Sub-national Transport Body (Transport for the North) Regulations 2017

Lord Beecham Excerpts

Monday 18th December 2017 Lords Chamber

[Lord Beith (LD)]

My Lords, I welcome the authority that is being given to Transport for the North by these regulations and, indeed, welcome the work that Transport for the North has done so far, even without the status that the regulations give it. It is my hope that the strategic planning that it does will lead to some of its advice being taken by the department and some correction of a very serious imbalance to which other noble Lords have referred in levels of transport infrastructure investment in the north as compared with the south-east of England. That area has recognisable problems that require some fairly expensive solutions—but not at the expense of ensuring that we have the kind of transport system that encourages prosperity, business and innovation in the north of England.

When I say the north of England, I think particularly of the north of the north, not simply of the Hull-Manchester-Leeds-Liverpool corridor, important though that also is. As I have done previously, I want to encourage Transport for the North—given the powers that it now has—to address some of the issues that are important to us in the far north. That includes, of course, the franchise problems to which the noble Lord, Lord Liddle, referred. I say “problems”, but the reality is that every single commercial operator that has taken on the east coast franchise has been unable to deliver the terms of the contract and has left it—in the most recent case—on terms that are extraordinarily favourable to the contractor. In earlier cases, the terms were not so favourable to the contractor. This is the most important transport link for the north-east of England, as well as Scotland, and that issue will clearly require further attention.

Among the issues that I hope Transport for the North will be able to give the department strong advice on are issues which it has worked on for some time but which we want to see come to fruition. These include the extension of the trans-Pennine route through to Edinburgh, up the east coast main line; the reopening of services such as the Ashington rail link; and the development of commuter services into Newcastle, such as the one from Chathill, which is a small, Cinderella service. Newcastle has its own requirements for transporting people into the city centre and problems with excessive use of cars for that purpose. There is a lot of work to be done and I am glad that Transport for the North has been given the authority to get on with it.

[Lord Beecham (Lab)]

My Lords, I declare an interest as a resident of Newcastle and a member of the local authority. I also have the misfortune of being a regular traveller on Virgin Trains East Coast. I had the pleasure of sitting in a train outside Spalding for four hours recently while the train ahead of us had broken down. The relief train that was sent to deal with the problem also broke down. That is only one of the more dramatic examples of Virgin’s failure. As my noble friend Lord Liddle and the noble Lord, Lord Beith, have referred to, Virgin is now withdrawing, five to six years ahead of the date by which the contract should have ended. It is known that it had pledged £3.3 billion. I do not know whether the Minister is in a position to say how much it has benefited—or will benefit—from its decision to withdraw. Looking to the future, I join other noble Lords in welcoming the new organisation. Will it have a role in deciding—along with others, of course, because the train service runs from Scotland down to London—who will obtain the next franchise and on what terms? That is really important.

I mentioned Scotland. The north does not only look south; it also looks north. We need better road connections. A certain amount was done shortly before the general election, which was some time ago. That no doubt assisted on a political level, but it has not yet provided the improvements required. I trust that TfN will have the opportunity to press the Government on that.

Another aspect of the relationship with Scotland, to which I have referred from time to time in your Lordships’ House, is the question that still hangs over the future of air passenger duty. It is thought that, given the opportunity, Scotland may well exercise its right to abandon that duty. That would have a very adverse effect, certainly on Newcastle Airport and, I suspect, on other airports across the northern region. I have yet to get an indication from the Government of what their attitude would be if Scotland exercised its apparent right to abandon the duty. I would hope that, in the interests of the whole of the north, they would be able to follow that decision and apply it to the north of England. It may be that the Government would wish to see the whole thing gone, nationally. One way or the other, it would be extremely disadvantageous to the north if Scotland was able to do away with APD and the north was stuck with it. I am sure that TfN will have views about that, and I hope the Minister and her colleagues will take note of them, should the situation arise.

[Lord Rosser (Lab)]

I thank the Minister for her explanation of the purpose and content of these regulations. I note that the Chamber is fairly full, but I am not sure it is because noble Lords have come to listen to either myself or, I am afraid, the Minister; I suspect that they are here for the next item.

