Oral Answers to Questions

Lord Hammond of Runnymede Excerpts

Thursday 28th October 2010 Commons Chamber

[Karl MᶜCartney (Lincoln) (Con)]

12. What steps he is taking to ensure the economic sustainability of the rail network.

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

Recent estimates by the Office of Rail Regulation suggest that the UK railway has costs up to 40% higher than comparable European railways. To secure a fair deal for passengers and taxpayers in the medium term, we must get the cost base of the railway under control. The Rail Value for Money study led by Sir Roy McNulty will report in the spring, and the Government will then respond to its recommendations.

We have recently completed a consultation on passenger rail franchising, and will publish our response in due course.

[Peter Aldous]

The East Suffolk line has a vital role to play in helping to bring jobs to the east Suffolk and Waveney area. Can the Minister confirm that that will be taken into account when investment decisions are made?

[Mr Hammond]

I think that my hon. Friend is referring to the so-called Beccles loop, a scheme currently being developed by Network Rail whose implementation is planned for December 2012. Network Rail is expecting a £1 million contribution from Suffolk county council. Subject to that, funds are available for the scheme, and it is expected to proceed on schedule.

[Iain Stewart]

I welcome the Government’s commitment to major rail infrastructure projects between our major cities, but does my right hon. Friend agree that the long-term sustainability of our rail network can be enhanced by smaller projects such as the completion of the east-west rail link between Bletchley and Oxford?

[Mr Hammond]

I entirely agree. When I surveyed the proposed route of the high-speed railway a few weeks ago, I had an opportunity to examine the alignment of the proposed link. We will shortly begin discussions about the programme of enhancements that the Government wish to secure for the next railway control period, which will begin in 2014-15, and I am sure that the project mentioned by my hon. Friend will be one of those that will be considered carefully.

[Jake Berry]

The Rossendale to Manchester rail link is vital to economic development in Rossendale. Will the Secretary of State agree to meet representatives of the East Lancashire heritage railway board to explore ways of upgrading this heritage line to a commuter link?

[Mr Hammond]

I agree that good transport links with Manchester are vital to the regeneration and economic success of my hon. Friend’s area. I know that the local authorities in the area, together with Greater Manchester passenger transport executive, have been working on a scheme, for which the local sustainable transport fund that we have announced—or, alternatively, the regional growth fund—may be a potential source of funds. However, I or one of my colleagues would be happy to meet my hon. Friend.

[Karl MᶜCartney]

With regard to the economic sustainability of the rail network, particularly in my constituency of Lincoln, does my right hon. Friend believe that it would be helpful and desirable for Network Rail to act more reasonably and wisely in its economic modelling, and to reconsider its proposal to close the level crossings in our city, including the one that dissects the high street, for over 40 minutes in every daylight hour, a proposal that will decimate my constituency’s economy and the wider economy of Lincolnshire?

[Mr Hammond]

I am grateful to my hon. Friend for that question. I am aware of the impact that the level crossing in Lincoln has on the life of the town. Indeed, I have a similar situation in my constituency. There is an issue about the way scarce and valuable time on level crossings is divided between the railway and the road user. That must be informed by some proper cost-benefit analysis. The good news is that some new barrier technology is under assessment, which might help us, through a technical solution, to reduce the amount of barrier-down time necessary.

[Miss Anne Begg (Aberdeen South) (Lab)]

If the railways are to be economically sustainable, passengers have to be able to get through the stations and on to the trains, and many disabled people still cannot access large numbers of stations and trains are still inaccessible. The Government have decided to abolish the Disabled Persons Transport Advisory Committee. What process will be put in place instead to ensure that the good work that has been done to improve access is not lost and that we do not go backwards?

[Mr Hammond]

I welcome the hon. Lady's question. The decision to abolish the DPTAC was taken because disability issues have been mainstreamed into the Department's assessment processes and disability factors are brought into the advanced planning of programmes at all stages. As she will know, there is a rolling programme of improving access at stations, which Network Rail is funded to deliver. That programme will continue through this control period and into the next.

[Alison McGovern (Wirral South) (Lab)]

I speak regularly to businesses in Wirral, which tell me that they benefit greatly from the improvements to the west coast main line driven forward by the previous Government, but they are extremely fearful of ticket prices going up by RPI plus 3%—excruciating rises at this fragile economic time. What can the Minister say in response to those concerns?

[Mr Hammond]

As I said in my opening remarks, we have a problem with the cost base of our railway and in the medium term there is no doubt that the challenge for us is to get that cost base under control, so that we can ease the pressure on passengers and at the same time ease the pressure on taxpayers. However, in the short term, the decision that had to be taken was simple: do we go ahead with investment in additional rail vehicles to ease overcrowding and improve the passenger experience or do we not? We have taken the decision that investing for the long term is the right answer for the United Kingdom economy.

