Inter-City Rail Investment

Lilian Greenwood Excerpts

Thursday 9th January 2014 Commons Chamber

[Lilian Greenwood (Nottingham South) (Lab)]

I congratulate the hon. Member for Redcar (Ian Swales) on securing this debate, which has addressed some national issues. Important constituency concerns have been raised by hon. Members, including those who represent Plymouth, Brighton, Cleethorpes, Luton, Edinburgh, and St Austell and Newquay.

There has been shared agreement across the House that strengthening rail links between our cities is an important step to achieving balanced economic growth for individual cities, city regions, and the nation as a whole. I am sure that all Members who have spoken today will work to ensure that although individual disagreements may arise, the commitment to an ongoing programme of investment endures.

There has been much positive talk today about future developments, and I know that for many hon. Members, those projects cannot be delivered fast enough. I entered Parliament with a pledge to campaign for the electrification of the midland main line, and although some issues still need to be addressed, the improvements look on course to reach the east midlands by 2019, and Sheffield by 2020.

Electrification will ensure faster, more reliable services, as well as delivering environmental and efficiency gains. We have heard other examples of how planned projects will benefit communities, including from my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck), and other south-west MPs who are very much looking forward not only to electrification, but to modern Intercity Express Programme trains, investment in improved resilience, and even wi-fi and power sockets.

As we begin to plan for control period six spending in the next Parliament, we must consider how other links can be strengthened, new links made, and Beeching-era lines reopened where there is a clear business case to do so.

It is worth remembering just how far the rail industry has developed in the past 15 years. The 1997 Labour Government inherited a fragmented rail network. Years of underinvestment had left a dated fleet, much of it still using slam-door carriages, which was to prove inadequate against a backdrop of rising passenger numbers. The popular and successful inter-city brand had been broken up. There had been 1,000 days without orders, which had caused permanent damage to the supply chain. Disastrously, the recently privatised infrastructure body had little understanding of its assets, and Railtrack’s over-reliance on subcontractors put passengers’ safety in danger.

[Kelvin Hopkins]

I congratulate my hon. Friend on her speech. Would she say that it is a tragedy that Britain, which gave railways to the world and built them all over the world, is now importing railway equipment because in some cases we cannot build it ourselves?

[Lilian Greenwood]

I certainly agree with my hon. Friend that it is important that we support and develop our railway engineering industry, which has such a proud history and continues to provide important sources of employment, particularly in my area in the east midlands.

Contrary to what the hon. Member for Redcar said—I have to disagree with him on this—I think we should be proud of Labour’s achievements. After ending the failed Railtrack experiment and establishing a tough new regulator, our railways became the safest major European network by 2010. There was a major programme of investment in rolling stock. More than 5,000 new vehicles were ordered between 1997 and 2006 alone, both to replace older trains and to allow for an expansion of services. The number of long distance passengers, and the services run to accommodate them, doubled since the mid-1990s, and with that growth came new pressures on our existing lines. We are now accommodating the same number of passengers as we did in the 1920s, but on a network that is less than half the size. That is why the previous Government committed to a number of important projects to improve capacity and overall performance of the network, including the electrification of the Great Western main line to Swansea and key lines in the north-west, and a new generation of inter-city express trains to replace the ageing rolling stock on the Great Western and east coast main lines.

It was the Labour Government who committed to Crossrail and introduced a £6 billion upgrade of the Thameslink route that will massively increase capacity on one of the busiest stretches of track in Europe. After the completion of HS1 in 2007, Lord Adonis set out plans for a new network to relieve capacity constraints on our north-south main lines, and to provide better connections between cities in the midlands and the north. They will address some of the very slow journeys highlighted by the hon. Member for Redcar, and provide improved capacity and connectivity to our national network.

[Caroline Lucas]

The hon. Lady is talking about Labour’s successes. I welcome the fact that Labour has agreed to keep the east coast main line in public hands. Will she confirm whether it will follow the logic of that position and support my Railways Bill, which would bring all the franchises back into public hands as they expire?

[Lilian Greenwood]

As the hon. Lady says, we think the east coast main line is providing an important public sector comparator that will help us to evaluate the future of the rail industry. What is clear is that the current structure is not delivering enough for passengers. That is why, unlike the Government parties, we are prepared to review it and to look at alternatives that will deliver the best deal for passengers and taxpayers.

Unfortunately, all of the essential projects that I set out a moment ago were subject to delays after the general election. That caused uncertainty and, in some cases, pushed back completion dates.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

I have been at the Westminster Hall debate this afternoon, otherwise I would have been here earlier. My hon. Friend mentioned the east coast main line. May I endorse the comments, which I know were made earlier by hon. Members on both sides of the House, on the need for the excellent services on the east coast to be improved by ensuring that the electrification system works and that the overhead lines do not come down too often and disrupt traffic in a way that, unfortunately, they have done all too often in the recent past?

