Rail 2020

Lilian Greenwood Excerpts

Wednesday 3rd July 2013 Commons Chamber

[Lilian Greenwood (Nottingham South) (Lab)]

I congratulate the Transport Select Committee on the “Rail 2020” report, which combines an informative overview of the rail industry with some acute analysis of the challenges it faces. It certainly provoked a thoughtful debate this afternoon, albeit not necessarily one that involved a high degree of consensus. I suspect that the challenges to franchising in particular have deepened since the report was published last year. If the Committee were to repeat its inquiry today, perhaps its conclusions would be even stronger.

When the McNulty report was published in 2011, it was widely acknowledged that the rail industry was in need of reform. Privatisation had left us with a fragmented and opaque system—a system that incurred massive costs and offered little accountability for the money being spent. Contrary to what the architects of privatisation had promised, subsidy had increased in real terms since the mid-1990s—

[Mr Simon Burns]

Under your Government.

[Lilian Greenwood]

And passengers faced some of the highest fares in Europe, as well as often bewildering pricing structures. The Minister says, “Under your Government” from a sedentary position, but that is precisely why we commissioned McNulty to look at how to achieve efficiencies.

The Committee’s recommendations on financial transparency, fares and ticketing reform and devolution were welcome, but implementation has been delayed by a Department that seems to have been overtaken by problems of its own creation. In the past year, we have witnessed the collapse of the franchising system, which has cost the taxpayer at least £55 million. Those are the direct costs; that figure does not cover the fall in orders that is hurting the supply chain or the uncertainty that still hangs over the industry, nor does it reflect the damage that has been inflicted on the Government’s own efficiency plans—both points well highlighted by my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman).

The Government intend to find £3.5 billion of industry cost reductions by 2019. An annexe to the “Rail 2020” report states that while

“Some of the savings are already in Network Rail’s plans, most of the rest have to be secured by passenger train operators and their suppliers…via the next generation of franchises.”

Does the Minister accept that analysis? If he does, what does he believe the cost to the taxpayer will be in deferred efficiencies, owing to the much extended delays to the franchising programme?

Against that background, Ministers have taken the politically motivated decision to make the privatisation of East Coast their top priority. At the same time as they are agreeing lucrative extensions for private operators, at great cost to the taxpayer—for example, it was recently reported in the trade press that the c2c contract extension came in £17 million over budget—for ideological reasons the Government are disrupting the one stable part of the network. Since the last private operator walked away, East Coast has returned £640 million to the taxpayer and invested £40 million in the service; it makes the second highest contribution of any operator to the Treasury; and it has significantly improved passenger services.

East Coast provides an interesting test of the Government’s commitment to openness. Despite Ministers’ stated intention to improve transparency, they are trying to have it both ways when it comes to East Coast. The Government cannot both laud the Office of Rail Regulation’s breakdown of the industry’s finances, as they did in the formal response to the “Rail 2020” report, and dismiss the figures that show East Coast to be most efficient operator. It is simply not credible.

The Government have even invented a new measure to bolster the comparison between Virgin Trains’ and East Coast’s premium payments while conveniently ignoring subsidy going the other way. As the net payment figures show, East Coast comfortably paid more to the Treasury over the past three years, but Ministers have tried to give the opposite impression. It is not policy led by evidence—it is just the opposite—from a Government determined to push through privatisation, which will not benefit the railways or passengers.

We have seen no progress on fares and ticketing either. The Government’s review was originally due to be published in May, but we are now told that it will be published at some point in the summer. The Minister will surely appreciate the irony when he next lectures East Coast on punctuality. I hope that the review will now bring forward serious proposals for reform, because at present passengers often find it difficult to secure the cheapest tickets, especially from automatic ticketing machines. The definition of peak and off-peak is not always obvious, and as a consequence some passengers find themselves with huge bills through no fault of their own.

Passengers also rightly feel aggrieved when they have to use a replacement bus service but are not entitled to compensation, regardless of the inconvenience to their journey. Those are the sorts of issues that the fares and ticketing review should be looking at. The Transport Committee was right to call for so-called super-peak tickets to be ruled out. They would penalise those commuters who have no choice but to travel at peak times. I urge the Minister to go further than he had done previously and rule out granting train operating companies the right to redefine peak time periods. I also ask him to give the House a categorical assurance that operators will not be given additional powers to price commuters out of peak time periods.

[Ben Gummer]

There is a technical problem with the hon. Lady’s suggestion. Currently, with the Government setting peak times, we end up with the ridiculous situation that people leaving London to go to Ipswich, Norwich or Chelmsford in the morning are on empty trains and paying £74, but if they are going into London they are of course on packed trains and paying £74. The Government have set the peak time rules for many years, so the franchisee cannot make an elastic arrangement to encourage people to take the train when it is empty and discourage them when it is full. I suggest that that is in the commuter’s interests.

[Lilian Greenwood]

I suggest that the people who stand to suffer as a result of that are those who have no choice about when to travel. If people have a choice, they will not travel on peak trains. Those who have no choice will be stung by having to pay whatever price is asked.

As the McNulty report put it, we have a fare structure that is complex, often appears illogical and is hard for the uninitiated, or even the initiated, to understand. The answer is not new, unreasonable super-peak fares. We fully support the development of smart ticketing schemes, a policy closely linked to the devolution agenda. Transport for London and Centro have demonstrated how strong local transport authorities can successfully introduce smart card schemes, making rail and other forms of public transport more convenient for everyday use. We believe that regional partnerships are best placed to introduce new schemes, drive forward integration with other modes of transport and decide their own priorities for developing local rail services.

However, the pattern of dither and delay from the Department for Transport is also affecting the devolution agenda. Were it not for its extensions to the Northern Rail and TransPennine franchises, we could have seen an earlier decision on devolution, with the new settlement starting next year. We want to see an ambitious model of genuine devolution, learning from the success of continental models, that can be extended to other areas, including the west midlands.

Unfortunately, we have already seen some reductions in local facilities. Although they are not as high profile as the cuts to passenger services we have seen in the past, we are concerned about ticket office closures, especially as some seem to be going ahead by stealth, using the McNulty review as cover. Last year, leaked e-mails from the Department for Transport revealed that Ministers had decided to approve closures and let train operating companies take the blame. That was an unacceptable way for closure decisions to be taken. I hope that Ministers will take note of the Campaign for Better Transport’s “Going Local” report, which drew together evidence from London Overground and Merseyrail. The evidence suggested that staffed stations and ticket offices led to increased passenger numbers, lower levels of fare evasion and increased passenger satisfaction.

There are simply better ways to save money than closing ticket offices. Of course we need more efficient railways. Network Rail has delivered substantial efficiency savings since Labour ended the disaster that was Railtrack, and the rolling programme of electrification, which the last Government committed to, will help reduce operating costs.

However, as McNulty helps to establish, although technology can bring about savings, the greatest challenge is fragmentation. Privatisation has left us a system with a 40% efficiency gap as measured against European comparators. Fragmentation has built in additional unnecessary costs at every level and we need a serious debate about how they can be addressed. On the Government’s response, it is too early to quantify properly the impact of alliancing and there are real concerns over the accountability of the Rail Delivery Group, which must not be used as an excuse to diminish ministerial responsibility.

We must also be alive to the danger that through alliancing, non-dominant operators will be excluded from decision making. That is especially true in the case of freight operators—a danger acknowledged by the hon. Member for Milton Keynes South (Iain Stewart). If there are increased disputes over access rights, that will only generate a higher administrative burden for the regulator.

To conclude, I should say that the Government have tied themselves so closely to the stalled franchising system that they have left the industry in stasis. Awards are being extended for up to four years at a massive cost to the taxpayer, on top of the £51 million net payment that the Government made to operators in the last financial year. The paralysis caused by the collapse of franchising has hit the supply chain’s order books, threatening jobs and skills. Ministers have made restoring franchising a point of political pride, even to the extent of privatising the successful east coast service, instead of seriously examining alternatives. That is what Labour is committed to doing, and why we are conducting a thorough review of the rail industry that is not hampered by ideological baggage.

The “Rail 2020” report made some useful recommendations for reform, but it also noted that there could be a case for structural changes. In the light of the franchising fiasco, we should seriously examine the alternatives, instead of remaining ideologically wedded to the failed models of the past.

--- Later in debate ---

[Mr Burns]

Well, let’s move on.

I was just saying that I am surprised and disappointed that the hon. Member for North Durham does not share the enthusiasm of his colleague the Leader of the Opposition for the new high-speed railway. I hope that he will be reassured, however, that rail is thriving. It makes a vital contribution to the UK’s economic competitiveness and the Government’s investment ensures that that will continue.

The Government recognise, however, that we need to work to make rail even better. As recent surveys have shown, although passenger satisfaction is high on average across Great Britain, it can vary significantly across franchises, and although nine out of every 10 trains are running on time, with historically high levels of performance, punctuality is not yet as good as it should be, particularly on long-distance services, but also on London, south-east and regional services. Finally, the railway still costs more than it should.

We fully understand the importance of achieving the McNulty savings, which have been mentioned by the hon. Member for Liverpool, Riverside and others. Our railways must become more efficient and financially sustainable. It is crucial that we ease the pressure of fares on hard-working families and reduce the burden on taxpayers, which is another issue of concern, not only to members of the Transport Committee, but to other hon. Members who have taken part in this debate.

That was the challenge in the Government’s rail Command Paper: how to reduce the costs of running the railway while keeping the passengers at the heart of everything we do. We are making progress. Network Rail will have delivered 40% efficiencies over 2004-2014 and the regulator recently announced a new 20% target for 2019. Further efficiencies will be made through the programme of franchising competitions and the initiatives of the Rail Delivery Group. The key message is that aligning incentives between train operators and Network Rail is one of the most important reforms to drive down costs and bring passenger benefits.

[Lilian Greenwood]

Will the Minister set out how that has been set back by the delays to franchising, which he seems to be glossing over? Questions have been asked about whether his Department is up to the task.

[Mr Burns]

The hon. Lady is labouring the point a bit. It has been made quite clear—[Interruption.] If the hon. Member for Scunthorpe (Nic Dakin) keeps quiet and listens, he will get the answer. This matter obviously causes amusement in every part of the Chamber.

High Speed 2 (Ancient Woodlands)

Lilian Greenwood Excerpts

Wednesday 3rd July 2013 Westminster Hall

[Lilian Greenwood (Nottingham South) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Osborne. I apologise for my terrible cold, which is affecting my delivery somewhat.

I congratulate the hon. Member for Lichfield (Michael Fabricant) on securing this important debate and for posing some important questions on behalf of his constituents and others who are concerned about our natural environment. The debate will be followed closely in communities along the proposed route and, speaking as a Greenwood myself, I have a natural sympathy for a number of the points he made. The debate is timely, because there are only eight days left before consultation on the phase 1 draft environmental statement closes. We have heard from right hon. and hon. Members about the impact on ancient woodlands. Before addressing such valid concerns, however, I will say a few words about the wider environmental significance of the new north-south line.

A new line can help the UK to meet its 2050 carbon reduction targets under the Climate Change Act 2008 by attracting new passengers to the railways and by providing the additional capacity that freight and passenger services need. The rail freight sector has enjoyed 10 years of growth, and any Government that is serious about tackling carbon emissions would want to see that success continue. Without additional capacity, however, the risk is that freight operators will have to be turned away in future. Greengauge 21 looked at the environmental impact of the HS2 project last year, in a report commissioned by the Campaign to Protect Rural England, the Campaign for Better Transport and the Royal Society for the Protection of Birds. That report makes it clear that the environmental benefits of the new line have a close relationship with other policy areas.