Transport for the North was established in 2014 as a partnership of northern authorities and local enterprise partnerships to formalise co-operation on transport issues in the north, working with Highways England, Network Rail, HS2 Ltd and the Department for Transport. TfN will, under these regulations, become the first subnational transport body in England. Transport for the North’s responsibility is to set out the requirements of the transport network through a strategic transport plan for the north, and it has a remit to focus on movement between cities and key economic centres to support a more productive and integrated northern economy. Indeed, the Northern Powerhouse Independent Economic Review found that, if the north receives the right level of investment to improve connectivity across the region, it will create over 850,000 jobs and add almost £100 billion gross value added to the economy by 2050. Transport for the North also has a role to play in supporting local and national government to ensure that local investment in public transport and national transport infrastructure projects form a coherent investment programme.

We support putting Transport for the North on a statutory footing from April next year, but we doubt whether what is now being put forward is adequate in addressing underinvestment and the significant disparities in transport spending between the north and the south. Following the debacle over the cancellation or postponement of rail electrification on the trans-Pennine route, the Secretary of State asserted that the future of transport in the north was in the hands of the north because he would give it the powers necessary to address its own transport needs. What the Government are now proposing for Transport for the North would not appear to deliver what they said would be delivered.

All the regions of the north combined receive less in transport investment than London, despite the north having twice the population. If the Government will not address poor transport infrastructure in the region, they should at least give the regions of the north the power to do so themselves. However, the regulations we are discussing today would appear to give the north neither the necessary investment nor the necessary power in this area. It would appear that, instead of receiving “client status”, Transport for the North will instead be a “statutory influencer”. Although the Secretary of State will have to have regard to the views and recommendations of Transport for the North and its statutory transport strategy, it will, as I understand it, be a matter for him to decide what improvements to the transport infrastructure will get the go-ahead, and when, since Transport for the North has no decision-making powers in that regard and neither will it have either its own, or access to, financial resources to be able to finance and deliver significant infrastructure schemes.

There is a real danger that Transport for the North will spend a lot of time, enthusiasm and energy drawing up a strong economic case for significant transport infrastructure improvements, with the support and backing of local authorities, business and community organisations and representatives across the region, and then find that the Secretary of State just kicks them into the long grass, perhaps because this Secretary of State, the most politically partisan we have had for a long time, is reluctant to give money or additional decision-making powers to areas that do not share his political outlook—as opposed to effectively giving money to failing east coast main line franchise operators.

Perhaps that is why he has not delivered on his earlier statements that the future of transport in the north was in the north’s hands and that he would give it the powers necessary to address its own transport needs. If Transport for the North does not get the support of the Secretary of State for implementing and overseeing the delivery of its transport recommendations, it will lead to frustration all round rather than progress, since people have had enough of talking shops and want to see imaginative and well-thought-through plans see the light of day.

Could the Minister say what amount of money is available for implementing and delivering Transport for the North’s strategic transport plan—and whether, if TfN had already been in existence as a statutory body and had included the electrification of the trans-Pennine route in its strategic plan, the Secretary of State could nevertheless have disregarded the plan and not agreed to electrification of the route? Hence our view, if I am correct, that Transport for the North does not have any great power; the power remains firmly in the grip of the Secretary of State.

Could the Minister also say what it means in reality for the Secretary of State to “have regard to” TfN’s statutory transport strategy when developing national transport strategies and plans? How does the Secretary of State prove that he has had regard to that strategy—and, alternatively, how does anyone prove that he has not? Would it be open to Transport for the North to take legal proceedings against the Secretary of State if it considered that he had not had regard to its transport strategy—and, if so, will TfN have the statutory power and the financial resources to initiate such legal proceedings?

As I understand it, Transport for the North will also have a role in the co-ordination of regional transport activities, such as, for example, smart ticketing and co-management of the TransPennine Express and northern rail franchises through the acquisition of Rail North Ltd. What exactly will that co-management involve as far as Transport for the North is concerned, what exactly will co-ordination of regional transport activities involve, and what statutory powers is Transport for the North being given in respect of each role?

What will be Transport for the North’s budget for its administration over each of the first three years from 1 April 2018, how many staff will it employ, how much will it receive in grants—the Minister mentioned £260 million—and from what sources and what purposes over that same three-year period? In how many years’ time do the Government anticipate reviewing the role of Transport for the North as a statutory body, including the effectiveness with which it is able to carry out its role under the powers that it is being given through this instrument, and whether there is a need to either reduce or increase the powers and the role that Transport for the North is being given under these regulations?