[Lilian Greenwood]

I will return to the east coast main line in a few moments.

Electrification of the Great Western main line, which has come up several times today, is a case in point. After pausing the project in May 2010, electrification to Newbury was announced in November that year, but the project’s extension to Cardiff was not announced until March 2011. Ministers said then that the line to Swansea would not be electrified, and it was not until they faced further pressure that, over a year later, they agreed that the route to Swansea would be electrified after all. In other words, thanks to the Government’s prevarication, a project initially announced in July 2009 was not confirmed until three years later. Given the importance of bringing forward infrastructure projects to deliver sustainable economic growth, even a Tory-led Government can surely do better than that.

There has been a similarly sorry tale in rolling stock procurement. In March 2011, the Prime Minister met the chairman of Bombardier and said that he was

“bringing the Cabinet to Derby today with one purpose – to do everything we can to help businesses in the region create the jobs and growth on which the future of our economy depends”,

but just four months later, Bombardier announced 1,400 job losses as a result of his Government’s decisions. Even after this debacle, there was an unacceptable two-year delay before financial close was reached on the contract. The Public Accounts Committee said recently that it was

“sceptical about whether the Department has the capacity to deliver the remainder of the programme by 2018.”

After the Government’s failure to keep HS2’s cost under control and the collapse of rail franchising on their watch, it is difficult to have faith in the political leadership of the Department. The failure of the franchising system has cost the taxpayer at least £55 million, and the Government’s refusal to consider Directly Operated Railways has left civil servants in an exceptionally weak bargaining position when agreeing direct awards. Under the terms of the Great Western contract extension, FirstGroup will pay only £17 million in premium payments next year, compared with £126 million in 2012-13. Investment has been delayed and orders have been put on hold, hurting the supply chain and threatening jobs and skills.

At a time when Ministers have been overtaken by problems of their own making and the Department is struggling to get essential projects out of the sidings, it is remarkable that the Government’s top priority is selling off the east coast main line franchise before the next election. I commend my hon. Friend the Member for Edinburgh East (Sheila Gilmore) and the hon. Member for Brighton, Pavilion (Caroline Lucas) for their persistence in raising this question with Ministers. Since 2009, East Coast has gone from strength to strength. It has delivered a new timetable, achieved better punctuality and passenger satisfaction scores than the previous failed private operators, won multiple industry awards and developed a five-year plan for improving inter-city services on the line.

The casual reader will be forgiven for not getting this impression from the Government’s franchise perspective, but thanks to a leaked draft of that document, we know that positive references to the company’s performance were removed at the last minute, as Ministers desperately tried to rewrite history. But East Coast’s commercial performance speaks for itself. By February 2015, it will have returned almost £1 billion to the taxpayer in premiums, and it has invested every penny of its profits—some £48 million—back into the service, but under the Government’s plans, that money would be split between private shareholders instead.

Before Christmas, East Coast announced that half its fares to London would be frozen and that most of its fares would be cut in real terms in 2014. Will the Minister tell us how many private operators have announced a cut in the average cost of their fares? The truth is that the Government have allowed train operating companies to raise prices by up to 5%—more than double the rate of inflation—and the average season ticket is now 20% more expensive than it was in 2010. So at a time when passengers are facing a cost-of-living crisis, why are the Government seeking to abolish the publicly owned operator that is cutting the cost of fares?

It is difficult to resist the conclusion that East Coast has risen to the top of the Secretary of State’s to-do list because it has proven itself as a successful alternative to franchising, and that is why Ministers are so determined to push it out the door before the election.

We know from written answers that the public cost of refranchising could reach £6 million, along with other wasted millions lost due to the west coast shambles. All this money could have been spent instead on alleviating the cost-of-living crisis or investing in the railways. As it stands, the refranchising of East Coast represents the triumph of ideology and short-term political calculation over passengers’ best interests and a wilful disregard for public resources.

I urge Government Members, particularly Liberal Democrat Members who before the election were opposed to selling off East Coast, to think again and halt this un-needed, unwanted and wasteful privatisation. The priority must be delivering a fair deal for passengers and ensuring that the essential projects that so many Members wish to see are completed.

[Ian Swales]

The hon. Lady makes an interesting point about East Coast. During the 13 years of the Labour Government, how many times was the franchise renewed and did the Government consider taking it into state ownership?

[Lilian Greenwood]

I would accept that we were perhaps too accepting of the overall franchising model. There were many problems on the railways that the Labour Government had to sort out, but we are at least prepared to look at alternatives, which is more than can be said at the moment for the Conservatives and Liberal Democrats. With all the inter-city franchises expiring in the next Parliament, we are right to look again at the best way to structure the railways to deliver real value for passengers and taxpayers.

My message to the Government is clear: “Call off the privatisation, get the Department in order, and make sure that essential investments in our inter-city lines are kept on track.”