At the moment, rail journeys consume much less carbon than equivalent car journeys. That gap was expected to close as more electric cars entered the market. I remind Government Members that the full coalition agreement included a commitment to

“a national recharging network for electric and plug in vehicles”.

In reality, those plans have been drastically cut back. It may make uncomfortable listening for some Government Members, but the Government’s failure to deliver a national recharging network strengthens the environmental case for a new rail line.

The report also highlights the need for a full network as the carbon reduction benefits are multiplied fourfold when the second phase to Manchester and Leeds is factored in. The Government should and could have provided that certainty by introducing a single hybrid Bill to cover the entire route, allowing construction to start at both ends of the line. We need a clear timetable for decarbonisation of the electricity market, and that was one of the report’s recommendations. Labour has made a commitment to decarbonise the sector by 2030 before phase 2 of the new line is completed.

Network Rail has embarked on a major programme of electrification on our existing rail network, as well as on the new high-speed line. We need an ambitious timetable for decarbonisation to reduce the impact of that additional demand. There are steps that the Government could take now to maximise the environmental benefits of the new north-south rail line, However, those wider gains will not cancel out the loss of individual habitats. Loss in some areas may be unavoidable, but damage should take place only when all reasonable alternatives have been exhausted. The test is whether every reasonable step has been taken to mitigate environmental damage.

Hon. Members and communities along the line have raised serious concerns about the way in which HS2 Ltd has handled consultation up to this point. It is no secret that many of the early community forum meetings in particular were badly organised, with underprepared staff giving incorrect or conflicting information to the public. As the Chilterns Conservation Board said at the time, the meetings were characterised by

“a lack of clarity on what the Community Forums will actually cover. Many of the HS2 Ltd staff…were…quite new in post and could not confirm how the meetings should work or even if they would be attending future ones.”

The Minister must ensure that when the consultation on the final environmental statement begins—I would welcome a date for that—the process is transparent and accessible, and that enough time is provided for proper responses fully involving the affected communities. More than a year on, there are still serious questions about the route, including whether the tunnel under the Chilterns will be extended, with only eight days left for the draft environmental statement consultation.

The situation was not helped when misleading statements were made early last year. In a letter to the right hon. Member for Chesham and Amersham (Mrs Gillan), the then Secretary of State for Transport, the right hon. Member for Putney (Justine Greening), suggested that woodland could be transplanted to an adjacent site, a process known as translocation. We must be clear that ancient woodland cannot be moved, but some animal species and soil can be moved or translocated, although the consequences of moving soil from ancient woodland are, sadly, poorly understood. Any trees that are moved will be coppiced, radically altering their appearance and risking the death of individual trees during the moving process. Although some constituent parts of the woodland may be salvaged, the original biodiversity cannot be recreated and is lost for ever. Natural England has said that translocation might, if carried out as a last resort when loss of the original habitat is completely unavoidable, form part of a package of compensation measures. In other words, translocation may have a part to play, but we must be honest about its limitations.

The onus should be on route design and mitigation measures to avoid disrupting ancient woodland in the first place. Some measures have been introduced to reduce the line’s impact, such as additional tunnelling, but we would like clearer information about the cost, especially now that the overall cost of the project has increased, largely because of new tunnels in west London, Birmingham and the east midlands.

[Michael Fabricant]

Will the hon. Lady clarify whether the official Opposition now support the route, more or less, that we proposed when in Opposition, which would follow an existing transport corridor, thus minimising environmental damage, and not the Adonis route that we have adopted?

[Lilian Greenwood]

I thank the hon. Gentleman for his intervention. He is right to point out that we considered alternative routes and argued that they should be considered by the new Government. We want the project to proceed, but there are significant concerns about the Government’s timetable, particularly the hybrid Bill. The Government are in a position to make decisions and we want the project to proceed, but that does not mean that we should not look carefully at the option for mitigation and compensation to protect the natural habitat.

Will the Minister tell us whether he is satisfied with the way in which alterations to the proposed route have been made so far, whether he expects further changes, including additional tunnelling, to avoid ancient woodland, and whether he has given any thought to how ancient woodland in particular will be approached during the hybrid Bill’s petitioning process? When the Bill goes into Committee, the Government will be able to set limits of deviation restricting the extent to which alterations may be made during that process. We ask for careful thought to be given to how ancient woodland might be affected by those limits. The commitment to planting new trees is welcome, provided they form a sensitive and effective sound barrier, but they cannot replace ancient woodland which is, by definition, irreplaceable.

I am pleased that the hon. Member for Lichfield agrees that a north-south rail line is right in principle. As the House debated last week, there is an impending capacity crunch for our railways, especially on the west coast main line which will be full by 2024.

[Mrs Gillan]

The hon. Lady says that the west coast main line will be full by a certain date. Can she give me her source of information and the evidence base on which her statement is based?

[Lilian Greenwood]

My information is based on the evidence provided by Network Rail and others showing the continuing huge growth not just on the west coast main line, but on all rail lines. There is great demand from passengers and freight and we must be able to meet that from an environmental perspective because of the importance of rail for our future economic growth and regeneration.

A new north-south rail line is necessary to keep pace with rising passenger and freight demand. This project can bring additional private investment along the route, generating jobs and growth while improving connections between our cities, particularly in the midlands and the north. The hon. Member for Lichfield was absolutely right to call for this debate on ancient woodland, which is a particular concern for his constituents. This discussion comes at a crucial point as the designs for phase 1 are finalised. I hope that the Minister will explain exactly how he intends to act on the back of the points raised today, and provide full answers to the questions that other hon. Members and I have posed.

There is no doubt that there is a difficult balance to be struck. High-speed rail can help to deliver carbon reduction, which is why the Woodland Trust, the Campaign to Protect Rural England and Greenpeace support it in principle. Inaction is not an option, as road schemes and degraded air quality also threaten woodland. The line can bring real environmental benefits, but only if other policy decisions are taken, including in particular a commitment to decarbonise electricity. That wider context is crucial, especially as Parliament is being asked to confer extra spending and planning powers in aid of the scheme.

As hon. Members have pointed out, there is an apparent contradiction between the Government’s national planning framework, which contains a provision against development on ancient woodland sites, and the proposed route, which goes through several such areas. This is exactly the sort of issue that could be addressed in the long-awaited national transport strategy, but three years in, the Government still do not have one. Perhaps the Minister will tell us when he expects the document to be published; it would be of great assistance to MPs and the public as the debate continues.

To conclude, we have lost half our ancient woodland since the 1930s, mainly as a result of agricultural development. The hard truth is that although the new north-south rail line will bring a great number of benefits, it is likely to result in further loss. That is a matter of regret, and both the Government and HS2 Ltd must present an absolutely watertight case when they propose the disruption or destruction of ancient woodland sites. I promise hon. Members and the wider public that Labour will return to the issue during the Bill’s Committee stage.

--- Later in debate ---

[Mr Burns]

May I say to my right hon. Friend, in shorthand script, that the answer to both points is no? First, I am not on a sticky wicket. I am outlining to hon. Members what the Government are doing to try to minimise the damage. It is certainly not a sticky wicket; it is actually a range of proposals and initiatives of which I believe that the Government can be proud because of the efforts that we are putting into ensuring that we do everything to avoid causing damage when that is possible and, when it is not, taking the maximum opportunity to minimise the damage that will be caused by building the railway.

Secondly, I do not accept the point about conflict with what HS2 is proposing. Yes, by definition, we cannot uproot an ancient woodland and transplant it lock, stock and barrel to another site, so in that respect my right hon. Friend is correct, but what we can do is take the measures I have described to transplant an area when woodland is being lost because of building work, which will go a considerable way towards helping to protect and improve the environment. That will not, of course, be the same as if one did nothing at all and left the existing ancient woodland, but it is a very good second-best option, and it is certainly better than doing nothing at all and letting that woodland be lost for ever.

[Lilian Greenwood]

I want to return to the Minister’s statement about no net loss. I query whether that is consistent with the Government’s national policy as set out in the natural environment White Paper and the national planning policy framework. Should they not actually adhere to the current policy of net gain?

[Mr Burns]

Yes, certainly. What I said was absolutely right: there will be no net loss. We will work according to that principle. In some respects, we will have to wait and see whether there is an increase, particularly with the second phase of the route. All my right hon. Friend the Secretary of State has done is to publish the proposed preferred route—the consultation is still to take place. Just as with the hybrid Bill on phase 1, and the hybrid Bill on phase 2 in due course, decisions may be taken in the light of the process that might have an impact. As of now, the policy, the intention and the determination is that there will be no net loss.

Many of our remaining ancient woodlands are small, and there is generally a patchwork of fragmented sites in an intensive agricultural landscape. One of our objectives, which is very much in line with the recommendations that emerged from the Lawton report, is to take this opportunity to link fragments of ancient woodland, when practicable, through the planting of new woodland links. Natural England and the nature conservation NGOs have welcomed that approach, and I hope that it will be welcomed by hon. Members in the Chamber and beyond. Even though it can take many years before the replanted woodland returns to anything like the character of the original, such planting is important to ensure that future generations can enjoy these important sites, but we would be open to any other ideas, if people think that a different form of compensation would be more appropriate. I invite any of my hon. Friends or the official Opposition to contribute if they have any ideas that they believe will help to improve or enhance the process.

We should not lose sight of the fact that many of the best environmental specialists in the country are working on a detailed environmental impact assessment, which will identify the true effects and allow us to bring forward our plans to mitigate them as much as we can. It is currently in draft form for consultation, so I urge all hon. Members to ensure that their constituents who have an interest contribute to the process.

[Mr Burns]

I do not want to cause disharmony between myself and my right hon. Friend, but I am afraid that what I said in correspondence to her is the answer: I am not prepared to look again, because there has been a reasonable period, for reasons I will come to when I answer the last question asked by my hon. Friend the Member for Lichfield. In the spirit of co-operation, however, I will respond to her important point about the Brett tunnel option. She asked whether we will reconsider whether the tunnel could be extended beyond where it is proposed to end. HS2 Ltd has looked at the matter again and found that an extension will not offer more benefits than the current option, not least because to extend the tunnel beyond the wood, we would need a ventilation tunnel in the middle of the wood, given the safety requirements for tunnels of certain lengths, and I believe that that would be far more environmentally damaging than the current proposals.

I now come to the specific points raised by my hon. Friend the Member for Lichfield at the end of his speech. He asked whether my Department will look further at how the loss of ancient woodland can be minimised. The answer is emphatically yes. HS2 Ltd is constantly looking at the route and refining the mitigation that can be applied, and that will continue up until the hybrid Bill process. He asked what assessment has been made of how many hectares of ancient woodland will be lost. HS2 Ltd’s proposals, as they stand, identify fewer than 36 hectares of ancient woodland lost for phase 1, including the land needed for the construction phases of the route. That will be confirmed in the environmental statement that comes before Parliament later this year. It is too early in the design of phase 2 to give accurate figures on the potential loss, but 17 ancient woodland sites are directly affected by it. For some of those sites, the impact is at or near the margins of the wood, and there is scope for reducing the impact as the design progresses. I hope he is reassured on that.

