even expect her to mention this when she makes her summing-up speech, but she will find very little, or no, opposition from my party if she could find a way of making it easier, within the rules, for British manufacturing companies to be given the same kind of contracts that foreign companies get from their own Governments. If she has that fight with the Treasury, she will have my full backing.

Luton is very well represented on the Transport Committee, and my hon. Friend the Member for Luton North (Kelvin Hopkins) made a point about signalling, which is absolutely crucial. I will not labour the point, because he made it very well, but, given that there is no commitment to building new lines outside HS2, if we are to get more trains more frequently on the existing network, the only way of increasing capacity is to invest in new signalling. When we were in Brussels last week, we heard about the ongoing Galileo project. It is a new satellite system that might, in a couple of hundred years, if it is given an infinite amount of money by every country in the European Union, be able to go into operation. It is the kind of global positioning system that would help provide railways with a satellite navigation system in future, provided that it is accurate enough, which it is not yet. Perhaps Galileo, if it is given an infinite amount of money, might be able to provide that solution.

Value for money is crucial to the railways. My hon. Friend and I are members of the same party, but I hope that he will not object if I say that we come from different parts of it. We have a different view of who owns the railways and whether public or private ownership is the right way. I shall let you conclude for yourself, Mr Owen, which side I fall on and which side my hon. Friend supports. I do not think it matters much whether Network Rail is publicly or privately owned. The fact is that the McNulty review on value for money is absolutely crucial, if we are going to identify ways to cut the costs of the railways.

[Kelvin Hopkins]

McNulty has concluded that our railways cost up to 40% more than continental railways to run. The only major difference between them and us is that they are publicly owned and integrated, while we are privately owned and fragmented. I have made that point to the Secretary of State, who did not strongly disagree.

[Mr Harris]

I am grateful, as always, for my hon. Friend’s intervention, but I disagree with him. Network Rail has had imposed on it an obligation to improve its efficiency and make significant improvements year on year. I do not believe that it is a failing organisation, or that it matters whether it is privately or publicly owned. I am glad, however, that the Secretary of State has thrown out any pretence that Network Rail is a private company, inasmuch as he does not seem to care whether the National Audit Office will, with the stroke of a pen, commit Network Rail’s debt to the public books, which Ministers in the previous Government went to great lengths to avoid. The Secretary of State has taken a more relaxed, and probably more sensible, approach. By the end of this year, Network Rail may well be categorised as a nationalised company. However, if it is not efficient and is not doing the job, does it really matter who owns it? We must get efficiencies back into the railway industry, and we must make sure that the public purse, which is asked to pay a significant amount of the cost of the railway industry, is getting value for money. That is the way to restore people’s trust in the railway industry.

In the run-up to the general election, the Labour Government had a much greater willingness to look at longer franchises. The franchising process itself costs huge amounts of money, not only for the competing companies but for the Department for Transport. The figure of £5 million is often quoted as the cost to the Department, and the longer the franchise, the less often that cost has to be borne. Recently, I had an interesting conversation with an ex-civil servant, who shall not be named. He told me that the reason why seven years was seen as the best period for railway franchises to begin with—from 1995, when the railways were privatised—was that they would start in 1995 and end after the first term of an unpopular Labour Government, at which point, the Conservatives would be able to come back in and look again at the franchise system. But things did not quite work out that way. Seven years is clearly too short a period, and some of the franchises that have been let recently are, for practical reasons, even shorter than that. I hope that we move to a longer franchise period of, perhaps, a standard 10 years, with a two or three-year extension, depending on performance.

