Rail 2020

Kevan Jones Excerpts

Wednesday 3rd July 2013 Commons Chamber

[Iain Stewart]

The hon. Gentleman seems to have a rose-tinted view of British Rail. I gently remind him of the nationalised British Rail catering options, from the curling cheese sandwiches to the tea and coffee that were indistinguishable. I would support private innovation in that field.

[Mr Kevan Jones (North Durham) (Lab)]

I am sorry that the hon. Gentleman has such strange views of the old British Rail, which I accept was starved of investment under successive Governments, but certainly the breakfast on the east coast main line was excellent.

[Iain Stewart]

I am too young to have been able to enjoy the east coast main line in those years, so I cannot comment, but from what I remember of the old British Rail Scottish region, the catering offer was not—

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[Ben Gummer]

The hon. Gentleman is a marvel of this House and is respected deeply by many Members on both sides of the House. However, he must see that the graphs of declining rail use up to 1995, for both freight and passenger, were turned on their heads after privatisation. That is not just a correlative effect, but a causal one.

[Mr Kevan Jones]

I am interested in the hon. Gentleman’s history lesson. He is right that the early railways were pioneered by private enterprise. However, by the time they were nationalised, many of them were in a dire state. That was the case not just in this country, but around the world. Rail passenger numbers went down after the war because there was a rise in car ownership and because of the development of road transport. The reason Germany has good railways is that a British civil servant planned the system after the second world war.

[Ben Gummer]

This is an interesting parlour game and we should pursue it at greater length outside the Chamber. The hon. Gentleman is right that the railways were on their knees after the war. That was partly a result of the war and partly a result of the rise of the car.

It is interesting that this necessary monopoly that was challenged profoundly in the second half of the 20th century is now able to compete successfully with motor vehicles and planes, precisely because of the investment from the private sector. As a result of that investment, the subsidy per passenger kilometre has gone down considerably since privatisation, even though the total subsidy has gone up.

[Ben Gummer]

I agree completely with my hon. Friend. I will come on in a second to the link between his constituency and mine.

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[Ben Gummer]

I will give way in a while, if I may.

The Government are continuing a strategy. There are, rightly, arguments about whether the franchising process was got exactly right, but to my mind, John Major’s privatisation of the railways was one of his most significant acts. It has transformed the way in which—[Interruption.] Opposition Members laugh, but they ignore the fact that we now have some of the safest railways in Europe, second only to Luxembourg, which we did not have before privatisation.

[Ben Gummer]

The hon. Lady shakes her head, but she should listen to the facts. We have the fastest rate of passenger growth in Europe. We have the safest railways in Europe after Luxembourg. That is the result of privatisation, which has made a significant difference.

The ideologues are the Opposition Members, including the shadow Secretary of State for Transport, who espouse the ideology that dare not speak its name. She wants gradually to bring the railways back into public ownership and undo the extraordinary progress that has been made.

[Mr Kevan Jones]

The hon. Gentleman has a very selective view of history. He obviously does not remember—perhaps he was still at school—the period between privatisation and the effective renationalisation of Network Rail, when there were a number of tragic rail accidents in this country because of the inefficient way in which privatisation was carried out and the lack of investment. He must take into account that the effective renationalisation of Network Rail was how the investment was got right.

[Ben Gummer]

I am giving a bit of history because it does inform our discussion of the franchise process, which is the core of the report. I am not going to start trading statistics, but over the period of Railtrack, rail safety improved and we were going up the European safety league table. The reason so much money had to be invested—very successfully with private help—was the years of underinvestment by a series of Governments, Conservative among them. I disagree with the hon. Gentleman’s intervention on that point, not least because the facts on the safety of the rail network under privatisation speak for themselves.

How do we get this franchise system to work so that rail companies can compete with their natural competitors, the motorways and the airlines? I plead with the Government to do as much as they can. I know that the advice they have had recently has been to shorten slightly the long franchises that have been planned, but the longer the franchise rail companies can get, the better their ability to invest in rolling stock, customer service and improving the capacity and punctuality of their services.