My hon. Friend also asked how much of the total cost of HS2 will be spent on avoiding the loss of woodland and creating new woodland as part of the mitigation process. I hope that he will be pleased to learn that the rough estimate—he will understand why there is only a rough estimate at this stage—is between £10 million and £20 million. We have not finalised the ancient woodland compensation measures however, which will be reported in the formal environmental statement.

My hon. Friend asked whether we will undertake to involve DEFRA and environmental organisations more fully. I assure him that DEFRA, Natural England and the Environment Agency are fully engaged in phase 1 and will continue to be fully engaged. He also asked what involvement communities will have in any mitigation planning. HS2 Ltd engages with local authorities through the planning forum and local people are engaged through the community forums and the current round of consultations. Their views will continue to be considered throughout the development of the designs for HS2. I reiterate that it is important that people respond to the consultations and engage fully in the whole process so that we can work together to do as much as we can to get this right.

Finally—my right hon. Friend the Member for Chesham and Amersham might also be interested in this—my hon. Friend asked whether we will ensure that the full environmental impact assessment, when it is published alongside the Bill, will be a major improvement on the “somewhat inadequate work” that was released earlier in the spring—those are my hon. Friend’s words, not mine. I hope that I can reassure him. The draft environmental statement has been provided at the earliest stage to enable people to participate in the development of the scheme. There is no requirement for the Government to provide such a draft, so we are setting a high standard by taking this approach and publishing the document. To my knowledge, no project on this scale has attempted to provide such information at this early stage—before there is even consent.

[Lilian Greenwood]

Will the Minister give way?

Oral Answers to Questions

Lilian Greenwood Excerpts

Thursday 27th June 2013 Commons Chamber

[Mr McLoughlin]

I welcome Norwich’s ambitious plan to double the number of adults cycling over the next 10 years. An announcement on the successful cycling ambition grant bidders will be made as soon as possible, but as I said in my opening statement we cannot be complacent about cycling safety. I look to the increasing interest in the House in this subject and I will consider what else the Department can do.

[Lilian Greenwood (Nottingham South) (Lab)]

Will the Secretary of State introduce new legislation to improve the regulation of level crossings before the end of this Parliament?

[Mr McLoughlin]

I will certainly consider what the hon. Lady says about level crossings. I have had conversations with Network Rail about what we should do about them. I will look at whether legislation is the right way to go or whether we already have the powers to get things put right.

High Speed Rail (Preparation) Bill

Lilian Greenwood Excerpts

Wednesday 26th June 2013 Commons Chamber

[Lilian Greenwood (Nottingham South) (Lab)]

As we have heard today from numerous hon. Members, the railways face an imminent capacity crunch. The lack of capacity is holding back growth and costing the taxpayer, as our existing infrastructure bears an ever heavier burden. Soon, on the west coast main line, the route will effectively be full. For passengers, this means overcrowded peak services, with many commuter trains regularly running at more than 150% capacity. I challenge anyone to use their travel time productively when they do not even have a seat to sit in. We need radical action to break through the logjam and provide additional connections between our major cities. That is why a new line is needed.

HS2 is a project for the country as a whole; it is a new north-south rail line to connect our cities, slash journey times and release additional capacity for freight and passenger services. As a major infrastructure project, it can drive economic growth, attracting additional investment along the route while delivering jobs and skills. We have heard already today about the failure of this Government on infrastructure spending, which was down by nearly 40% in the past year. That makes it even more important that a new line is built, but there must be strong oversight of its delivery.

A number of hon. Members have said that we should improve the infrastructure we already have. Of course, we must continue to invest in our existing network. We have always been clear that projects such as the northern hub must be complementary to a new line, but there are limits to what we can do with our current infrastructure. We have already spent more than £9 billion on the west coast upgrade. Hon. Members representing constituencies along the route will know just how disruptive that process was; indeed, the hon. Member for Milton Keynes South (Iain Stewart) described it as an absolute nightmare. Although that work made essential improvements, it did not provide the additional capacity needed to keep pace with passenger demand. As Network Rail has said:

“The lack of capacity will become even more acute beyond 2024 as demand continues to grow. The most effective and best value for money way to create additional capacity will be through building a new line.”

We must not look at passenger growth in isolation. The freight sector has enjoyed a decade of continual growth, but with limited additional paths available, there is a risk that freight operators will have to be turned away in the future. Any Government serious about climate change will want a growing rail freight sector to help reduce carbon emissions and congestion on our motorways. But the challenges facing freight underline the danger of treading water instead of delivering a new line.

We also have to consider the improvements that can be made to passenger services. As a constituency MP, I know how overcrowded and slow the services between Nottingham and Birmingham can be, holding back a growing commuter route, and inadequate connections between our core cities are stopping commuter routes developing at all. It can take more than two hours to travel from Nottingham to Leeds on existing services, but the new line should cut that journey time by two thirds.

A number of hon. Members, including the hon. Member for North West Leicestershire (Andrew Bridgen) and my hon. Friend the Member for Birmingham, Hall Green (Mr Godsiff), have suggested that high-speed rail will only benefit London, but that underplays the growth we have seen in regional traffic. From 2000 to 2010, passenger growth between Manchester and London was 70%, whereas between Manchester and Birmingham it was 105%. In addition, we must not forget that this project was driven forward, in part, by the regions. For example, Centro, the transport authority covering Birmingham, started to make the case for high-speed rail in 2008, before the last Labour Government became committed to the project.

The Government have announced this week a regional growth commission, chaired by Lord Deighton. Ministers must ensure that local authorities have every opportunity to contribute to that review. As my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) rightly said, the Government must work with local bodies, including transport authorities and local enterprise partnerships, to maximise economic development and the benefits from released capacity. This is an area where the case has not been made strongly enough. So far, local media coverage has been dominated by HS2 Ltd’s suggestions for reductions to existing mainline services. That is a pity, because the released capacity and rolling stock could help enable more local services and even the reversal of some Beeching-era cuts, but Ministers and HS2 Ltd have not made that case. They must do so if the constituents of Members such as my hon. Friend the Member for North East Derbyshire (Natascha Engel) are to be convinced.

That is part of a wider problem. It sometimes feels like the project is being developed in isolation, with little regard for other transport needs. We know that we will not see a decision on a spur to Heathrow until the Davies commission reports, after the next election. We would have liked that decision to be made sooner.

We are also concerned about the day-to-day running of HS2 Ltd, for which Ministers are ultimately responsible. A station redesign for Euston was announced with no prior warning or consultation. My right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) spoke passionately on behalf of his constituents about that point and many others. New tunnels appeared for west London and the east midlands without clear information about how they would impact on the overall cost of the project.

According to the National Audit Office, the Department for Transport and HS2 Ltd need to do more to make the business case for high-speed rail. There has been no information on the cost of tickets. The new line cannot be a rich man’s toy; all fares must be subject to regulation on the same basis as the rest of the network.

We have also not had the commitments we would like on apprenticeships. We have said that an apprenticeship should be created for every £1 million spent, creating 33,000 apprenticeships over the lifetime of the construction project. A similar approach is training a new generation of skilled workers through Crossrail, and Ministers should build on the experience to ensure that apprenticeships and opportunities for young people are delivered as part of the new rail line.

Many right hon. and hon. Members and their constituents have understandable concerns and questions remaining about compensation and I would be grateful if the Minister could tell us when he expects the new consultation on the subject to be announced. We need to make sure that we are getting value for money, especially as we are debating a spending Bill today for a project that has increased its preparatory budget from £773 million in 2010 to more than £900 million today. We will continue to press the Government on these issues in Committee.

Let me recap. There are real questions that Ministers need to address. However, they are questions about how the project is being introduced, not about the need for it. We can meet our capacity challenges only through serious investment, and treading water is not an option.

For too long we ran a 19th century railway on the 20th century principle of “make do and mend”. In an age of rising passenger demand, that is no longer enough. We are not managing decline; we are investing in the future. The proposed line will cover 330 route miles, directly linking most of our major cities and cutting journey times from others. It will improve transport links between England, Scotland and Wales, as my hon. Friend the Member for Clwyd South (Susan Elan Jones) pointed out. It will meet or even exceed the standards of the rail infrastructure of our continental competitors. It will be a north-south rail line—one might even call it a one nation rail line.

It would have been better to have introduced a hybrid Bill for the whole route, but at least this preparation or paving Bill does cover both phases. We will support the Bill as we want the project to succeed, and we will hold the Government to account as we go into Committee.

East Coast Main Line Franchise

Lilian Greenwood Excerpts

Thursday 20th June 2013 Commons Chamber

[Lilian Greenwood (Nottingham South) (Lab)]

I congratulate my hon. Friend the Member for Edinburgh East (Sheila Gilmore) on securing this important and timely debate, which builds on her strong campaigning work on behalf of passengers, and the many hon. Members who have supported the compelling case that she set out.

Since the Government announced the reprivatisation of East Coast services in March, the decision has been fiercely criticised in Parliament and the country at large. Ministers have been pressed on numerous occasions in this House and through dozens of written questions, yet they have not produced a single credible reason for rushing through this costly and unnecessary privatisation—a point that my hon. Friend the Member for York Central (Hugh Bayley) made very eloquently, as did many others. Instead, one by one, the props supporting the Government’s argument have been kicked away.

We were told that the east coast main line had to be privatised because punctuality had plateaud; and perhaps it really had disappointed in four weeks out of 52. That was the narrow window that the Minister quoted when he appeared before the Select Committee on Transport. Indeed, he even described East Coast as the worst operator for punctuality. However, contrary to what the hon. Member for Peterborough (Mr Jackson) claimed, the annual figures show that over the last year the east coast main line has outperformed the west coast on punctuality, according to both the public performance measure and the narrower “right time” assessment. Punctuality is now better than under the previous, failed private operators and is at its best since records began.

[Mr Stewart Jackson]

I thank the shadow Transport spokesman for giving way, but I did not actually say that. I compared the performance with the performance of the best-performing train operating companies, rather than making a strict comparison with the west coast main line. That is an important distinction.

[Lilian Greenwood]

I shall have to refer back to the record, but it is my recollection that the hon. Gentleman described East Coast as the worst operator for punctuality, which is certainly not the case, so this privatisation cannot be about punctuality.

We were also told that the east coast main line must be privatised in order to attract private sector investment. The Minister told the Select Committee:

“I do not believe that keeping the East Coast Main Line in public ownership is the most effective and swiftest way of getting that investment.”

However, as he has confirmed in written answers to hon. Members, the cost of rolling stock procurement and track upgrades on the east coast main line will be met through public spending, just as the cost of the £9 billion west coast upgrade was borne by the taxpayer. If anything, the Government’s plans threaten investment. At the moment, all the east coast profits are invested in the service, instead of being split with shareholders. That would end in 2015 if the Government have their way, so this privatisation cannot be about investment either.

We were also told that privatisation would deliver better value for money. On that point the Government’s argument takes its final departure from reality. Since 2009, East Coast has returned £640 million to the taxpayer and invested £40 million of its profits back in the service. As the Office of Rail Regulation recently confirmed, East Coast receives virtually no subsidy and yet made the second highest premium payments of any operator in 2011-12. To put that into context, subsidy accounted for just 1% of East Coast’s income, compared with an industry average of 32%.