I will mention open-access and freight operators in the same breath, because those two users of the network are entirely free of public subsidy of any kind. Open-access operators are, in my view, a good thing. That may not be the view of certain officials in the Department, but we should welcome a private company if it can come in and run a profitable passenger service between two points without seeking any public subsidy, without taking any of the revenue from existing franchises, and without causing any delays to other franchises or to freight operators. I am disappointed that the Wrexham, Shropshire and Marylebone railway finally shut up shop at the end of January, which was a great blow to those people who used it. I say to my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), who chairs the Transport Committee, that open-access operators are of great interest to the wider railway and to the travelling public. I hope that, at some point soon, we will have the opportunity to look at the whole open-access framework in order to think about what makes open access valuable, what makes it work and, crucially, what makes it fail.

My hon. Friend the Member for Liverpool, Riverside has mentioned fares, and I hope that the Minister will address that issue when she speaks. When Lord Adonis was Secretary of State for Transport, he made an instruction to the train operating companies that resulted in a radical change from previous practice. As has already been said, the retail prices index plus 1% fares annual increase was interpreted in a very generous and broad way by the train operating companies. The highest increase had to be RPI plus 1%, but the train operating companies would take a basket of fares. Within that basket, there could be reductions and increases by up to RPI plus 6%. However, Lord Adonis said that all regulated fares must be increased by a maximum of RPI plus 1%. That took away a lot of manoeuvrability and flexibility from train operating companies, who obviously had a vested interest in increasing season tickets and other fares by more than RPI plus 1%. There may well be perfectly valid reasons for moving away from that approach. If possible, will the Minister say something about where we are now and what effect that policy has had during the past 18 months or so?

Innovation does not sound as if it is directly related to priorities for investment, but the issue comes back to value for money. The criticism made by my hon. Friend the Member for Luton North of the privatisation of the railways is entirely valid in the following respect. It is the only privatised industry in which innovation virtually disappeared—from the point of privatisation until now. In almost every other industry that was intrinsically profitable and was therefore privatised, innovation flourished. However, that has not happened in the railway industry. I tried to do something about that when I was the Minister, but there is very little that the Minister and the DFT can do, because it is up to the industry. If there is a level of innovation that can transform the processes within the industry and the passenger experience, that is how we partly move towards a situation in which we develop better value for money for the passenger.

[Kelvin Hopkins]

One of the problems is that the railways are long-term and expensive and private companies have short-term balance sheets. Inevitably, the tendency is to sweat the assets to maximise profit in the short term and leave long-term considerations to others.

[Mr Harris]

That is undoubtedly the case, but I do not accept that that is necessarily an immovable barrier to innovation. Network Rail is the greatest purchaser and procurer in the whole of the industry and it works in the long term. Frankly, many of the manufacturing companies that rely on contracts from Network Rail want to deal in long-term investment and want a long-term reassurance that the work will be there 10 or 20 years down the line. If the will is there, innovation can happen and, as I have said, that is irrespective of whether the industry is privately or publicly owned.

I shall say a few words about High Speed 2. I have long been a supporter of the project, although not on environmental grounds. As Rod Eddington said in his 2006 report, there may well be a case for high speed on capacity grounds, but there is probably not an environmental case. In addition, there is probably not a great case in terms of connectivity, because Britain is a relatively small country and is already pretty well connected. However, there is a case for high speed on capacity grounds. When we get letters and complaints from our constituents, apart from fares, capacity is the burning issue at the moment. It has been for a number of years and will continue to be until we do something serious about capacity. HS2 will relieve capacity on the west coast main line, and I hope that it will do something for freight as well.

I worry about the debate that is developing in this country on HS2 and that supporters of it are dismissing out of hand the concerns of people who live along the line and colleagues who represent communities based along the line. I hope that we can conduct that debate in a more consensual and less provocative manner.

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[Gavin Shuker]

Thank you, Mr Owen.

As I was saying before we were so rudely interrupted by the business in the main Chamber, the Select Committee report concludes:

“Investment in improving transport infrastructure should be based on the long-term needs of the economy and society, not directed by the need for immediate public expenditure savings.”