I believe that the Minister, when she introduced the regulations, referred to Transport for the North achieving “transformational change”. What goals are the Government seeking to achieve over the next 10 years that will represent the transformational change referred to by the Minister?

On the resources made available to Transport for the North, I repeat that I think the Minister mentioned £260 million. To most of us that sounds like an awful lot of money, but can the Minister say how that compares with the cost of Crossrail for London, for example, so that we can see how significant a part of the cost of Crossrail that £260 million represents?

We hope that Transport for the North will be able to exert a positive influence on transport in the north and that it does not become a largely toothless, penniless, powerless talking shop, drawing up persuasive and compelling strategic plans which are then largely ignored by the Secretary of State.

[Baroness Sugg]

My Lords, I thank all noble Lords for their contributions and for their broad support for this measure. I will do my best to answer as many of the points raised as I can but, if I do not manage to answer them all, I will write to noble Lords.

The noble Lord, Lord Shipley, asked how the change to constituent authorities will work. It would require a further affirmative statutory instrument once it had been proposed and approved by the existing members of Transport for the North.

There was some discussion about the powers for Transport for the North. These powers have been agreed after extensive engagement with TfN and the northern leaders over the last 12 months. Both the Government and TfN agree that the role outlined in this statutory instrument allows TfN to build its capability and capacity over time, and we think that it strikes the right balance between national and regional priorities. Of course, Transport for the North can seek approval from the Secretary of State for additional functions and take on more responsibility to improve transport planning or make provision to enhance economic development in the area.

The noble Lords, Lord Shipley, Lord Liddle and Lord Berkeley, raised the question of regional disparity. This Government are reversing decades of underinvestment in the north, with the biggest investment for a generation. Including all projects, the Government are spending more per head on transport in the north-west than they are in the south-east. This is backed up by the recent publication of the National Infrastructure and Construction Pipeline by the Infrastructure and Projects Authority, which shows that per head spending in the north is expected to be £10 higher than in the south. Indeed, just today we have published our rebalancing toolkit, which is designed to help authors of strategic cases assess how a programme fits with the objective of spreading growth across the country.

On funding, raised by probably every noble Lord, the initial funding settlement of £260 million reflects TfN’s initial role. There are also the resources needed to deliver the programme set out in the Northern Transport Strategy. I am afraid that I am not able to give a specific figure as requested by the noble Lord, Lord Liddle. TfN is aiming to publish its draft strategic transport plan in the new year, and a 12-week consultation will follow. It should be finalised in the summer of 2018 and, from there, we will look forward to working with TfN, as it becomes a statutory body, on how best to move that forward. We are already spending £13 billion on transport in the north and, as I said, we must wait to see what TfN’s strategy comes up with.

On the question of who makes the decisions, TfN will, through its strategic transport plan, make decisions on the transport priorities for the north. It will provide the evidence to make the case but Ministers here, who are ultimately accountable to Parliament, will make the funding decision, so that will sit with the Secretary of State.

The noble Lord, Lord Beecham, asked about future franchises. TfN will be a statutory consultee on all future franchises.

The noble Lord, Lord Liddle, mentioned Cumbria. I understand that the LEP there is developing a strategic outline business case and we look forward to considering it. We are working with the LEP and the county council to help them develop that business case.

The noble Lord, Lord Berkeley, asked about Manchester rail stations. The Secretary of State has recently written to the Mayor of Greater Manchester to propose a further discussion on how we best answer that.

We see the establishment of Transport for the North as a significant step for the north and for the country. It will work with the region’s transport authorities and elected mayors to build a long-term vision for transport across the north of England. As the voice of the north on transport, TfN will have unprecedented influence over government funding and decision-making.

This Government are clearly demonstrating that, in setting up Transport for the North and backing the election of metro mayors, we are giving the north greater autonomy and control, and a powerful voice to articulate the case for new transport projects.

[Lord Beecham]

Perhaps I could remind the noble Baroness that I raised the question of air passenger duty. Could she make some comment on that?

[Baroness Sugg]

My apologies for missing that. We are aware of the potential issue of the different rates of APD in Scotland and the north of England and indeed in the rest of the UK. In the Budget last week, that change was not made, but we keep a close eye on it.