East Coast is also performing a vital role as a public sector comparator, especially as the Government seek to negotiate extensions with operators. This is an important point, and I shall return to it shortly. East Coast delivers good value for money, benefiting taxpayers and fare payers. Let us compare today’s situation with the instability and cost that resulted from the collapse of Sea Containers and the decision of National Express to walk away from the franchise. Against that backdrop, and taking into account ageing rolling stock and a route that was last upgraded in the 1980s, Directly Operated Railways has done very well to record such a strong financial performance.

East Coast’s improvements to financial and operational performance have also been reflected in better services for passengers. Since 2009, the operator has introduced a new timetable providing 19 more services per day and, far from lacking innovation, it has taken initiatives on customer services. For example, many train operating companies are encouraging passengers to print advance-purchase single tickets at home, but East Coast is the only operator that allows them to amend a print-at-home ticket up to the evening before departure.

The proposed privatisation is not about passengers. It is not about operational performance and it is not about value for money. It is about politics, and the determination of the Government to end a successful, not-for-dividend alternative to franchising. The taxpayer will end up footing the bill for this politically motivated decision. There will be the immediate cost of running the franchise competition. Will the Minister tell the House what the overall cost will be to the taxpayer of refranchising the east coast route?

That covers only the direct cost, however. As we seek to reduce inefficiencies on the railways, East Coast provides a useful public sector comparator—a benchmark against which we can measure the costs of franchised operators. That was certainly the position of the present local transport Minister, the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker). Perhaps he did not enjoy the support of the hon. Member for Argyll and Bute (Mr Reid) when, in 2009, he told the House:

“My view on the franchise agreements is clear…if a franchise is handed in to the Government—handed back—it should be held in the public sector as a public interest franchise, not least as a comparator for other franchise agreements currently operating.”—[Official Report, 3 June 2009; Vol. 495, c. 83WH.]

That was his view in opposition. I wonder whether it is still his view in power.

[Mr Jackson]

Will the hon. Lady give way?

[Lilian Greenwood]

I will not give way at the moment. I do not want to run out of time.

Directly Operated Railways has another function. It allows the Government a fall-back operator, should they fail in their current negotiations for franchise extensions. Indeed, earlier this month, the Minister of State, Department for Transport, the right hon. Member for Chelmsford (Mr Burns) told the House:

“The operation of train services by DOR is an essential part of the privatised franchising model.”—[Official Report, 5 June 2013; Vol. 563, c. 225WH.]

However, the Government are proposing to remove all operational responsibilities from DOR, leaving the body hamstrung. He cannot expect to retain the experienced and capable management team at DOR once the East Coast route is privatised. As the Department goes into negotiations for franchise extensions and direct awards, the train operating companies will know that Ministers are loth, for political reasons, to transfer operations to Directly Operated Railways. That must be dispiriting for those civil servants who are sent to negotiate the best possible deal for the taxpayer. As my hon. Friend the Member for Edinburgh East has noted, Ministers have taken their strongest bargaining chip and thrown it away. This mindset and this lack of imagination are compounding the costs incurred by the shambolic collapse of rail franchising on this Government’s watch. That collapse has cost the taxpayer at least £55 million, and the price is rising.

[Mr Jackson]

I have to ask the hon. Lady a straightforward question: in 13 years, why did not the Labour Government repeal section 25 of the Railways Act 1993 in order to facilitate the franchising regime that she and her hon. Friends think is the right way forward?

--- Later in debate ---

[Lilian Greenwood]

I cannot speak about that as I was not here, but the fact is that we now conducting a thorough review of the how the railways are structured. East Coast should be kept as a not-for-dividend operator, and we are committed to doing that.

[Mr Reid]

Will the hon. Lady give way?

[Lilian Greenwood]

No, as I want to make some progress.

Decisions on rolling stock have been postponed and a lack of orders is hitting the supply chain, threatening jobs and skills. The National Audit Office has raised serious concerns over the Department for Transport’s ability to deliver major projects, including HS2, and the Thameslink rolling stock contract is only now being signed after an unacceptable three-year delay.

With that background, it is no surprise that the rail industry has been shaken with a loss of confidence in the franchising process, hurting not just those on the front line, but the wider industry as well. Instead of concentrating on the problems caused by the collapse of the west coast and Great Western tenders, the Government are selling off the one part of the network that is benefiting from an extended period of stability. The east coast line could benefit further if the Government only had the courage to support it. Management have prepared a five-year plan for improving services, but Ministers have damned East Coast with faint praise, conceding that it is doing a good job, yet pushing through their politically motivated timetable for privatisation.

As Lord Adonis and my right hon. Friend the Member for Tooting (Sadiq Khan) said this week, it makes no sense to reprivatise an East Coast service that is working. Let me quote the noble Lord:

“East Coast is doing a great job and it should be allowed to get on with it…It has an impressive performance record, it has a loyal customer following and it is making big payments back to the government from its profit—to keep fares down for the travelling public—without needing to pay dividends to private shareholders …The government’s decision to rig the franchising timetable to get this unnecessary privatisation under way is requiring them to agree costly extensions to other contracts, wasting tax-payers’ money.”

He is right, and I hope that the Government listen to that argument.

We now have an opportunity to learn lessons and improve the rail industry for the better. Ministers should proceed on the basis of the best evidence available and promote what works instead of relying on political dogma. So it is disappointing to see them repeating the mistakes of the 1990s, when the ill-thought-through privatisation of the rail industry left us with problems with which the network is still grappling today. Now we have this unneeded, unwanted, and unjustified privatisation of the east coast main line—a service that has quietly and successfully improved the quality of journeys; a not-for-dividend operator that has delivered good value for money and reinvested profits in the service, unlike the private operator that walked away. There is no financial or operational case for privatisation. It is a transparently political act from a Government who are prepared to risk undoing the progress of the recent past. Passengers deserve better. I hope that Ministers will listen to the arguments made in the House today and halt this costly and unnecessary privatisation.

--- Later in debate ---

[Mr Burns]

I was wondering whether the hon. Lady was going to intervene.

[Lilian Greenwood]

I intervene merely to confirm that I have not had any telephone conversation with the noble Lord since we last spoke over the Dispatch Box.

[Madam Deputy Speaker]

I call Simon Hughes. I am sorry; I mean Simon Burns.

--- Later in debate ---

[Mr Burns]

No, I want to make some progress.

By returning the east coast franchise to a private sector operator, we will provide certainty of ownership and much longer-term planning horizons that are not available to public sector operators. That is vital at a time when this Government are making significant investment in the franchise, both in the infrastructure through our rail investment strategy and in new rolling stock as part of the inter-city express programme. A strong private sector partner will be able to build on that investment and work with local stakeholders, the Department and the railway industry to ensure that the best possible deal is delivered for passengers and taxpayers.

I heard the concerns raised by a number of hon. Members about services along the line and what they would like to see for their constituents and the service in general in any future provision.

[Lilian Greenwood]

The Minister recently said the east coast needs a long-term private sector partner that is able to cope with the totality of this change programme. Will he explain to the House in plain English what precisely he meant by that?

[Mr Burns]

Absolutely, and doing so will also help answer the points made by the hon. Member for Livingston. The Government are investing significantly in the east coast main line because its infrastructure needs to be improved and enhanced, but Governments are not awash with unlimited amounts of money. We are more ambitious for the east coast main line, and we believe from the experience of other franchisees that they are prepared to invest their money as well, to build on the investment that the Government provide, through Network Rail and other sources, to ensure that there is more investment in improving services for passengers, which is the key aim. That is why this Government are making record amounts of investment in infrastructure, amounting to billions and billions of pounds; such is our commitment to improving passenger services.

[Mr Burns]

No, because I am running out of time.

Part of the success of franchising comes from having both a private sector that is willing and able to invest and manage risks and a Government who have the ability to step in, in the short term, to ensure the continued service of the railways in the event of a franchise failure. While we do everything we can to avoid such failure, we must be in a position to step in so that there is a continuation of service if a franchisee were to get into trouble, as happened with National Express on the east coast main line in 2009. That is the whole purpose of DOR. It is not a company like other companies providing franchise services within the rail network. It is there as a company of last resort in an emergency to ensure continuity of service under the Railways Acts. This should never be considered a long-term solution, and it is not an alternative model to franchising. Many Members totally misunderstood or did not get that point. This is fundamental: DOR is not an alternative model to franchising. We firmly believe that the private sector is best placed to deliver the best value for the passenger and taxpayer, and DOR allows us to make that choice.

[Lilian Greenwood]

Will the Minister give way?

[Mr Burns]

No; I am running out of time. The nature of Directly Operated Railways, as an interim measure and operator of last resort, means it would not be right or practicable for it to plan beyond the short term. In order to provide the stability and innovation that is needed for any business, in particular a rail franchise that serves the public, it is necessary to be able to plan well into the future and make investment decisions that have a horizon beyond the short term. To meet this need, the inter-city east coast franchise must be transferred back to the private sector.

A number of Members have suggested that East Coast should be maintained in public ownership for an extended period to provide a comparator or baseline for future private sector operators on the franchise, or against operators on other parts of the network. This approach does not work. All franchises are different, and with changes to charges and funding occurring every five years, they even differ from themselves over time. Any attempt directly to compare one franchise with another, or even one incumbent with another on the same franchise, ends up simply comparing apples with pears. East Coast, a large inter-city franchise, is obviously different from Essex Thameside, a franchise providing commuter services on a much smaller route. Clearly, it would be folly to try to make valid comparisons between them. However, even with the apparently similar inter-city west coast franchise, differences in fleet size, cost base, network grant, investment plans, disruption and other factors make drawing a valid comparison with East Coast almost impossible.

There is a comparator already in existence. In the past 17 years since privatisation, the number of passengers using the railways has doubled from 750 million to 1.5 billion. The number of journeys has doubled, and the amount of freight moving off our congested roads and on to the railways has increased by 60%. The comparator is the British Rail model that satisfied no one, failed to respond to its customers and was totally unsuccessful.

East Coast Main Line

Lilian Greenwood Excerpts

Wednesday 5th June 2013 Westminster Hall

[Lilian Greenwood (Nottingham South) (Lab)]

It is a pleasure to serve under your chairmanship, Dr McCrea. I congratulate my hon. Friend the Member for Middlesbrough (Andy McDonald) on securing this important debate. We have heard about the many improvements that have been made on the east coast since 2009. My hon. Friend set out the hard facts. East Coast has made real progress since Directly Operated Railways stepped in. Yes, there is more progress to be made, but I struggle to recognise the picture of East Coast treading water. A number of puns have made, but I am not sure that the metaphor of a railway treading water, used by the hon. Member for Cleethorpes (Martin Vickers), is one that I would use. However, hon. Members have provided examples of hard facts that support the call for the east coast main line to remain as a not-for-private-profit operator.

My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) noted the improvements to punctuality that she and her constituents have benefited from. My hon. Friend the Member for Edinburgh East (Sheila Gilmore) noted the improvements in targeting business travellers, who might otherwise travel by plane, with worrying environmental consequences. There has been a 19% increase in those using the first-class service.

The hon. Member for Stevenage (Stephen McPartland) described a huge improvement in services to his constituency. He also said that passenger satisfaction should be a key measure. Of course, East Coast is getting better and better. Passenger Focus, the independent watchdog, recently recorded 92% satisfaction with East Coast—the best score found in its survey on that line since it was launched in 1999, better than under GNER or National Express.