In fact, the report spoke highly of the benefits of investing in our railways, recognising that enhancements often

“provide good value-for-money”—

what we put in regularly, we get back in increased usage. Targeted investment can have “important economic benefits” for community connection and regeneration, which means that not only the service provider, but our local businesses and communities cash in. The Government desperately need growth, and they must not ignore the potential for economic growth in the improvement of our railways.

[Kelvin Hopkins]

Like my hon. Friend, I travel from Luton station every day. Does he agree that railway stations are about not only transport facilities but the appearance and the impression given when people arrive in a town? The better a station looks, the more likely it is to encourage people to visit and businesses to stay, because it looks nice. That is a simple thing, but I am certain we need it, and I hope my hon. Friend agrees.

[Gavin Shuker]

I absolutely agree with my hon. Friend. Luton station welcomes us both home at the end of a long evening in Parliament, and I only wish that all passengers had the enjoyment of sitting opposite my hon. Friend the Member for Luton North (Kelvin Hopkins) on their return journeys, so that their conversations might be as enlightened as ours often are. He makes a strong point that stations are the gateway to broader communities. Investment in infrastructure, transport infrastructure and stations in particular bring a halo effect.

As we all know, rail is particularly important as a mode of transport for business. In my region, the east of England, eight out of 10 rail journeys are made for business purposes, all by people commuting to work. If we are to support people fully in their ability to get to work, investment in our railways is vital. Eddington argued that

“the rising cost of congestion will waste an extra £22 billion worth of time in England alone by 2025.”

Our transport links, therefore, are a

“key enabler of productivity and competitiveness”—

according to the Select Committee report—and, in short, we have no choice but to invest if we want growth and jobs. Let us not dismiss our future prosperity with a narrow argument made solely in the name of the deficit.

It is also worth noting that investment in construction is one of the silver bullets in Government action to get significant economic growth. The improvement of stations is identified in the report as one of the key improvement projects worthy of consideration in the next control period. Station upgrades are highlighted as beneficial in wider area regeneration. Stations are not simply sheds in which we shelter from the rain, as my hon. Friend the Member for Luton North has said. They are key functional zones and play an important role in the total journey experience and in enabling economic productivity in a wider region.

We all know that first impressions count. I am incredibly proud of the town of Luton—I am, indeed, from what I hope shortly to call the city of Luton. However, I confess that it is not with pride that I welcome visitors at Luton railway station. The station has been assessed as one of the worst stations in the whole of the United Kingdom, measured by equivalent passenger numbers. In the words of my hon. Friend the Member for Luton North, in his Adjournment debate last year:

“It is drab, dreary and depressing.”—[Official Report, 23 March 2010; Vol. 508, c. 63WH.]

It does not do our area justice, and the population of Luton has been complaining about it for long enough.

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[Andrea Leadsom]

I am pleased and reassured to hear that; nevertheless, in this time of great financial constraint, there is no doubt that a £17 billion project will lead to other choices not being taken.

The hon. Member for Luton North (Kelvin Hopkins) made an excellent contribution—he is clearly an expert on this matter. He spoke about a dedicated freight line. I do not wish to be a nimby, but if such a line went through my constituency, I can see the obvious merits of a dedicated freight line that I cannot see having looking carefully at HS2.

[Kelvin Hopkins]

The hon. Lady made a good point about high-speed trains having to go in a straight line. That gives them certain rigidities that do not apply to normal passenger routes up to 130 mph, or to freight trains that can manoeuvre and take tighter curves. That cannot be the case with high-speed trains. They have to go in straight lines because of the speeds involved.

[Andrea Leadsom]

I am grateful to the hon. Gentleman for that point. He is right—high-speed rail has to go in a straight line and it is much more expensive to create that, which greatly limits the number of stops. I have heard it said that the line needs to go from London to Birmingham for the purpose of speed and to solve the north-south divide. I agree with those hon. Members who have said that that alone will not solve the north-south divide and that other decisions will need to be taken. We need to consider the whole of Britain. From the point of view of many constituencies along the way between London and Birmingham, if the line were to be made viable with interim stops, so that there were some sharing of the benefit, it would be more attractive.