Those of my constituents who have had the misfortune of having to commute on the Ipswich to London line for a long time will say that the best improvements they have seen were under the first franchise—as I am sure my right hon. Friend the Minister will agree—which was quite long and had the loosest possible terms. It allowed the then Anglia franchisee to put maximum efforts into improving performance. The last Government did many good things in rail, but one of the bad things was to have far too tight a control over the franchises, stipulating to the dot and comma how the services should be delivered. Unsurprisingly, the bidders for those franchises went in at the lowest possible price, bidding on the specification provided by the Government, and the improvement in service flattened and, in some cases, reversed. We need as loose a franchise framework as possible, and as long as possible so that the private sector can invest as fully as possible in the services without being second-guessed by the doubtless otherwise brilliant officials at the Department for Transport.

We need to see other improvements, and I am glad that the Committee recommended them in its report. We need transparency in subsidy. The system is still not good enough at identifying where subsidy goes. I have tried to understand how much subsidy goes in to the great eastern main line. Network Rail and the Office for Rail Regulation are not good at disaggregating subsidy in sufficient granular detail. I have questioned them about control period 5, but it is almost impossible to get a decent idea of the quantity of subsidy or public investment we are likely to get in our line, which makes it very difficult for us, as public representatives, to fight for our constituents.

Transparency is also important for the way in which the franchise system develops. When privatisation was introduced, there was only one profit-making line in the UK and there are now many that turn a surplus. Effectively—and I know that the Minister disagrees with me slightly on the detail of this—fare income is transferred from one part of the country to another. Roughly £30 of the £74 standard fare ticket from Ipswich to London is paid in premium which is moved, effectively, to those parts of the country that need a subsidy. That is unfair on my constituents, especially those who are paid the same bad wages that some people in subsidised areas are paid. They rightly demand a social subsidy so that they can get their rail service for less than they would otherwise.

If a lot of our fare income is being moved to other parts of the country, it makes it difficult for us to get the investment we need. We should have more transparency about how the premiums are moved so that we can achieve some sort of parity for investment.

I turn now to a discussion of the east of England, and I know that the Minister has a constituency interest there and, therefore, a profound knowledge of the area. Only two regions of England outside London are net contributors to the UK Exchequer: the south-east and the east. Since the 19th century, the eastern region has suffered some of the worst levels of investment. Historically, there has been a poor level of investment in the main line from London to Norwich, with hand-me-down carriages and levels of service that other parts of the country have long forgotten about. The region has contributed to the UK economy in the past five or 10 years, but investment is needed for that contribution to continue. The region is not demanding new motorways or A roads, but investment is required for people to able to get from London, Ipswich and Norwich to the midlands. That would lead to growth that would make a significant contribution to the UK economy.

We are profoundly grateful for the investment that has occurred in the past few years. It was promised for many years, but not delivered. We will soon have a direct line between Felixstowe and Nuneaton, the constituency of my hon. Friend the Member for Nuneaton (Mr Jones). Thereafter, I hope we will have a direct line from Nuneaton to Coventry. I hope—the Minister will speak on this later—that there will be a new bypass loop north of the Minister’s constituency of Chelmsford, which would release capacity and improve performance between London and Norwich. All of these plans, in addition to Ely North junction, have been long promised and long talked about. They are at last being delivered, and for that we are very grateful. However, we need new trains on the new track; not now, not immediately or in the next few years, but within the new franchise that will be set in 2016. We need the new trains that have been provided to the rest of the country and have been denied to us. Whenever the rest of the country is finished with a new train, it is passed on to East Anglia. That is no longer good enough.

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[Mr Kevan Jones]

Does my hon. Friend agree that increasing congestion on the roads is one reason rail usage has gone up, not the great privatisation, which is what the hon. Member for Ipswich (Ben Gummer) thinks is the reason?

[Kelvin Hopkins]

My hon. Friend is absolutely right. We have seen people travelling longer distances to work and growth in the economy, particularly in London and the south-east, leading to much more commuting from longer distances to take advantage of lower house prices further from London, and so on. The amount of travelling that people need to do has increased enormously. The only way they can do it is by rail. I speak as someone who is sometimes asked by people, “How long does it take you to drive to London?”, to which I say, “I don’t know and I’ve never done it”—why would I, from Luton to London every day? That is my view of rail. I have been a passionate supporter of railways for a long time.