As my hon. Friend the Member for Easington (Grahame M. Morris) suggested, the hard facts point to this being a dogmatic, ideological privatisation, rather than one based on the service.

[Stuart Andrew (Pudsey) (Con)]

I take it that the hon. Lady would want completely to dissociate herself from the comments made by the former Labour Transport Secretary, Lord Adonis, who said:

“I do not believe that it would be in the public interest for us to have a nationalised train operating company indefinitely.”—[Official Report, House of Lords, 1 July 2009; Vol. 712, c. 232.]

[Lilian Greenwood]

I do not know when the hon. Gentleman last spoke to Lord Adonis, but sensibly, like the rest of us, he responds to a change in circumstances. Over the past four years, we have seen East Coast perform well under Directly Operated Railways. Therefore, now is the time to keep it as a publicly operated service.

[Mr Simon Burns]

The hon. Lady has said something important. I do not know when she last spoke to her noble Friend Lord Adonis, but when she did, did he tell her that he had changed his mind?

--- Later in debate ---

[Lilian Greenwood]

I last spoke to my colleague probably two weeks ago. Certainly, he has changed his mind.

[Andy McDonald]

Does my hon. Friend recognise that Lord Adonis made his remarks some years ago on the basis of a National Audit Office report that looked at only eight franchises? That report underestimated the 2011-12 subsidy necessary from the taxpayer to those eight franchises by £224 million. We cannot rely on those comments, which were made in good faith at that time on false information.

[Lilian Greenwood]

The noble Lord is not here to set out his position, but I am sure that we will hear from him in due course.

[Mr Burns]

Can I help the hon. Lady on that point?

[Lilian Greenwood]

No, I have too little time.

[Mr Burns]

On that point—

[Dr William McCrea (in the Chair)]

Order.

[Lilian Greenwood]

I agree that we should be paying tribute to the work of East Coast staff. They stepped into the breach at a difficult time. The two previous franchise holders failed, with one operator walking away from its obligations entirely. Yet East Coast, run as a not-for-dividend operator, has achieved what its predecessors could not: stability and constantly improving services. This Government’s actions are putting that progress at risk.

It is worth briefly highlighting how strong East Coast’s performance has been. Passenger satisfaction is up by 12% over the last year; 3 million more seats per year have been provided; punctuality has improved and a new timetable has been established; and the service has more than held its own financially. As a not-for-dividend operator, East Coast has already returned £640 million in premium payments to the taxpayer, while recording a £40 million profit.

[Fiona O'Donnell (East Lothian) (Lab)]

I am sure that my hon. Friend is aware that the east coast main line passes through my constituency. It not only gives passengers a beautiful view of East Lothian, but is an essential part of the community of Dunbar. The instability is worrying people who use that service both to commute to London and into Edinburgh.

[Lilian Greenwood]

My hon. Friend is right. That instability is causing concern. Another thing causing concern is the fact that that £40 million profit, which has been reinvested in the service, would, under this Government’s plans, be split with shareholders instead.

I know from my own region how better services have made a real difference to passengers. In the east midlands, more services now stop at Newark; direct trains have been established daily between Lincoln and London; and two weeks ago a new commuter service was launched from Grantham. Bearing all this in mind, it is difficult to recognise the Government’s description of East Coast’s performance. Indeed, the Minister has said that punctuality on the east coast has plateaued. He even said that East Coast was the worst operator for punctuality when he appeared before the Transport Committee in April. He was then quoting from a very narrow, four-week window. Will he acknowledge today that this picture is not representative? According to Network Rail’s most recent punctuality figures, East Coast outperformed Virgin in both the last quarter and over the whole year, without the benefits of a £9 billion upgrade of its infrastructure. So this privatisation cannot be about punctuality, given that the Government have announced an extension to the operator’s contract on the west coast main line, where delays are more common.

It has been said that the Government are seeking a commercial partner to deliver investment, but will the Minister confirm today that the cost of upgrading the east coast main line and procuring new rolling stock will be met through public spending? In April, the Minister said that franchises should be measured

“by the premiums that are paid to the Government”,

as well as by reliability and overcrowding. But East Coast has made improvements in all those areas and grown the business, on a route that was last upgraded in the 1980s. The operator has developed a five-year plan and could deliver further success, if only the Government took the sensible step of backing it. Instead, we have seen an ideological decision to re-privatise the service. This is a damning indictment of this Government’s priorities at a time when the franchising system has collapsed and the National Audit Office has questioned the Department’s ability to deliver major projects.

The collapse of franchising has cast a long shadow over the rail industry. The fiasco has cost the taxpayer at least £55 million. Orders for rolling stock are on hold and the supply chain has been hit, threatening jobs and skills. The Government should be putting their house in order, so it is worrying to see Ministers instead, devoting their time to this unnecessary and unwanted privatisation, which suggests that they have not learnt the lessons from the recent past.

East Coast is working. The Office of Rail Regulation recently confirmed that East Coast receives virtually no subsidy and makes the second highest contribution back to the Treasury. We should not be undermining a successful service that has delivered real benefits for passengers. There has been enough instability on the line and the network as a whole benefits from having a public sector comparator, as my hon. Friend the Member for York Central (Hugh Bayley) suggested. I hope that the Government will now do the right thing and cancel this costly and unnecessary privatisation.

--- Later in debate ---

[Mr Burns]

The hon. Gentleman is a dinosaur in health, and he has now moved to transport. I hope he is not following me around.

[Lilian Greenwood]

In 2009, the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker) said that if a franchise holder walks away, a public sector comparator should be maintained. Is the Minister in agreement with his departmental colleague?

[Mr Burns]

The hon. Lady anticipates the very point I am about to make, which is that, under the Railways Act 1993, the Secretary of State has a statutory duty to ensure the continuous, seamless provision of rail services. That is why the Department for Transport has Directly Operated Railways. It is a body of last resort when there is a problem; it is not a permanent company, for want of a better term, to run a rail franchise indefinitely. My hon. Friend the Under-Secretary was correct in 2009, and the noble Lord Adonis was also correct.

Oral Answers to Questions

Lilian Greenwood Excerpts

Thursday 25th April 2013 Commons Chamber

[Mr Speaker]

Order. We will leave it there, although I have much enjoyed it. The Minister of State has many important responsibilities and no one in this House would disagree with the proposition that he always tries, which he advanced a few moments ago, but one thing for which he has no responsibility is the promises and policies of the United Kingdom Independence party.

[Lilian Greenwood (Nottingham South) (Lab)]

There is a growing view that by the time the second phase of HS2 is complete, Crossrail 2 will be essential to cope with the additional passengers travelling through Euston station. Is the Minister content that last week’s revised plan for Euston addresses that problem, or will the DFT now take the sensible step of assessing fully the case for Crossrail 2?

[Mr Burns]

As the hon. Lady knows, Crossrail 2 is the responsibility of the Mayor of London because it is a devolved matter. However, I accept that there is a knock-on effect for other rail services that are wholly the responsibility of the DFT. The Mayor of London announced recently that there will be a full consultation process. We await that and look forward to seeing any business case or justification. Those matters will be considered in due course, but we have to go through the due processes first.

Railways

Lilian Greenwood Excerpts

Thursday 25th April 2013 Commons Chamber

[Lilian Greenwood (Nottingham South) (Lab)]

This is an important package of proposals and we must consider their consequences carefully. As the Minister acknowledged when he appeared before the Transport Committee and today, the Government are still considering their position on several matters of detail.

A number of issues need to be looked at in the context of the UK rail industry. Given the recent success of the east coast main line and the collapse of the franchising system, we do not believe that it is necessary to move towards compulsory tendering of all passenger contracts. Within the wider package there are several proposals that we can support in principle, but reassurances are needed on a number of points.

We broadly welcome moves towards standardisation which have the potential to deliver savings to UK companies. Part of that process is the move towards uniform European safety standards, and we need to look closely at how those changes would impact on the UK. We need to look at how the proposals would affect our cross-border links with France. The channel tunnel has not yet fulfilled its potential in either passenger or freight traffic, and the proposals in the package for greater co-operation between infrastructure managers, combined with a single certification authority, may improve services between Britain and the continent. It is therefore right to pursue standardisation which could reduce costs, and it is also important that where countries have chosen to put contracts out to tender, British companies should be able to compete on a level playing field.

Previous packages have done much to remove the cross-border restrictions which hold rail back compared with other modes of transport, although as the Select Committee noted this week, some outstanding issues remain. There is still much to be done and the possibility of single certificates across the EU will be a boon to purchasers and manufacturers, who currently have to obtain approval from individual national regulators. However, there are also concerns, and we must make sure that any final agreement is in the national as well as the European interest.

Crucially, the UK’s recent exemplary safety record must not be put at risk in a rush to achieve uniformity. Since Labour ended the failed Railtrack experiment and tackled the decades of under-investment in our infrastructure, the UK has established one of the best safety records in Europe. Much of the credit must go to the work of the Office of Rail Regulation, which since 2004 has helped to deliver a significant improvement in safety standards. Fatalities on the railways are now at an historic low, but under the fourth railway package the ORR’s safety and certification responsibilities will be transferred to the European Railway Agency. Can the Minister give the House a categorical assurance that safety standards in the UK will not be weakened if the ORR’s responsibilities are transferred to the ERA? What discussions has he held with the Commission on this point? Will he give the House a full report on them today?

[Ian Lavery (Wansbeck) (Lab)]

Is it not fair to say that the British railways system is one of the safest in the world? We are on the right track with health and safety. If the package goes ahead, that could be in doubt.

[Lilian Greenwood]

My hon. Friend is exactly right. Since Network Rail took over, overseen by the Office of Rail Regulation, safety has improved enormously. That is precisely why I am asking the Government to give us the assurances that we seek.

As the Transport Committee noted, there is a

“lack of clarity about how they”—

the new standards—

“would work in practice.”

Will the Minister reassure the House that there will be a clear and simple division of responsibilities between the ORR and the ERA? What assessment has he made of whether there will have to be an increase in bureaucracy in order to enforce common standards across very different networks? The UK is currently leading Europe on safety, and our high standards must not be levelled down in order to reach a quick agreement.

There is also a difficult balance to strike on competition. Of course, where countries have decided to put routes out to tender, British companies should be able to bid without fear or favour, but the fourth railway package would force competitive tendering on all passenger services. This has already provoked opposition in Europe, and we believe that there are good reasons for opposing it in the UK too. If approved, it could deny the UK the right to maintain a public sector comparator or intervene in cases of market failure, as happened on the east coast. Since 2009, the award-winning not-for-dividend operator has returned £640 million to the taxpayer, so it is worrying to see the Commission base its proposals explicitly on the UK experience.

[Ian Murray]

My hon. Friend is making an exceptional case. The Minister talked about competition on the railways. Does my hon. Friend surmise that if a private operator returned £640 million to the Exchequer, the Minister would come to the Dispatch Box to say that it was an exemplary operator that should be encouraged?

[Lilian Greenwood]

My hon. Friend makes a telling point. The Government’s claims—

[Mr Simon Burns]

Will the hon. Lady give way?

[Lilian Greenwood]

I will respond to the previous intervention first.

