Oral Answers to Questions

Lord Hammond of Runnymede Excerpts

Thursday 22nd July 2010 Commons Chamber

[Chris Skidmore (Kingswood) (Con)]

2. What steps he is taking to make Britain’s railway system more financially viable.

[The Secretary of State for Transport (Mr Philip Hammond)]

Sir Roy McNulty’s review of value for money on the railway has produced a scoping study that identifies that the UK’s railway is, prima facie, up to 40% more expensive than railways elsewhere in Europe. We must adjust to a world in which our aspirations for a successful railway have to be met from within a much tighter public spending envelope. I have therefore asked Sir Roy to accelerate his work looking at the drivers of cost across the industry, and to produce recommendations for creating a sustainable railway with growing passenger usage and declining subsidy.

[Chris Skidmore]

According to the parliamentary report “Transport in the South West”, the south-west has been hit with an increase in the price of unregulated fares. The report states that some rail fares between Swindon and London—a distance of only 77 miles—are the highest for a comparable distance anywhere in Europe. Will my right hon. Friend consider the impact of unregulated fares, especially in Bristol and my constituency of Kingswood, in future rail policy decisions?

[Mr Hammond]

I am grateful to my hon. Friend for that question. About 60% of rail journeys are undertaken using regulated fares, which are governed by the formula imposed by the Department for Transport, but my right hon. Friend the Minister of State has today initiated a consultation on future franchising strategy, and we can certainly take my hon. Friend’s representation as a response to that consultation.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

The inefficiencies identified by Sir Roy McNulty must be addressed as a matter of urgency, but does the Secretary of State agree that passengers, and indeed freight, must not be priced off the railway, and that essential investment, such as electrification, must go ahead?

[Mr Hammond]

I am grateful for the hon. Lady’s support for the review and the work that Sir Roy McNulty is doing, and I am glad that she recognises the urgency of ensuring that our railway is affordable and sustainable, so that it can attract the investment that it needs. I agree with her that we need a sustainable railway with growing passenger numbers and growing freight usage.

[Mr David Evennett (Bexleyheath and Crayford) (Con)]

Would my right hon. Friend agree that we want a sector that not only is financially sound, but delivers a better quality of service for passengers?

[Mr Hammond]

My hon. Friend is, once again, absolutely right. The objective must be to have a railway that is responsive to the needs of its customers, generating viability by responding to those needs—in fact, a railway that does what businesses throughout the economy do if they are to be successful and sustainable.

[Mr William Bain (Glasgow North East) (Lab)]

I agree with the Secretary of State that a central issue for the financial viability of the railways is the Government’s future policy on fare increases. The coalition agreement commits the Government to fair increases in rail ticket costs. Will the Secretary of State confirm recent reports that he has proposed to the Treasury changing the formula on capped fares and season tickets for next year from the retail prices index plus 1% to as much as RPI plus 5%? Does he not understand how unfair and unreasonable a fares hike of up to 10% will be to millions of hard-pressed commuters across the country if he cannot give an assurance to the House that every penny in increased fare revenues will be reinvested in the new rolling stock and capital projects that our railway system so badly needs?

[Mr Hammond]

The hon. Gentleman got to the nub of the issue in his last sentence. The coalition agreement commits us to a policy of fair fares, and we are committed to ensuring that fares are fair for rail users. No decisions have been made as yet about future fare increases, but he correctly identifies that, as a result of the spending review precipitated by the fiscal crisis that we have inherited, there may have to be a trade-off between fares and continuing vital investment in our railway. I have said that it would be wrong to rule out, ahead of the spending review, any change to the fare policy.

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[Mike Crockart (Edinburgh West) (LD)]

6. What assessment he has made of the implications for his Department’s policy of Sir Andrew Foster’s report on the intercity express programme.

[The Secretary of State for Transport (Mr Philip Hammond)]

My statement to the House of 6 July announced that a decision on the future of the intercity express programme would be made as part of the spending review announcement in October, and that the Government would use the intervening time to pause for reflection and a fresh, detailed analysis, including a review of the alternatives in line with Sir Andrew’s recommendations.

[Mike Crockart]

I thank my right hon. Friend for his response, but given that the country and indeed his Department continue to suffer from significant budgetary pressures, would it not be better to cancel the IEP programme and extend the life of our InterCity 125 trains, which have performed very well over the years, so that we can continue to invest in matters such as upgrading track infrastructure and high-speed rail, which would deliver significant economic benefits?

[Mr Hammond]

The previous Government commissioned a report from Sir Andrew Foster, which has now been delivered. It was a detailed piece of work containing a lot of recommendations, and one of Sir Andrew’s suggestions was that we should review the possibility of an upgrade and life extension of the existing 125 fleet. That is one option that we will consider during the pause that I mentioned.

