West Coast Main Line

Lord Bradshaw Excerpts

Monday 29th October 2012 Lords Chamber

[Lord Bradshaw]

My Lords, I am not going to join the chorus of criticism. That is water under the bridge, the situation is going to cost a lot of money, and it may take a long time to resolve.

I have some experience of models, how complex they are, and how very few people actually understand what is inside them. You virtually have to have a degree in econometrics to understand them, and to some extent it is in the interests of the consultants that it should be so, because it keeps them in work. The whole issue of subordinated loans, which is connected with long franchises, means that you are asking the banks to put up a lot of money into the very distant future. We know that the banks are risk-averse and a new method must be found of covering this liability, or else it will bring all long franchises down.

I would like an assurance from the Minister that all the stalled franchises will continue good housekeeping, small investment schemes, support for community rail trusts, and all those things in the time before a new franchise procedure is launched. I warn him that it is going to take a long time, possibly two or three years, to get a viable scheme going.

Is it not better, rather than having very long franchises, to build into the franchise process a reward for delivery of excellent service, whereby each year you get something off the next bid? If you have five good years and then rebid, you may get a 5% advantage over any other bidders. That would underwrite continuity, which is appreciated by the staff and the customers.

I have one final question: will the noble Earl give attention to the large-scale orders that are imminent from rolling-stock companies? I am talking about big money. These will not go ahead unless the department gives some reassurance to the rolling-stock companies that the franchises they let are going to use the rolling stock. That is extremely important, particularly for lots of jobs in Derby and Preston.

[Earl Attlee]

My noble friend Lord Bradshaw made some important points but, of course, for answers to many of them we will have to wait to see what the Brown report says. However, I agree that we need to be careful to keep what is good about the current franchising system. At this stage, in advance of the report, I would not want to comment on how long it will take to get the franchising system running again. Rolling stock is of course a separate issue from the franchising problems, but he makes an important point and I will draw it to the attention of my right honourable friend the Minister of State.