Department for Transport

Kelvin Hopkins Excerpts

1st reading: House of Commons
Tuesday 27th February 2018 Commons Chamber

[Diana Johnson]

I thank my hon. Friend for that point—I was just about to come to it—and agree absolutely.

If we are serious, such an ambitious investment programme means plugging what IPPR North has calculated to be a £36 billion gap in transport spending between London and the north, and accepting and building on Transport for the North’s plans for our region. Those plans would, by 2050, not only create 850,000 jobs, but partly pay for themselves by reducing the north’s fiscal deficit by 47% compared with business as usual.

A new approach to running transport services is also required. We need an approach on managing transport that works for fare-paying passengers, not dividend-troughing shareholders. Rail operators that mismanage services and threaten to default on their franchises cannot get away with it. Taxpayers’ money and fare revenues should be spent on transport investment, not on bailing out private companies that recklessly over-bid. Regions outside London need statutory, sub-national transport bodies with the same clout and borrowing powers as Transport for London. To be fair, the problems I have just outlined are not all the fault of the Transport Secretary or the Department for Transport, as many relate to the actions of successive Governments of all colours stretching back over many decades. However, the Secretary of State is responsible for what happens on his watch, and we are entitled to hold Ministers to account for the steps they take—or fail to take—to tackle these problems.

I have four questions for the Minister. First, how does he intend to act on auditors’ criticism of the effectiveness of a range of transport bodies and projects? The National Audit Office has been scathing about the performance of Highways England’s 2015 to 2020 road investment strategy, highlighting the fact that many of the promised road investments are considerably behind schedule. Network Rail’s operations have also been subject to long-standing NAO criticism. The NAO has also turned its sights on the Department’s role in a range of projects and franchises, not least the Thames garden bridge in October 2016. What will the Government do about these criticisms?

Secondly, in the wake of the east coast debacle, the Government need to answer pressing questions about the state of our rail franchising system. The recent problems with the Stagecoach-Virgin Trains east coast franchise risk undermining the whole franchising process. The situation sends a message to future bidders that they can get their sums wrong and over-bid, but still get a bail-out to the tune of perhaps more than £1 billion. The Secretary of State’s subsequent decision to extend Virgin Trains’ west coast franchise only reinforces that concern.

Last month, the NAO rightly announced an independent investigation of what had happened. Subsequently, on 5 February, the Transport Secretary came to the House with stern words about Stagecoach, but no concrete assurances that it would not win a future bid. I must say to the Minister that that stands in stark contrast to the swift, decisive action taken by Lord Adonis after National Express threatened to default on the same franchise in 2009.

This debacle also exposes huge problems with the broken franchising system. As has been shown by the answers to parliamentary questions that I have tabled, there have been fewer bids for rail franchises in recent years than was the case at the start of the decade. Since 2012, 13 franchises have been directly awarded without the promised competition.

Thirdly, if the Transport Secretary is so confident about the benefits of his transport upgrade programme and the scrapping of electrification, why will he not spell out the exact benefits it will bring? Last year, when he scrapped all electrification plans—outside the south-east, of course—in favour of bimodal diesel-electric technology, he assured Members in a written ministerial statement that

“we no longer need to electrify every line to achieve the same significant improvements to journeys”.—[Official Report, 20 July 2017; Vol. 627, c. 71WS.]

So why have Transport Ministers proved unable to answer my very specific written questions about the exact travel speed improvements, ongoing financial costs and emissions that passengers can expect from the new bimodal trains?

[Kelvin Hopkins (Luton North) (Ind)]

The Government said recently that they wanted to see the elimination of diesel traction on our railways in a few years. How can they achieve that if they are going to cancel all the electrification schemes?

[Diana Johnson]

My hon. Friend makes an important point, and I hope that the Minister will respond to it.

While Ministers have admitted that following the scrapping of electrification the ongoing costs will be higher than they would have been with electric trains, they have refused to say by how much or what that will mean for future ticket prices. Although I have been told that the environmental impact of bimodal trains has been “taken into account”, I am not sure that an environmental assessment has been undertaken. It seems that big decisions are made in the apparent absence of basic information.

It is also astonishing that we still do not know the future of trans-Pennine electrification. No official announcement has been made since the Transport Secretary cast doubt on the project during a media appearance in July 2017. I acknowledge that the rolling stock is being upgraded, but the very companies that are supplying it tell me that without improvements to the tracks, they will not be able to get anywhere near their maximum speeds. The developers at Great Western Railway have warned that its bimodal trains will be slower in diesel mode than the ones that they will replace. I hope that the Minister will commit himself this evening to an urgent, independent assessment of the impact of scrapping electrification.

--- Later in debate ---

[Kelvin Hopkins (Luton North) (Ind)]

I rise to speak about railway costs, the way they have exploded in the past 25 years and what I think now needs to be done. I will speak, by way of example, about the incredible increase in the costs of rail electrification.

The Minister and his departmental officials may have seen the illuminating recent article in the Rail Professional journal by Don Heath, a brilliant railway engineer who led and masterminded the electrification from Hitchin to Edinburgh in the late 1980s and early ’90s. In his article, he describes how that was done and achieved so efficiently. It is a fascinating read. He concludes by contrasting the costs of that earlier electrification with present-day electrification costs. It is almost beyond belief that, stripping out inflation, costs are now seven times greater than when the east coast main line was electrified. They have multiplied by seven times in real terms. I urge the Minister and his officials to read Don Heath’s piece. The modern, bloated costs of electrification have led directly to the abandonment of the Great Western scheme to south Wales, Bristol and Oxford, the Kettering to Sheffield electrification, as well as electrification from Manchester to Leeds.

The ballooning cost of railway track work in general is not new. It happened very soon after privatisation and has continued. In my early days in the House, I raised these costs several times with Transport Ministers. I had been informed by sources inside the industry that track maintenance costs had risen fourfold and track renewals fivefold since privatisation. At no time did Ministers say that my figures were wrong, and the Secretary of State once said that costs should be reduced by 80%. It was astonishing. A little later, however, Network Rail agreed that track maintenance should be brought in-house. Sadly, the inefficiencies that had developed in the private contracting sector were brought in-house, too, the same methods having been brought in-house together with the same people to manage them. I also pointed out to the then chair of Network Rail that the thick end of track maintenance and thin end of track renewals overlapped and that leaving track renewals outsourced while insourcing track maintenance was illogical. He grimaced but did not challenge my view.

There is now a dwindling resource of expertise in the industry, with a handful of older British Rail-trained engineers often trying to pick up the pieces of mistaken work on the tracks. The loss of skills is a major problem that can be addressed only by rebuilding a dedicated, comprehensive, in-house, permanently employed cadre of skilled railway engineers and operatives. British Rail had that, and it worked. British Rail has been wrongly maligned, when it actually worked “miracles on a pittance”—not my words but those of the rail regulator some 15 years ago. It had the lowest railway costs in Europe, except for Sweden; now our railways are the most expensive in Europe. The answer to the problem is obvious, and I urge Ministers to think on it.