However, since privatisation we have seen a surge in costs, not just on the operating side, but on maintenance and track renewal. Time and again when Labour was in office, I raised with Transport Secretaries the fact that the costs of maintenance and track renewal had gone up by four or even five times since privatisation. The reason was largely to do with the move towards more contracting and away from direct works. That contracting involved lots of lawyers and layer upon layer of project management, all of which meant bureaucratic cost, which is still the situation now. Indeed, after some time maintenance was brought back in-house. The problem was that the bad habits established while it was contracted out continued and the same people who operated in the contracted-out version carried on doing the work in-house, so there was not much difference. We have to look back to how things operated in the days of BR, when they were done much more efficiently.

Direct employment of engineers is crucial in that. Rather than having project managers running schemes, with layer after layer of project management, and engineers employed as consultants, we should have engineers directly employed by Network Rail and running schemes from the top, not being brought in as expensive consultants.

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[Mr Kevan Jones (North Durham) (Lab)]

I thank my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) for her contribution, and for the work she does as Chair of the Transport Committee not only on rail but on all transport matters. As we have heard, passenger numbers are growing and the amount of freight on our railways has increased, and it is important to bear that in mind when talking about the future structure of railways in the UK. The argument made by the hon. Member for Ipswich (Ben Gummer) that those increased numbers were somehow down to the fact that John Major got privatisation so right stretches his ideological point a little far. As my hon. Friend the Member for Luton North (Kelvin Hopkins) said, in recent years the increase in car ownership and congestion mean that many journeys cannot be made by road within a sensible time, and—quite rightly—people are using the railways.

An efficient and well structured rail system for the UK is not only important to provide the transport links we rely on for individual travel and freight; it is also vital for our economy, especially in regions such as the north-east of England. That is why investment in our railway system is so vital. We have heard a lot of talk over the past few weeks about the capital investment projects outlined by the Government, but over the next two years we will actually see a reduction in the transport budget of some £300 million. A lot of the investment projects that have been outlined are jam tomorrow, or even jam a very long way into the future. Capital investment in our railways now would not only improve the situation in the ways outlined by my hon. Friend the Member for Luton North, it would stimulate the economy. Such investment would not be wasted; it would boost the economy of the United Kingdom and it would certainly improve the economies of regions such as the north-east of England.

We had a debate on High Speed 2 last week. When I opened the Daily Mail this morning, I found myself in a rather difficult position, because I found myself agreeing with Lord Mandelson. That has to be a first, although I was not sure that I could believe what I was reading. Some of the points he raised were perfectly legitimate, however. The investment in HS2 is going to be enormous and, I have to say, regions such as the north-east will see very little benefit, even when, in the longer term, the high-speed route reaches Newcastle or beyond.

There has been a silly argument about high-speed rail being an alternative to regional air transport in this country. I do not agree with that; I believe that the two can compete alongside each other, as the hon. Member for Ipswich said earlier. For someone travelling from the north-east to Bristol, for example, flying is a better option than taking what is at the moment a long train journey. I do not think that the investment in high-speed rail will produce greatly reduced journey times to Birmingham and beyond. I also fear that it could sap scarce capital investment from the existing rail network.

We have to thank the Victorians for many things, and our existing rail network is one of them. It was a good example of their forward thinking. I accept that, under nationalisation, a number of Governments starved the network of investment, and that that led to some of the problems that we now face. However, that should not take away from the achievements of British Rail, including the introduction of the high-speed InterCity 125 service. That was so far-sighted that the service is still running today.

As my hon. Friend the Member for Luton North has said, we could achieve some quick and relatively inexpensive changes to the north-east main line for a fraction of the cost of HS2. Those changes would have a dramatic effect on journey times and, as he said, they would achieve a modal shift as we moved freight off the roads and on to the railways. Before we embark on the full investment in HS2, those proposals need to be looked at seriously. They are doable and relatively cheap, and they would benefit many regions of this country, not 20 or 30 years in the future but now.