The Government’s claims about the east coast main line’s performance have been blown out of the water by the Office of Rail Regulation’s recent financial report. East Coast has seen rising passenger satisfaction and been given a national award. It receives virtually no subsidy and makes the second highest contribution to the Treasury. The Government’s case for re-privatisation just does not stack up.

[Mr Burns]

The hon. Lady might want to reassure her hon. Friend the Member for Edinburgh South (Ian Murray) that the west coast main line has paid back even more money to the Treasury. In the light of what she has just said, perhaps she would like to explain her view of the comments of her right hon. and noble Friend Lord Adonis and her right hon. Friend the Member for Tooting (Sadiq Khan) on the east coast main line going back to franchising and out of public ownership.

[Lilian Greenwood]

The west coast main line, of course, enjoys the advantage of having had a major infrastructure and rolling stock upgrade, all funded by the taxpayer, and the east coast main line is due to have a large investment in infrastructure and rolling stock, also paid for by the taxpayer. Perhaps the Minister would like to reflect on the comments Lord Adonis made in last year’s “Rebuilding Rail” report. Some years after taking the east coast main line back into a not-for-dividend operator, he acknowledged that the current arrangements hold back our state operator.

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

Can my hon. Friend reassure the House that when the Government seek to put the east coast main line out for a new franchise, as they inevitably will, she will hold the Minister to account to ensure that whatever premium is paid by the new private operator will be at least the same as that which we are now receiving from the state-owned company, because anything less will surely be absolutely unacceptable to the taxpayer?

[Lilian Greenwood]

My hon. Friend makes an important point. Of course, it is not just about the premium payments. At the moment, because the east coast main line is run by a not-for-dividend operator, not only is it making the premium payments to the Treasury, but the £40 million surplus has not been shared with private shareholders; every single penny has been reinvested in improving services. I think that is what UK taxpayers and passengers want.

[Fabian Hamilton (Leeds North East) (Lab)]

Following what my hon. Friend the Member for Glasgow South (Mr Harris) has just said, will my hon. Friend hold the Minister to account so that the Government ensure not only that the franchise delivers more to the Treasury than the Directly Operated Railways are currently delivering, but that the franchise can afford to do so, because we remember the National Express fiasco?

[Lilian Greenwood]

My hon. Friend has said exactly what needs to be said on the matter.

The European Commission’s case for extending competition in that way can be found in a recently published non-paper, or document for discussion, on the UK railways. Actually, the term “non-paper” covers it rather well. It implies that privatisation was responsible for improving safety, but in fact the infrastructure sell-off had the opposite effect and subsequent investment in safety was taxpayer-funded. It also claims that privatisation itself was responsible for increasing passenger numbers, but other countries that did not fragment their systems also experienced comparable levels of passenger growth, as the Transport Committee acknowledged this week.

Most remarkably, the non-paper suggests that privatisation has reduced subsidy. At the time, we were promised a more efficient railway, but subsidy rocketed. As the Office of Rail Regulation’s financial report last week confirmed, in 2011-12 train operating companies received more public funding than they paid back. They were paid £51 million more than they gave back in premium payments, while the Government paid almost £4 billion towards the cost of infrastructure.

[Mr Anderson]

Does my hon. Friend agree that the figures show that the subsidy has gone up by 300% since privatisation and, on top of that, fares have gone up by 22% in real terms, so the public are paying for the costs of privatisation? The really perverse thing is that a lot of the subsidy from British taxpayers and fare payers is actually going to the German, Dutch and French national Governments, because they own more than half the railways in this country.

[Lilian Greenwood]

My hon. Friend is right. That is precisely why the Opposition have been prepared to look at reforming the railways.

In total, the train operating companies were left with £305 million before tax at a time when, as my hon. Friend has just said, some fares and season tickets have been allowed to rise by well above the rate of inflation. Those are the headline figures but, as the McNulty report, the Transport Committee and many others have pointed out, there is a basic lack of transparency in railway finances, as commercial confidentiality serves to obscure waste in the system.

The waste is huge. The McNulty report identified an efficiency gap of 40%, compared with the railways of four other European countries. The fragmentation of the industry has led to massive interface costs between Network Rail, the operating companies and the supply chain. Taxpayers and fare payers are supporting replica bureaucracies and unnecessary legal challenges. That money could be better invested in the industry. The great railway sell-off was a botched, rushed job. Labour took action to reverse some of the most damaging legacies of privatisation, including the disaster that was Railtrack, but the Railways Act 1993 was hurried through Parliament for political reasons, creating inefficiencies that are still with us today.

[Mr Cash]

With regard to the interesting dialogue between the question of Europeanisation, nationalisation and privatisation, does the hon. Lady agree that the consequences of adopting a positive policy towards the underlying desire to Europeanise the system of railways are alien to what I assume to be the interests of the trade unions, whether in this country or elsewhere, because Europeanisation and the bureaucracy she has just referred to will ensure that it is inefficient?

[Lilian Greenwood]

The hon. Gentleman makes an interesting point, but my concern is to protect the interests of passengers and taxpayers. That prompts the reasons for our response to the Government’s proposals today.

Rather than reading the Commission’s non-paper, Members could watch the accompanying video—I wonder how much taxpayers’ money was spent producing it—which is very amusing. They could be forgiven for thinking that there is no real dispute at all, but buried in the impact assessment for compulsory tendering is the giveaway sentence:

“There is a certain degree of uncertainty in the assessment of impacts of some options, as evidence is sometimes fairly recent (e.g. competition in the market) or ambiguous (evidence provided only by specific stakeholders). The choice to move forward with the aforementioned combination remains thus a political choice.”

There we have it. The decision to impose one particular model on European states is a political choice, just as the Government’s decision to re-privatise the east coast main line was ideologically driven.

[Jacob Rees-Mogg]

Will the hon. Lady give way?

[Lilian Greenwood]

I will make a little progress.

Countries should be free to choose the models that best suit national and local needs. We had just such a need in 2009, after two franchisees walked away from the east coast main line. As a not-for-dividend operator, East Coast has gone from strength to strength. Overall passenger satisfaction has risen and the operator has won a national award for how it manages disruptions to services, with a 12% improvement in satisfaction ratings in the past year. It has provided a public sector comparator at a time when the Government’s franchising policy has collapsed, at a cost to the taxpayer of more than £55 million. By the end of this year, it will have returned £800 million to the taxpayer and invested profits in the service.

The not-for-dividend east coast main line is working, and with a five-year business plan in place the operator could deliver more, if it had the Government’s backing. However, by prioritising the privatisation of the east coast main line, the Government seem to be saying that the service works in practice, but not in theory. We need to proceed on the basis of the best evidence available and build on success stories such as the east coast main line, Merseyrail and London Overground.

I am sure that the Minister will have listened closely to Transport for London’s concerns about the fourth railway package, particularly the definition of a competent authority. Interpreted literally, the definition of an authority that serves

“the transport needs of an urban agglomeration or a rural district”

could force TfL to divest itself of some services at a time when it is looking to take on additional responsibilities. Perhaps the Minister could offer reassurances on this issue, which may impact on other bodies, including the proposed rail in the north executive. The devolution agenda must not be put at risk by these proposals.

[Jeremy Corbyn]

My hon. Friend will be aware of the current consultation on changing the rail network in London by extending the London Overground network to take in some of the suburban services run by other agencies. I am unclear about the effect that this European proposal will have on that. London Overground, after all, is one of the most popular and successful rail networks in the country and its expansion would certainly be welcomed by many people in London.

[Lilian Greenwood]

I thank my hon. Friend, and that is the precise concern that I am raising on behalf of TfL. As he says, London Overground is a successful operation and we would not want to see this package stand in the way of TfL continuing to develop services for the benefit of passengers and taxpayers.

There are a number of concerns, therefore, about a number of points in the fourth railway package. We need to reach a deal that works for the British railway industry—a deal that removes the uncertainty over safety and devolution, while allowing us the option of replicating the success of the east coast main line, which should not be re-privatised, as the Government plan. The fourth railway package is not there yet, and that is why we cannot support this motion.

[Several hon. Members]

rose—

Oral Answers to Questions

Lilian Greenwood Excerpts

Thursday 17th January 2013 Commons Chamber

[Mr McLoughlin]

I have met with my hon. Friend to discuss the service in his constituency and in the rest of Kent. He has made a number of points that I will be discussing with Network Rail in due course.

[Lilian Greenwood (Nottingham South) (Lab)]

Very straightforward: will the Secretary of State categorically rule out “super peak” fares? A simple answer will do: yes or no.

[Mr McLoughlin]

As I said, the Department is undertaking a review of fares. That is not to look at a way of making fares more expensive, but to ensure that people understand how fares are delivered.

Local Bus Market

Lilian Greenwood Excerpts

Thursday 10th January 2013 Westminster Hall

[Lilian Greenwood (Nottingham South) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate the members and staff of the Select Committee on Transport on securing this debate and on producing such a reasoned and timely report. I was especially pleased to listen to my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), who has chaired the Committee expertly throughout the inquiry and speaks with great authority in support of buses, which are the Cinderella of public transport and, as she says, provide a lifeline for millions of people across the country.

The Transport Committee’s report provides a much-needed critical analysis of the Competition Commission’s investigation. The commission shone a light on the bus industry, exposing serious market distortions and raising helpful suggestions for reform, but the investigation itself inspires questions about the proper balance between competition and regulation and about the future structure of the bus industry. The commission’s report, notwithstanding its considerable strengths, is limited by an assumption that direct, head-to-head competition is beneficial to passengers. Of course, the commission was only following its remit, but perhaps that remit could have been applied a little more widely.

The reality is that sustainable competition on the same route is rare, and most areas settle into a pattern of single-operator dominance, occasionally interrupted by short, intense and disruptive clashes between rival companies. The roots of the problem can be dated to the deregulation regime established by the Transport Act 1985. The then Government’s ambition for widespread competition proved unsustainable. The new market did not achieve balance, as deregulation’s architects had hoped. After the frenzied bus wars of the 1980s and 1990s, a new pattern of dominant operators emerged.

There are exceptions, of course. Thanks to strong campaigning, London was protected from the 1985 Act and was therefore able to build a planned, integrated network, with competitive tendering for routes. With that provision, combined with other factors unique to the capital, bus use has risen dramatically, in contrast to the national decline in patronage. In 1985, one in five British bus journeys took place in London; today, the figure is one in two. As my hon. Friend the Member for Blackley and Broughton (Graham Stringer) has said, that raises clear questions about how other towns and cities can make similar progress.

Where municipal operators have survived, they have proved that they can help to buck the national trend. Nottingham City Transport, which serves the city that I am proud to represent, was named operator of the year for 2012, and strong leadership from the local authority has helped to grow the local bus market. Some challenges are still being overcome, such as establishing an integrated multi-operator smartcard—my hon. Friend the Member for Bolton West (Julie Hilling) explained clearly why products such as the Oyster card, which Londoners probably now take for granted, are so valuable to passengers—but the point has been proved in Nottingham: determined local vision can help to reverse the wider pattern of decline.

For most passengers a lack of quality and choice—or geographic market segregation—is the norm. Some companies have, in effect, established private monopolies, with unfeasible hurdles for smaller competitors seeking to enter the market and without challenge from the biggest operators, which now account for 69% of the market. That is not a market solution; it is a model that has failed. My hon. Friends the Members for Bolton West and for Blackley and Broughton both described the experience in north Manchester, which will be familiar to many.