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[Martin Horwood]

I am a little wary of the time, so I will plough on. I endorse the view that we need a balance in railway investment between not only Manchester but the whole of the north of England and London and the south-east. I echo the comments of my hon. Friend the Member for Chippenham about the need for a rebalancing in favour of the west and Wales. When we enter the next control period, it is important that we bear in mind such balances.

Electrification, which was raised by the Select Committee, is an important issue, especially in the context of the Great Western main line. We need to be wary about presenting the commitment to electrify as far as Newbury and Oxford as any kind of cut. That project will continue until 2018, so to look beyond that is already well into the next Parliament. The Labour party committed itself to 20% cuts in its submissions to the comprehensive spending review across unprotected Departments, so if extra and faster investment in electrification were to happen, it would be interesting to see what cuts would be made to pay for it.

We must be wary of the perception that all the investment is working its way out from London. If I were to suggest that we face a rise in rail fares across the entire network, constituents living in Wales or Bristol would not see a great return on that rise. However, someone who is living in, say, Witney, would be closer to one of the stations that would be electrified—Didcot parkway or Oxford—and they might get a very real and rapid return on their increased rail fares. We have to be wary about the perception that all the benefits are being delivered first to London and the south-east.

The hon. Member for Luton North (Kelvin Hopkins) made some important points about signalling technology. My hon. Friend the Member for Chippenham mentioned the European rail and traffic management system, and I raise an alarm about that. I urge the Minister to examine the experience of Londoners when the ERTMS was introduced on the tube system. She should perhaps take some advice on how well the system works.

[Kelvin Hopkins]

There is a difference between signalling assistance in general and specific signalling assistance about which there may be some doubts.

[Martin Horwood]

That is absolutely correct. The Select Committee report also mentions the importance of investment in rolling stock. It is important for the Government to take their time to get that right. There have been delays under both Governments, so that is common ground. Rolling stock is a significant contributor to the general level of expense in our railways. If it takes time to consider how to deliver more competitive prices for rolling stock, it might be a delay worth considering.

Smart ticketing was raised in the report. It is important that we have better integration of ticketing. The current system is confusing and often unfair. Claire Cook, my fantastic PA in my constituency office, regularly books me a first-class ticket on a Gloucestershire to London train for £21.50. That horrifies many of my constituents who pay several times more for a standard ticket on the same train on the same route. They do not seem reassured when I tell them that because they have, in effect, paid for my ticket too, they are really saving money. That really does not seem to go down well. The risk is that there is an unnecessary perception of high cost, because people do not realise that cheaper fares are available. The ticketing system must be addressed. We should move towards a system that is a bit more like Oyster cards in London. When someone uses an Oyster card, they can be pretty sure that they are getting the cheapest fare available for that route. The application of such a system would be a good thing for the whole country. Obviously, though, that is a technical and organisational challenge.

Finally, everyone regrets increases in fares. Even when we accept that fares have to increase, there is a need to examine the sharp practices by train-operating companies, such as shifting the time boundary between peak and off-peak, so that there are suddenly more peak fares than before, even though, technically, the price has not been raised. That is a stealthy way of raising prices for customers. The use of averages was a point very well made. The Government must be on the ball about fare increases and make sure that train-operating companies are not taking advantage of customers.

In short, we should attack the fundamental causes of the high costs—the lack of capacity, the supply and demand problems and the cost base of the railways. The Office of Rail Regulation has said that Network Rail is up to 40% less efficient than its European counterparts, which means that we have some fundamental problems. With the inflated cost of rolling stock and so on, there is clearly potential for the Government to address the fundamental costs of our railways. If they do that effectively and protect investment, we will have a transport system that any Government could be proud to say is better value for money, better for the environment and better for the travelling public.