[Kelvin Hopkins]

I agree with everything my hon. Friend has said—not just the compliments he has paid me but the earlier part of his speech, with which I strongly agreed. The outside estimate for the GB Freight Route scheme is £6 billion, which is a tiny fraction of what is being proposed for HS2.

[Mr Jones]

My hon. Friend makes a very good point. We also need to consider the multiplier effect of such a scheme, and the economic benefits to regions such as the north-east. There would be benefits in reduced journey times, and in the increased amount of freight on the railways. The climate change cost would also be reduced as we got freight off the roads, and the scheme could create regional expansion in areas such as County Durham.

[Guy Opperman (Hexham) (Con)]

I am following the hon. Gentleman’s argument with interest, but would he not agree, given the funding for the northern hub, the improvements to northern rail services and the totemic importance of HS2, that there is now a strategic shift, supported by those on both Front Benches, in favour of high-speed rail coming to the north-east? That must surely be a very good thing.

[Mr Jones]

I fear that we will have exactly what we experienced in the early days of the channel tunnel, when trains travelled at high speed through northern France and then came to a slow stop at the other end, crawling into Waterloo. The idea that someone would travel to Birmingham or Manchester by high-speed rail and then continue the journey on the current CrossCountry network is ridiculous.

The hon. Gentleman, representing a north-east constituency as he does, will be well aware that travelling to Birmingham, for example, is very difficult at the best of times. Even if journeys to Birmingham and Manchester were speeded up marginally, travelling to the eventual destination could take a further two hours. If the hon. Gentleman has ever travelled from Durham to Manchester, he will know that it takes about two hours, and sometimes involves changing trains at York. As my hon. Friend the Member for Luton North has suggested, the investment that is being proposed could reduce those journey times now, at a fraction of the cost of HS2.

I hope that I do not sound too much like the little boy who pointed out that the emperor had no clothes on, but I have seen a great many projects such as this, and it is clear to me that the Government have become starry-eyed about HS2. In the last Parliament, Lord Adonis became starry-eyed in the same way, saying that this was the big idea that would solve the problems of the United Kingdom’s railway network. I am sorry, but I do not agree.

[Guy Opperman]

Both the hon. Gentleman and I contributed to Lord Adonis’s review of the north-east for the North East local enterprise partnership. Consideration of HS2, the northern hub development and an increase in connectivity between the various regions of the north-east formed a pivotal part of that review. I respectfully suggest that the lessons that we discussed and apparently learnt at that time seem to have been forgotten by the hon. Gentleman, given the speech that he is delivering now.

[Mr Jones]

The hon. Gentleman may have had the privilege of contributing to Lord Adonis’s report, but I was never even asked for my opinion. I think that many things in that report are complete nonsense, and that it has been given a status in the north-east far beyond its content. What my hon. Friend the Member for Luton North has proposed would increase connectivity in the north-east at a far lower cost than HS2, and would, I believe, be of more benefit to the north-east.

It interests me greatly that the hon. Member for Hexham is now enthralled by Lord Adonis’s report and believes that it is the answer to the problems of the north-east’s economy. I am afraid that I do not share his view, and I think that if he talks to people in business and to his parliamentary colleagues, he will find that many of them do not share it either. The debate about the investment in HS2 needs to take place, and I hope that it is not too late for some of the decisions that have been made to be reconsidered.

[Kelvin Hopkins]

One assumes that the hon. Member for Hexham (Guy Opperman) would travel to Newcastle on HS2, and would then take a slower train from Newcastle to Hexham. In fact, in 1990 a train on a British Rail test run travelled to Newcastle in the same time that it would take on HS2.

[Mr Jones]

Exactly—and if we are talking about the scarcity of capital, we should consider the upgrading of links to Hexham. In my constituency, some existing lines could be opened up. The Leamside line, for instance, could take freight off the main routes.