It is hard to disagree with the Campaign for Better Transport, which states that the Competition Commission’s focus on direct competition prevented it from fully considering alternatives. The Select Committee’s attention to the remaining barriers to quality contracts was welcome, and Labour is working to remove the uncertainty that is holding back some transport authorities. A number of witnesses said that they would like quality contract schemes to be introduced, but there remains, as the report discusses, the problem of who would be first across the line. We would offer genuine support for authorities seeking to develop quality contracts, just as we would for those developing voluntary and statutory partnership agreements.

As the hon. Member for Milton Keynes South (Iain Stewart) said, there is no one-size-fits-all solution. Each local market is different, and local authorities must have a genuine choice about what is right for their area. Specifically, Labour would introduce bus deregulation exemption zones as a mechanism to transfer the risk from local to national Government, giving transport authorities the certainty that they need to commit to quality contracts where that is right for their residents.

Far from seeking to remove the remaining barriers to tendering, the Government’s proposed changes to funding criteria will raise the hurdle still higher. Authorities that introduce a quality contract scheme will be disqualified from receiving better bus area funding. Transport authorities that want to develop future schemes will have the odds weighted against them. I hope that the Minister, who, when in opposition, put on record his support for quality contracts, will withdraw that proposal. Indeed, when the Local Transport Act 2008 was considered in Committee, he speculated that

“a future Government, perhaps of a different complexion,”

which was

“unsympathetic to the idea of quality contracts”

could

“seek to kill the measure slowly”.––[Official Report, Local Transport Bill Public Bill Committee, 29 April 2008; c. 205-6.]

That is precisely what is happening under this Government.

Although the withholding of better bus area funding is a proposal at this stage, it is undeniable that the threat is inhibiting the development of quality contracts. As my hon. Friend the Member for Liverpool, Riverside described, that sends a strong signal to local authorities not to go down that route. When the South Yorkshire integrated transport authority decided not to pursue a quality contract scheme, it was made clear that the Government’s stance on funding had been a major factor in the decision.

I know that the Minister will be studying carefully the responses to his consultation. I ask that he also listens to the recommendations of the Transport Committee and withdraws the proposals that punitively target authorities that choose to pursue tendering. Of course, the proposal to stack the deck against quality contracts comes after a round of swingeing cuts to local transport, including buses. Overall funding for local transport has been cut by 28% and the bus service operators’ grant has been cut by 20%.

Early predictions, optimistically repeated by the Government, that cuts of this magnitude could be absorbed without a substantial rise in fares have been discredited. Fares rose by more than double the rate of inflation last year, and supported bus services, which are often relied on by some of the most vulnerable members of society, were cut by 9.3% outside London. As Passenger Transport stated last week,

“the bus industry is in danger of being forced into another great cycle of decline, in which cost rises, funding cuts and consequent fare increases each give another vicious downward twist to patronage levels.”

Passenger Focus has collected a great deal of evidence on the human cost of the cuts. In some areas, buses have been reduced to mere skeleton services. One passenger told researchers:

“You feel imprisoned in your local area.”

Indeed, the Campaign for Better Transport identified one estate—Burbank in Hartlepool—where bus services have been cut completely. It does not have to be this way. The Government should be striving to achieve something more than the slow subsidised decline of bus services outside London. Despite failings in local markets, buses are still the most used mode of public transport. Travelling across the country and Europe, I have seen the enormous potential that buses hold. But Britain has to grasp the challenge and not see buses as an easy target for cuts. That is why Labour has set out which cuts we would reluctantly support, to protect public transport services.

Thanks to the work of Greener Journeys and others, we know more now than ever before about the economic and social benefits of buses. Jobs and growth and tackling social exclusion are two sides of the same coin. That is why the present reduction in funding is cutting so acutely. Democratically accountable local authorities are best placed to provide leadership, deliver service improvements and promote integration with other modes, including rail. This is what communities need. Real, accountable devolution of spending and decision making can help address market failings when they occur, and Labour is committed to devolution and protecting bus services.

With your permission, Mr Walker, I would like to close by paying tribute to the work of my hon. Friend the Member for Barrow and Furness (John Woodcock), who, unfortunately, has had to step down from his role in the shadow transport team following a serious injury. I am sure that all hon. Members will wish him a full and speedy recovery.

--- Later in debate ---

[Norman Baker]

It is true that those no longer travelling would by definition be excluded, because they would not have been on the bus to be subject to questions. I suppose the same applies to rail services. However, if bus services were being abandoned because of poor quality, I would expect that to be highlighted by the people still on the bus, but who have not yet abandoned it, so I do not think that the hon. Gentleman’s point is necessarily true, if I may say so. It might be that bus passengers are no longer on the bus because they have decided to travel by a different mode—car or train—or because the bus is no longer there in the circumstances that suit their individual needs.

The second deal was Bus for Jobs, which helps jobseekers get back to work by offering free travel for the whole of this month of January. Those are exactly the sort of leadership examples that should be demonstrated by bus companies. I will continue to work with the companies, and cajole them if necessary, to ensure that they continue to put passengers’ long-term interests directly at the heart of their businesses. Of course it is in their commercial interest to do so, and therefore they ought to be doing that for themselves, as many of them are.

[Lilian Greenwood]

I have listened with great interest to what the Minister said about BUSFORUS and Bus for Jobs. Can he set out his assessment of how well those initiatives by the bus industry are meeting the needs of young and unemployed people, in particular given that Bus for Jobs only lasts for a single month?

[Norman Baker]

The Bus for Jobs initiative is being assessed by the bus companies, and I spoke about it to a leading member of the bus industry yesterday. I will be keeping in touch with the industry, to see what the initial response is and whether there is a case for extending the initiative. That would be a matter for the bus companies, but we want to see the response first—us from the Government point of view and them from a commercial point of view. If the initiative is successful in persuading people who have not considered the bus before to take the bus and then to stay with the bus, it might be a sensible commercial proposition for the bus companies.

However, I have made no secret of my belief that the bus companies need to do more to help young people, and that has formed a key part of my speech on major set-piece occasions when I have addressed the bus industry. The industry has responded sensibly and well to that challenge, and the companies know that I will continue to engage with them formally and informally. The subject is always on the agenda of the Bus Partnership Forum, which I hold with the industry six-monthly and in which young people also participate.

Overall, commercial services, which represent about 80% of bus mileage, are holding up quite well, which is good news that we should all welcome. I understand the challenges of being in opposition, but I encourage Opposition Members not to talk down the bus industry, which is easy to do—I have been in opposition myself. They should recognise what is going well, as well as not so well. Commercial services are holding up, and we should take some comfort from that.

Although there is good news on that front, I recognise—I am the first to do so—that in some areas of the country the garden is not quite so rosy. Recent statistics show that the supported service network—only 20% of overall bus mileage, but important for many people—is not as healthy as the commercial sector. The picture is not uniform, as it inevitably will not be in an era of localism, such as the one we are moving into, because the decisions are made locally by elected councillors. Some councils, such as East Riding, have prioritised bus services in setting their budgets, while others, such as Surrey, have reduced their spending but have done so creatively and carefully so as not to translate cuts into significant service reductions.

Other councils, I am sorry to say, have made what appear to be arbitrary and swingeing cuts that fail to consider properly the needs of their local residents—I refer to North Yorkshire and Cambridgeshire—which can lead to people in isolated communities, particularly in rural locations, having restricted access to education, training, work, health care and other important services. We have heard about how those who use the bus tend to be at either end of the age spectrum, so young people and elderly people are especially affected if such cuts are made, because they rely more on public transport to get around.

[Norman Baker]

The allocation of money to local councils and their predominant concerns are matters not for the Department for Transport, but for the Department for Communities and Local Government, which sets the allocation for local council funds. We do not control that, but allocate our own funds, which we are increasing through the green bus fund and the better bus areas and community transport. That is what our Department has been doing, but I am unable to answer the hon. Lady directly, because that is not my Department’s responsibility. I do not believe, however, that there is a direct correlation between the reductions in local funding from the DCLG and the cuts in bus funding.

Indeed, what is reflected—quite properly—is the exercise of local discretion. Some councils have decided to protect bus services and to make them a high priority, while others have not sought to do so, which is entirely up to them, because they consist of elected local people. I certainly encourage individual constituents in those areas where bus cuts have been significant to ask their local councils and councillors why they have decided to prioritise bus cuts, as opposed to anything else, while perhaps the councils next door have not done so. To be fair, I referred to non-Labour councils, North Yorkshire and Cambridgeshire, but I can also pick out Darlington, Stoke and such councils, which have reduced their budgets. Things are mixed throughout the country.

Overall, however, bus mileage remains broadly flat, with commercial services in many cases picking up the slack as bus companies continue to look for opportunities to grow their local markets.

[Lilian Greenwood]

May I take the Minister back to his response to my hon. Friend the Member for Bolton West? The Government are trying to have it both ways, taking credit for progress in the bus industry while blaming local authorities for cuts to services. He must take responsibility for inflicting front-loaded cuts, disproportionately hitting less affluent authorities and forcing councillors to make impossible decisions. The Government are using localism as a way to hide behind the effect of their own decisions.

[Norman Baker]

That is not fair, and I have already listed some of the extra money that the Department for Transport has made available to help buses. In a moment, I will go on to what we are doing. Moreover, many councils are not making cuts, which demonstrates that there is flexibility. Some have chosen not to make cuts, although there have been reductions across the patch, not only in local councils but in Departments. I do not wish to rehearse the Budget position, but there was a general recognition that reductions in Government expenditure were necessary. Indeed, the hon. Lady’s party was also committed to a large swathe of cuts had it been returned to power in 2010. In the Department for Transport, we are doing what we can to protect bus services, and I hope that local councils have the same objective—some appear to be discharging it well, others less so.

We are doing our bit to help, and we remain committed to supporting local bus markets through direct operator subsidy, through DCLG funding of local government and through our targeted investment packages. That includes £70 million on better bus areas, which was a bolt out of the blue and a windfall that the bus industry was not expecting, with more to come for those places that successfully apply for full devolution of bus subsidy. That also includes around £200 million in capital funding for major projects in Manchester, Rochdale, Bristol and elsewhere, and many of the 96 projects made possible by the £600 million local sustainable transport fund, which is a brand-new Government initiative and provides a major increase in spending on sustainable transport compared with that of the previous Administration.

Many of the 96 projects include improvements related to bus services. In addition, I recently announced a further £20 million for a new, fourth round of the green bus fund, on top of the three previous rounds worth £75 million. Many of those buses will be built in Britain, helping British manufacturing and jobs as well reducing our carbon impact from buses. Such funding, therefore, is not insubstantial and not a bad deal for the bus industry. It comes in spite of the tough financial climate and the need to reduce the structural deficit.

As I have made clear before, however, with such significant amounts of public expenditure invested in the bus market, it was only right for us to consider whether it has been delivering the best service for bus passengers and best value for the taxpayer. That is why we are engaged in a series of reforms to facilitate competition and to increase local accountability for spending on bus services. We are reforming how bus services are subsidised, providing guidance on ticketing and tendering for contracts, and making regulatory changes to encourage more on-the-road competition where the market supports it.