--- Later in debate ---

[Mrs Villiers]

I will, in a moment, outline the Government’s commitments on extra rolling stock. Health and safety is a matter for the Office of Rail Regulation, which takes on board all such factors in its decisions on safety in the rail industry. There has been a significant improvement in safety on our railways over recent years, and we need to pay tribute to the fact that they are one of the safest forms of transport.

In response to the hon. Member for Glasgow South, we do not at the moment have any plans to reintroduce the flat cap. Affordability is the concern, but we will keep the matter under review, and see if it becomes more affordable in the future.

The improvements that we have promised are extensive, and over the next four years the Government propose to invest £30 billion in transport, £14 billion of which will support capital maintenance and investment in our railways. Major projects that we are funding include high-speed rail, Crossrail, Thameslink, Birmingham New Street and the tube upgrades. In answer to the question that the hon. Member for Liverpool, Riverside asked about carriages, we expect there to be about 2,100 new carriages on the rail network by 2019, of which about 1,850 will be additional capacity, and I shall go into a little more detail on carriages in a minute.

[Kelvin Hopkins]

Will the right hon. Lady look into the fact that more than 100 mark 3 carriages could be available immediately? We would only need to have new bogies to cope with the gauge difference with Ireland. The Irish need the money, I think.

[Mrs Villiers]

It is open to the train operators to lease additional capacity if they so wish, and they may well be interested in exploring the option that the hon. Gentleman outlines.

Substantial work is under way on the strategic freight network, and I have repeatedly paid tribute to the work done on that by the previous Administration. I emphasise that rail freight plays a really significant part in our strategy for reducing carbon emissions and relieving congestion, and that is why the coalition has prioritised investment in projects such as the Felixstowe-Nuneaton gauge clearance.

The hon. Gentleman would like to see a dedicated freight line. I know his enthusiasm for that project and am always happy to engage with him on it, but the freight industry as a whole prioritises the projects in the strategic freight network, rather than a dedicated line. If the hon. Gentleman can make the case for going ahead with something like that in the future, I and my colleagues will of course be prepared to listen.

On the regional balance, in making project funding decisions it is important to take account of the needs of different areas. Although the business case for rail investment in the south-east can often be stronger because of the sheer volumes of passengers, assessment of the business case is just one element in the decision-making process and we can, and do, have regard to other factors, including the appropriate balance of funding between different parts of the country. It is worth recognising that improvements in London and the south-east can yield benefits for the economy as a whole, but the north of England will benefit directly from a whole range of programmes that are under way, including faster journey times between Liverpool, Manchester and Leeds, additional carriages, electrification, station improvements and important upgrades on the east coast main line, as well as the extension of light rail in Manchester and Newcastle, and in the longer term the north will benefit massively from our high-speed rail plans. The tough decisions made in the spending review mean that we are able to provide more than £1.5 billion for local authority major schemes in the period up to 2014-15, and that is a larger amount than the average annual Department for Transport spend on such schemes over the past 10 years.

High-speed rail has been a big issue in the debate this afternoon, as ever. My hon. Friend the Member for South Northamptonshire (Andrea Leadsom) spoke with her usual passion and articulacy on her concerns about high-speed rail, and I welcome the input of all colleagues on this issue as it is one of the most important parts of the coalition’s programme to improve our railways. Very soon we will start a major consultation on our strategy for a Y-shaped High Speed 2 network, and I can assure the shadow rail Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), that we are committed to taking this railway to the north of England, in two delivery phases. Opponents of HS2 say that it will not have a big impact on the north-south divide, the important response to which is that they should look at the extensive support for the project in the north of England, and also at the rest of Europe, where cities such as Lille have been transformed as a result of the connectivity that can come with a high-speed link to a capital city.

Demand for travel between our cities is expected to increase significantly, and there is an industry consensus that the west coast route will be full to capacity within little more than a decade. My hon. Friend the Member for Blackpool North and Cleveleys indicated that there was some contention about passenger growth figures, but everyone accepts that there will be significant growth on the west coast main line.