[Phil Wilson (Sedgefield) (Lab)]

If the intercity express programme survives the comprehensive spending review, Hitachi intends to build the trains in Newton Aycliffe in my constituency, creating hundreds of jobs there and thousands in the manufacturing supply chain. It would be one of the biggest investments in the north-east since Nissan. Would the Minister be prepared to meet me and a delegation of north-east businessmen and trade unionists so that we can get the point across about how important the scheme is to the north-east of England?

[Mr Hammond]

I am always happy to meet Members, and I would be very happy to meet the hon. Gentleman, but I can tell him that I met the president of Hitachi recently on his visit from Tokyo, and that I have met the Japanese ambassador, and they forcefully made the same points as him. We will of course take them into account.

I should perhaps say that Hitachi is also interested in other rail projects in the UK, and we have heard very encouraging signs that the company intends to establish a serious presence in the UK as part of our future rail infrastructure development.

[Sadiq Khan (Tooting) (Lab)]

The Secretary of State will be aware that as a direct result of our investment, more people are using our railways than at any time since the 1940s. That is good for the environment and for tackling congestion and all its consequences. Continuing with our programme of additional rolling stock will not only lead to more jobs but be good for British manufacturing and growth. It is also a good way to continue to encourage more people to leave their cars and use our rail network. Will he aggressively lobby the Treasury for more investment in rolling stock, rather than listen to some of his hon. Friends who want cuts in additional rolling stock?

[Mr Hammond]

I am not sure whether the hon. Gentleman is conflating the debate on the high-level output specification rolling stock programme with that on the intercity express programme, but once again he shows a failure to recognise the reality of the situation that we have inherited from the previous Government. We have to deal with the fiscal crisis facing this country and prioritise investment in matters that will support economic growth and the decarbonisation of the economy. We will do that job effectively, and he will hear the result once the spending review is announced in October.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

7. What representations he has received on upgrading the A64 between York and Scarborough; and if he will make a statement.

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[Hugh Bayley (York Central) (Lab)]

12. What plans he has for the future of the franchise for the east coast main line rail service.

[The Secretary of State for Transport (Mr Philip Hammond)]

The Government intend to let a new franchise to return the operation of east coast main line rail services to the private sector. My right hon. Friend the Minister of State launched a franchising review this morning, seeking views on the most appropriate options to secure longer-term investment. In the meantime, services will continue to be provided by the East Coast Main Line Company Ltd, which the Department owns in its entirety.

[Hugh Bayley]

The headquarters of the east coast rail service has been based in York since the 19th century because logistically it is the right place to be. Will the Secretary of State examine the case for reducing uncertainty for the key business partners of the east coast train operating company by confirming that the new franchisee, when appointed, will be required to keep the headquarters of the business in York?

[Mr Hammond]

I appreciate the hon. Gentleman’s intervention on behalf of his constituents and I understand the concerns that the uncertainty will cause. However, it would be wrong, in view of the franchising consultation that my right hon. Friend the Minister has announced today, for me to start making prescriptive statements about what a future franchisee under an as yet undetermined franchising regime will be required to do.

[Peter Aldous (Waveney) (Con)]

13. What progress has been made on the Government’s review of rail franchising; and if he will make a statement.

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[The Secretary of State for Transport (Mr Philip Hammond)]

There is a large and well-integrated Sikh community in the UK. Special arrangements to take account of their headwear have existed at least since the introduction of compulsory motorcycle helmets. On 29 April, the European Union altered the rules on the searching of religious headwear at airports, and this has provoked a furious reaction from members of the Sikh community. On 25 June, I instructed UK airports that they should temporarily revert to the previous arrangements, despite the EU rules. The Sikh community has recognised this positive step and we are now working with them and with the EU to identify a suitable way forward.

[Gareth Johnson]

I am pleased that my right hon. Friend is aware of the EU’s initiative that means that turbans can be searched and, indeed, unravelled by airport security officers. Does he agree that we need an approach that protects the security of travellers, but that also fully recognises the importance of turbans to the followers of the Sikh religion?

[Mr Hammond]

I do indeed agree with my hon. Friend. The ultimate solution probably lies in the introduction of scanners as a primary means of security screening at our airports. At the moment, that cannot be done under EU rules. Part of my discussion with the EU is seeking to persuade it that we can resolve the particular problems of religious headwear by addressing the wider issue of adopting scanners as a primary screening method.

[Mr Philip Hollobone (Kettering) (Con)]

16. When he expects to announce his Department’s decision on the planned widening by the Highways Agency of the A14 around Kettering.

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[The Secretary of State for Transport (Mr Philip Hammond)]

Since I last answered departmental questions, we have announced a new framework for the economic regulation of airports; our south-east airports taskforce has commenced work; we have announced the sale of High Speed 1; and we have launched a £15 million fund to incentivise the purchase of low-carbon buses. I have also prepared and submitted a spending review bid to the Treasury.