On bus subsidy and the reform of BSOG, I am considering the response to last year’s consultation and will have final proposals before Easter. That will include the treatment of areas where quality contract schemes are planned, which is clearly and understandably of interest to the Committee. Guidance for local authorities that wish to apply for better bus area status will be out later this month.

[Norman Baker]

That issue was raised at the Select Committee, to which I gave evidence, and it has been raised again today. Local councils want to understand the relationship between better bus areas and quality contracts; that is fully understood. I will not give a definitive answer today. The matter has been subject to consultation, as the hon. Lady knows. The responses to the consultation are being carefully considered, and I will discuss those matters with my ministerial colleagues in the Department for Transport, but I accept the need for clarity, and I intend to provide that so that everyone knows where they stand.

I am pleased to note that, by and large, the Committee’s key findings and recommendations complement and support the coalition Government’s policies that were set out last year in “Green Light for Better Buses”. I have a lot of time for the Chair of the Committee, but I thought she was uncharacteristically unfair when she said that there needed to be more to our policy than funding cuts. That was a gross distortion, and failed to note the direction of travel that is clearly set out in “Green Light for Better Buses” and our proposed changes to funding arrangements. That constitutes a policy that we believe will help to deliver better arrangements for our buses. Combined with our response to the Competition Commission, it sets out a clear policy. The hon. Lady may disagree with it, but it is a clear policy. In fact, the Committee’s findings suggest that she does not disagree with much of it.

We have made it clear that partnership is a highly effective way of delivering quality, affordable bus services, and I welcome the hon. Lady’s endorsement of partnerships as a good way forward. Our better bus area proposals are indicative of that. The purpose of such areas is to ensure that councils and operators work together, because that is more successful than a council wanting to drive forward policies, perhaps for good reasons, when the bus industry is not interested. Similarly, if the bus industry has good ideas, but a council is unresponsive, those ideas will not be delivered. The proposal to financially incentivise two groups of people to come together is entirely sensible, and can only work to the benefit of the public.

We will support the integration of services when that is in the public interest, and we will encourage the roll-out of smart, multi-operator ticketing. We will monitor local authorities as they develop their partnership agreements, liaising with the Office of Fair Trading when necessary—the Chair of the Committee made this point—to ensure that competition law does not become an insurmountable barrier to sensible service improvements.

[Lilian Greenwood]

Does the Minister share my concern that a false distinction is sometimes made between quality contracts and partnerships? We all want effective partnerships, and the Labour Government legislated to promote them. When I was in Copenhagen, I saw how tendering and partnerships between operators and transport authorities do not just co-exist; they are essential to policy success. It is artificial and misleading to present them as two completely different things. They can work together, and funding should follow.

[Norman Baker]

The hon. Lady is tempting me to respond to the consultation exercise, which I will do with clarity in due course. A point about quality contracts that I made to the Select Committee in response to the hon. Member for Blackley and Broughton (Graham Stringer) was that they are there in law:

“They are there as part of the Local Transport Act 2008”—

I was a member of the Committee—

“They remain on the statute book.”

There is no intention of removing them from the statute book and I expect the law to be respected by all parties. I would take a dim view of any bus company or anyone else who sought to undermine the law of the land as it is on the statute book.

On resources for traffic commissioners, to which the Committee referred, the coalition Government has already given a commitment to review their role in the next financial year as part of a wider review of non-departmental public bodies. It is sensible to include a look at their public service vehicle work as part of that review.

I shall pick up individual points that hon. Members have raised this afternoon. The Chair of the Transport Committee referred to multi-operator ticketing and whether it would require new legislation. We have made it clear that we strongly support multi-operator ticketing. We believe it is important to deliver the sorts of outcomes that passengers want, and to avoid the situation to which the hon. Member for Bolton West (Julie Hilling) referred of passengers buying a ticket and then having to buy a further ticket to get home. That cannot be a sensible outcome for passengers, and cannot help public transport generally. We do not want that.

[Mr Peter Bone in the Chair]

We have made it clear to bus companies that we want multi-operator ticketing. We have also made it clear that we reserve the right to introduce legislation if that does not occur. We hope that it will occur—there is some evidence of that—not least because in Oxford where it is occurring, the bus companies have discovered that it is in their financial interest. I am confident that the bus industry has bought the idea of multi-operator ticketing, and that it will become increasingly common throughout the country. However, we reserve the right to take that forward in legislation if necessary.

We also believe that transparency is important. I welcome any figures that can be produced to help passengers and to give a wider perspective of how the industry is performing, and indeed how the Government is performing. Anyone who knows about my role in Parliament will know that I have been hugely committed to transparency in all sorts of areas throughout my time here. We must avoid placing huge extra burdens on industry for not much return, so we cannot require endless figures to be produced if they are of little value, but in principle we are certainly open to any suggestions for extra information that is genuinely valuable. If the Committee has particular issues in mind, I will be happy to consider them.

My hon. Friend the Member for Milton Keynes South (Iain Stewart) referred to door-to-door journeys. He called them end-to-end journeys. I have discussed with the rail and bus industry how to describe them, but I will not bore him with the nuances of that conversation. Suffice it to say that the general view was that we should call them door-to-door journeys, and that is what the Department is doing. It will shortly produce information on such journeys to aid the process. It will cover the bus and rail industries, and ensure that different modes of transport are joined up. In best practice they are, but sometimes they are not.

My hon. Friend was right to refer to the role of smart ticketing, which is key to delivering door-to-door journeys properly. He said that it is necessary for people to be confident that they will get the cheapest fare when they use a new ticket-purchasing method for their journey. I absolutely share that view. For the railways it is a key objective of the fare and ticketing review that people buy the ticket that is appropriate for their journey, and do not pay over the odds unnecessarily. Obtaining the best possible deal for rail and bus passengers, which also involves transparency, is to the fore of the Government’s thinking.

I always listen with interest to the hon. Member for Blackley and Broughton when he talks about transport, because for many years he has demonstrated a genuine commitment and great knowledge. He referred to London’s upside, but he will recognise that it also has its downside. There are pros and cons with the London arrangement, and I am familiar with both. In any assessment of what is best for one area it would be wise to consider the upside and downside in London when considering arrangements for buses.

The hon. Gentleman referred to concessionary fares. There will be no change in the arrangements during this Parliament. That is what the coalition Government has said, but what individual parties do in their manifestos will be a matter for them as we approach the next general election.

The hon. Member for Bolton West raised the interesting matter of—I suppose, though she did not frame it in this way—the purpose of bus travel. What is the objective that we, or local councils, are seeking to deliver and what are bus operators delivering by running buses? There are different reasons, it seems to me, why buses are run. One is to provide a regular means of transport at a high frequency along corridors such as Oxford road, which is effective, or can be effective, in securing modal shift from the motor car, and thereby, in theory, easing congestion, reducing carbon emissions, and providing a viable public transport alternative. As we have seen in London and elsewhere, there is no question but that when we have frequent services and people turn up without having to think about the timetable, it drives passenger numbers up, creating a virtuous circle where buses become more attractive and more buses can be run. We have that in many parts of our country—not all, but in many parts—including much of London. However, it could be argued—this is one of the downsides of London, I might say—that sometimes, and it is my view, there is an over-provision of buses, which run significantly empty on occasions, back to back all the way along the road. That is a particular problem on Oxford street, as opposed to Oxford road.

It seems to me that the second purpose of a bus is to provide a social function and a necessary connection between those who are without private transport but need a bus to get to a school, a hospital, or whatever it happens to be. The hon. Member for Bolton West suggested that the answer was route-bundling, which is a perfectly legitimate philosophical view. However, I would say that route-bundling may satisfy her need for buses that go round the houses, but what is the consequence for Oxford road, or buses along high-frequency corridors? I am not sure that we can have both—perhaps we can. If we reduce high-frequency corridors to provide buses round the houses, that may meet more social needs, but it may secure less modal shift from road. I raise that philosophically to point out that such things are not perhaps as straightforward as they are sometimes presented.

--- Later in debate ---

[Norman Baker]

Let me muse on that matter for a moment—until I become inspired—and deal with the points made by the hon. Member for Nottingham South as part of my closing remarks. I have noted with interest her support—increased support, I might say—for quality contracts, and her proposal for bus deregulation exemption zones. The Opposition is of course entitled to produce its own policy and I look forward, with interest, to that evolving. Therefore, perhaps it would be churlish of me to point out that for 13 years, some of us were making such arguments and they were batted back and we were told that what we were proposing, which may not be terribly different from what she is now suggesting, was a load of old nonsense. It would, however, be churlish to make that point.

I do not think that it is true to say we are in a great cycle of decline. I say to the Opposition that there are issues about the bus industry that I have been happy to accept, including what some councils have done in terms of bus cuts and the real impact that has on individuals in those areas. However, I encourage her not to exaggerate the position. That “great cycle of decline”, as I mentioned yesterday, shows an increase in passenger journeys of 0.6% over the last 12 months. Even if we take out London, a decline of only 0.8% is shown. It is not a great cycle of decline, and we must not talk down the bus industry and the opportunities for users.

[Lilian Greenwood]

I want to clarify that they were not my words but those of Passenger Transport. Just this week, it expressed its concern about the impact of a number of things, including cost rises and funding cuts. It is not just me who has real concern about the future of the bus industry—that view is widely held—and I just wish the Minister would respond to it.

[Norman Baker]

I have responded to it, and I have indicated that we are not into a great cycle of decline. I indicated that commercial services are holding up very well. The bus industry is responding with ingenuity and innovation. It is taking steps to take over some of the services that have been tendered and that were run by councils. Indeed, it is beginning to grow the market in places. The initiatives in Manchester and Sheffield, where fares have been cut, shows us a way to grow the market. I do not accept that we are into a great cycle of decline; nor do I think that it is helpful for anyone, whether the Opposition, Passenger Focus or anyone else—whoever the hon. Lady happens to be referring to —to talk about these matters in such apocalyptic terms.

The hon. Lady said that buses had been cut completely in Hartlepool and that it did not have to be that way. No, it does not. She should perhaps ask Hartlepool council why things are that way there, because they are not that way in other councils.

The hon. Lady said that local authorities are best placed to provide leadership, and we entirely agree, which is why we are pursuing a policy of localism. However, I hope she will accept, as we do, that that will produce a non-uniform picture across the country, as local authorities behave in different ways as a result of the freedom that they have been given.

The hon. Lady says that Labour is committed to devolution, and I am delighted to hear that, because I did not notice much of it in the 13 years of the previous Government. However, if she is now going along with our localism proposals, that is very welcome. That sends a message that there will, I hope, be no reversal of the localism that the Government has pursued, in the unlikely event that Labour forms the next Government. That will give local authorities some comfort that the direction of travel will not be changed.

On deregistration, the hon. Member for Blackley and Broughton will recognise that primary legislation would be required and is difficult to achieve slots for. Alongside every other Department, we have to make a case to be given spare time to pursue the matter, so we are not looking to legislate. We are exploring voluntary options, but, as with all things, we reserve the right to introduce legislation if necessary. I very much hope that it will not be, and we are certainly getting quite a long way down the track on a whole range of issues by taking a constructive, engaging, voluntary approach with local councils and the bus industry.

Let me end on a note of agreement. I share the views of the hon. Member for Nottingham South about the hon. Member for Barrow and Furness (John Woodcock). I very much understand why he has taken his decision, and we all wish him a full recovery and a speedy return to the Front Bench.