Let me now say something about East Coast. My hon. Friend the Member for Blackley and Broughton (Graham Stringer), who is not in the Chamber at present, wondered why the Government were in such a rush to return to privatisation. As he said, the line is contributing to the Exchequer, and is performing well in terms of punctuality and the quality of the service that it provides. Investment in rolling stock is clearly needed. However, the staff have worked hard to ensure the success of the line since renationalisation. They should be given credit for that, and for the tremendous loyalty that they have generated among the travelling public.

[Iain Stewart]

May I draw the hon. Gentleman’s attention to one of the recommendations of Richard Brown’s review of the franchising system after the west coast main line issue? He said that

“it is very important that the franchising programme is restarted as soon as possible.”

I would suggest that that is a reason for bringing forward the franchising process for the east coast main line.

[Mr Jones]

That may well be the case, but is it going to be good for the taxpayer? We currently have a very successful operator contributing to the taxpayer, so why automatically go down this route, unless there is an ideological reason of wanting to ensure that the operator moves from the public sector back into the private sector, which is clearly the position of the hon. Member for Ipswich (Ben Gummer)?

[Iain Stewart]

One of the other conclusions of the Brown review was that the pause in the franchising programme was having knock-on effects in the railway procurement industry, and that delay could interrupt the important investment in long-term projects. That is one of the reasons Brown concluded that the franchising timetable should be restarted as soon as possible.

[Mr Jones]

I am going to come on to the issue of franchising in a moment, but the hon. Gentleman’s point is based on the assumption that the Government would not invest in the rolling stock now for a nationalised company. The idea that the new rolling stock will be provided only by a private provider is not a good enough reason for saying that we should not at least examine the reasons for keeping the company in public ownership.

This is not just about the rail network itself; it raises issues around rolling stock and guaranteeing jobs in this country in providing new rolling stock, including through new investment in the north-east by Hitachi, which is very welcome and is locating a new factory at Newton Aycliffe.

How local people can influence the franchising process is a key issue. My hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) raised the important point of the transparency of the process, and there is a constituency issue that I have been campaigning on for a number of years now: the stretch of the east coast main line that goes through my North Durham constituency from Chester-le-Street into Newcastle. Chester-le-Street has now increasingly become a commuter town for Tyneside and Teesside. It takes less than 15 minutes to travel from Chester-le-Street into Newcastle, and if it was in south-east England it would therefore be seen as an obvious place to commute to work from. In the mornings and early evenings there is an hourly, and sometimes a half-hourly, service, but throughout the rest of the day the timetable is intermittent, and later in the evening when people want to travel into Newcastle for entertainment there is a limited service.

I pay tribute to the campaign of the stationmaster at Chester-le-Street, Alex Nelson. He has been arguing for an hourly stopping service from Chester-le-Street to Newcastle. We have met Northern Rail to make the case for that, and the point it keeps making to us is that the franchising model puts an emphasis on inter-city routes, rather than stopping services. It is clear from the public meetings I have had about this issue over the past few years that there is huge interest in Chester-le-Street to ensure it gets an hourly service into Newcastle not only at peak times, but throughout the day and at weekends. That would serve to reduce the number of cars travelling to Newcastle and alleviate congestion. We need to think about how local people can have a voice in determining issues such as the train service from Chester-le-Street, which is not only important for local people, but which benefits the economy of Tyneside. A study has recently been undertaken on widening the western bypass, as we need to get the cars off that. One of the easiest ways of doing so is to invest in the likes of an hourly stopping service from Chester-le-Street.

Finally, I wish to discuss the wider transport picture in the north-east. I congratulate the seven local authorities in the north-east which are coming together in a strategic partnership to examine economic development. Not only that, but one of their key objectives is to look at a joined-up transport policy. This debate is about rail, but we cannot look at that in isolation; we need to consider how it joins up to other public transport networks, be it the buses or the Metro system in Tyneside. It also needs to be as easy as possible for people to transfer from one mode of transport to another. One thing I would like the authorities to back is some kind of Oyster card, whereby people could travel using different modes of transport in the north-eastern region. That would make travel a lot easier, and the new authority may well be able to push forward with such things. The investment we need in our rail network is not only vital for the purpose of people travelling; it is vital to the future economic benefit of this country and certainly of regions such as the north-east.

[Several hon. Members]

rose—