[Dr Poulter]

I thank the Minister of State for her earlier answer in reply to my hon. Friend the Member for Waveney (Peter Aldous) in respect of recognising the importance of the East Suffolk line to the future prosperity of central and eastern Suffolk. Part of improving the infrastructure is a vital stretch of track called the Beccles loop, which would enable a future franchisee to run a full London to Lowestoft service. May we count on the Secretary of State’s support in pursuing the funding for that vital stretch of track?

[Mr Hammond]

Any future proposals for rail enhancements will be considered in the usual way in setting the output requirements for control period 5, which will define Network Rail’s investment programme from 2014 onwards.

[Sadiq Khan (Tooting) (Lab)]

More than 1 million Londoners are entitled to Labour’s freedom pass and more than 11 million older and disabled people in England are entitled to Labour’s concessionary bus pass. Pass holders have been made anxious by reports in the media of the submission made to the Treasury by the Secretary of State in relation to the comprehensive spending review. The CSR is three months away, so can he reassure those anxious older and disabled citizens that he has not submitted, in his job application/CSR bid, any change in the eligibility requirements for those who receive the bus pass?

[Mr Hammond]

The hon. Gentleman refers to two separate things. The arrangements in London are of course the responsibility of the Conservative Mayor of London, and I cannot answer for the decisions that he will make on the operation of the scheme in London. With regard to the national scheme, the Prime Minister and the Deputy Prime Minister have both made clear their commitment to the scheme in its current form. It is enshrined in primary legislation and we have no plans to change it.

[Andrew George (St Ives) (LD)]

T2. The Chancellor promised that the vulnerable would be protected from budget cuts, but I know that Ministers will be well aware that there has been much speculation about the future viability of the bus service operators grant, which is clearly essential to many marginal rural services, the sustainability of which would be called into question if that were to be in any way cut. What reassurance can Ministers give me and my constituents that those rural services, which are essential—

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[Mr David Hanson (Delyn) (Lab)]

T7. Has the ministerial team seen the comments by the hon. Member for South Suffolk (Mr Yeo) in which he called for the privatisation of motorways and a widespread increase in road tolling? Will Ministers rule out such proposals for the duration of this Parliament?

[Mr Philip Hammond]

The coalition Government have indeed ruled out the tolling of the existing road network for the duration of this Parliament.

[Tony Baldry (Banbury) (Con)]

T3. What are the Government going to do to make it safer for motorcyclists by improving the tests for motorcyclists? In particular, the last Government so reduced the number of test sites that we had the slightly ludicrous situation of motorcyclists who had not passed the test having to travel considerable distances on their motorbikes to take the test. So can we see some improvement in the test regime for motorcyclists?

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[Mr Speaker]

Order. This is Topical Questions, so one question—short and sharp.

[Mr Hammond]

I think I can gather the balance of the question, Mr Speaker. We well understand that the national strategic and economic benefits of the high- speed rail network have to be balanced against local environmental disbenefits. Of course, the project will be designed with maximum sensitivity in mind, and I am happy to tell my hon. Friend that I will be visiting the line of the proposed route in the summer recess.

[Alison McGovern (Wirral South) (Lab)]

Last week, I spoke to residents in Heswall in my constituency who are most concerned to get the train to Liverpool rather than their cars. The Wrexham to Bidston electrification project is vital for that. Will the Minister explain briefly what work her officials in the Department are doing to work with Network Rail, Merseytravel and others to take this vital project forward?

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[Alison Seabeck (Plymouth, Moor View) (Lab)]

Will the Secretary of State respond to a letter that I received from a constituent of mine, Mr Rod East? He is 61 and has a concessionary bus pass. Plymouth city council will have to renew it in 2011 under the system it is operating. Will he please confirm his earlier statement that no changes to the concessionary bus pass will apply to Plymouth city council?

[Mr Hammond]

I can only repeat what I said earlier: we have no plans to change the national concessionary scheme. The Prime Minister and Deputy Prime Minister have both made very clear their commitment to the national scheme.

[Jo Swinson (East Dunbartonshire) (LD)]

T6. I welcome the Government’s commitment to high speed rail, particularly to encourage people to use rail instead of domestic air travel. Given the rising cost of rail compared with flying, what will the Secretary of State do to get the price mechanism right in order to get this shift from air to rail?

[Mr Philip Hammond]

The High Speed 2 project will introduce a massive increase in capacity. These will be huge trains, with 1,100 seats each, and they will run at a very high frequency. Simple demand-and-supply economics should help to keep travel affordable. At the same time, after 2012, aviation will come within the European emissions trading scheme, and the carbon costs of aviation will start to be reflected in the cost of flying.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Will the Minister rule out reclassifying Network Rail as a public company, which would be a Railtrack mark 2, and commit to a not-for-dividend organisation?