[Maria Eagle (Garston and Halewood) (Lab)]

It is good to be facing the right hon. Gentleman across the Dispatch Box for our first Transport questions. He again spent the last week all over the media, from “Newsnight” to “The Daily Politics”, pretending to be Chief Secretary to the Treasury, so I apologise to him for dragging him back to his day job. Why did he tell The Times that fares would rise by 10% over the spending review period when commuters are actually facing a hike in fares of 30% plus?

[Mr Hammond]

I welcome the hon. Lady to her place. Perhaps I cannot tell her and her sister apart and that is why I was responding to the shadow Chief Secretary earlier this week. She refers to a quote. On my arithmetic, RPI plus 3% for the last three years of the spending review period, with RPI plus 1% for next year equates to a 10% real-terms increase in the regulated average fare over the period of the spending review.

[Maria Eagle]

I have the quote in front of me. The right hon. Gentleman used a figure. He said this; it is in quotation marks, so he can tell me if he was wrongly quoted:

“If you are paying £1,000 for your season ticket now, it could cost you £1,100 at the end of the period”.

That is not saying that it is a real-terms increase of 10%. That is saying that it is an increase of 10% in total. His Government's own Office for Budget Responsibility predicts inflation of at least 3.2% from 2012. That will mean a rise of at least 6.2% a year, meaning that by 2014, fares will rise by over 30%. I would have expected better standards of arithmetic from someone who would rather be in the Treasury.

Let me try the right hon. Gentleman on another question. Why has he scrapped the cap on individual fares that we introduced? Does he understand that that will mean many fares rising by more than the 3% above inflation that he has allowed? Therefore, for the sake of hard-pressed rail users, who are already struggling thanks to other measures that the Government are taking, will he now abandon that stealth tax on commuters?

[Mr Speaker]

Order. This is the hon. Lady’s debut. In future, questions must be shorter.

[Mr Hammond]

I think Members will understand that what matters is the real-terms increase in fares, and that is what I was referring to.

The hon. Lady asked about the average fare cap. She talks as if in the past rail companies were restricted on individual fares. That is not the case. There was always a basket approach until this year—strangely enough, a general election year. For this year only, the previous Government announced that that system would be abolished and that companies would be limited on individual fares. We have gone back to the basket system because it provides the freedom to respond.

[Maria Eagle]

It’s a stealth tax.

[Mr Hammond]

It is not a stealth tax because companies are only allowed to increase regulated fares by a weighted average of 1% above RPI in the coming year across all the regulated fare pool.

[Kerry McCarthy (Bristol East) (Lab)]

3. What assessment he has made of the likely effects on local transport schemes of the implementation of the proposed reduction in funding for local government resource grants.

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[Tony Baldry (Banbury) (Con)]

7. If his Department will fund (a) tunnelling and culverting work and (b) other mitigation work arising from the construction of any future rail line as part of the High Speed 2 project.

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

The coalition Government take very seriously the potential impact of a high-speed rail line on line-side communities and property owners. HS2 Ltd’s current preferred route utilises a range of mitigation techniques, including tunnelling and culverting where appropriate, practical and economically justifiable.

[Tony Baldry]

On page 174 of the HS2 proposals, the report states:

“It is difficult to analyse exactly where the benefits of HS2 would accrue.”

HS2 is a project that will clearly be expensive in construction costs, mitigation costs and the costs of compensation. Will my right hon. Friend give an undertaking that next year’s consultation will include a consultation on the principle of HS2 and on whether the same amount or even less money spent on the existing rail infrastructure could produce similar or even better results?

[Mr Hammond]

I can assure my hon. Friend that the option of spending money on enhancing existing rail infrastructure to provide the capacity and the additional connectivity that a high-speed railway will provide has been examined in detail and has been found not to be a practical option. The consultation next year starts from the premise that the Government believe that a high-speed rail network will be in the United Kingdom’s interest, but it will consult on issues to do with the design of that network, the route and the details of the proposals for the London to Birmingham link.

[Stephen Timms (East Ham) (Lab)]

The Secretary of State will be aware of the potentially very important role for Stratford International as a stop for through services from High Speed 1 to High Speed 2. Given the prospect of competitive services on the channel tunnel rail link and developments in east London, as well as the success of the O₂ dome and so on, does he agree that there is a growing economic imperative for international trains to stop at Stratford?

[Mr Hammond]

As the right hon. Gentleman knows, Eurostar services are operated by a commercial company that makes decisions on the basis of its commercial best interest. I think the answer that he should be looking for is more competition and more operators on the line. I am very pleased to hear that Deutsche Bahn intends to start operating services through the tunnel to London. The more operators there are, the more likely they are to seek additional niche markets and to provide additional station stops.

[John Mann (Bassetlaw) (Lab)]

8. What recent representations he has received on road safety at Elkesley, Nottinghamshire.

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

9. What recent representations he has received on his Department’s proposed funding for highway infrastructure; and if he will make a statement.

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

We have received a number of representations from hon. Members and members of the public regarding investment in major road schemes since the spending review commenced in June. In terms of specific representations, we have received 25 from hon. Members and 73 from members of the public. In addition, I have held meetings with a number of key stakeholders during which the spending review was discussed.

[Miss McIntosh]

I am grateful to my right hon. Friend. Will he take a further representation from me here and now to review the cancellation of the A1 scheme from Leeming to Barton? It goes to the heart of the economy in the north of England, supporting my constituency and those of my right hon. and hon. Friends, and it is key to the economic growth of north Yorkshire. Will he reconsider the cancellation of that scheme?

[Mr Hammond]

As I said when I made my statement on Tuesday, we have sought to take some hard decisions, and some of the schemes that were being taken forward by the Highways Agency had no realistic prospect of being funded in this spending review period or the next one. In those circumstances, I have taken the view that it would be wrong to continue to spend money on development of a scheme which is unlikely to be built in the foreseeable future, and therefore the scheme had to be cancelled. I am sorry to have to disappoint my hon. Friend.

[Derek Twigg (Halton) (Lab)]

I am grateful to the Secretary of State and the Chancellor for their support for the Mersey Gateway. However, construction can start only if funding is in place and we know when that will be released. May I ask the right hon. Gentleman the same question that I asked him on Tuesday? Subject to agreement on funding in January, as per his report, can he tell us if construction will begin before 2015? In other words, will the money be released to allow construction to begin before 2015?

[Mr Hammond]

I can tell the hon. Gentleman that the money will be released for construction to begin before 2015. Of course, this is a local authority-led project, so the local authority will ultimately determine how quickly the project can proceed, but both the capital allocation sum that we have made available and the private finance initiative credits will be released for use before 2015.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

I know that many Members in the Chamber and drivers across the country are disappointed with the announcements that the Secretary of State made on Tuesday, but surely sending his Minister with responsibility for roads to Russia this week was a little steep. Is it not the case that for many of the yet unconfirmed schemes, local authorities are being asked to shoulder more of the burden at a time when they are facing a 28% cut in their funding? Does not the right hon. Gentleman feel a little like a car dealer who says to his customer, “You can drive away with any vehicle you choose,” before slashing the tyres of every single car in the showroom?

[Mr Hammond]

I suppose the simple answer is no. The hon. Gentleman might be interested that the Minister with responsibility for roads has gone to St Petersburg to join in an international conference on road safety. With reference to the local authority schemes in the development pool that I announced on Tuesday, what we have said is that local authorities need to look at ways of improving the benefit-to-cost ratios of the projects that they are promoting. In some cases, that will involve getting in third-party contributions, particularly developer contributions. Some authorities may wish to increase their own contributions. All authorities should be able to reduce cost.

[David Tredinnick (Bosworth) (Con)]

11. What proposals for improvements to the M1-M6 junction he is considering; and if he will make a statement.

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[Steve Rotheram (Liverpool, Walton) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

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

Since I last answered Transport questions, I have agreed the Department’s settlement with the Treasury. The settlement that we have achieved shows the Government’s commitment to investment in infrastructure and in transport infrastructure, in particular. The announcements that have been made, and that will be made over the next few weeks, will support economic growth and job creation.

[Steve Rotheram]

I am sure that the Minister is aware of the historical importance of the River Mersey as the lifeblood of the city of Liverpool, the wider sub-region and beyond. Therefore, following the Prime Minister’s call for sustainable economic growth, will the Minister meet Merseyside MPs and the leader of the city council to re-examine the economic evidence for a turnaround facility on the banks of our world famous, UNESCO-recognised and iconic waterfront?

[Mr Hammond]

I think that the hon. Gentleman is talking about a cruise liner terminal and turnaround facility. Cruise liner ports are operated primarily by private sector companies. Public money has been invested in the facility on the Mersey, and that public money was invested on the explicit understanding that it would not be used for turnaround. If it were, issues of state aid and unfair advantage would be raised. I am happy to discuss the matter with the hon. Gentleman, but I hope that he understands that there are European Union competition and legal issues around the matter.

[Mr Peter Bone (Wellingborough) (Con)]

T5. I recently met the Consular Corps of London, which made it clear to me, in no uncertain terms, that there is a problem at our ports and airports with human trafficking, with people being admitted to this country on clearly forged passports. I wonder what the Secretary of State can say about that, and whether he can talk to the Home Office about it.

[Mr Hammond]

I am grateful to my hon. Friend. As he will know, inward border controls are primarily a matter for the UK Border Agency, and I shall make sure that his comments are drawn to the attention of my right hon. and hon. Friends in that Department.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

T2. Bus services are a vital part of Newcastle’s economic infrastructure, and, despite the huge cuts to bus subsidies and to local government grants, the Minister is “hopeful” that bus fares will not rise and that bus services will not be cut. Unfortunately, the people of Newcastle cannot get to work on the Minister’s hopes. If fares do rise or if services are cut, what will the Minister do?

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[Mark Hendrick (Preston) (Lab/Co-op)]

T4. The Chancellor announced with a fanfare in the comprehensive spending review the modernisation and electrification of a number of lines up and down the country. Can the Secretary of State tell us when the electrification work on the Preston to Blackpool line will commence and when it will be completed?

[Mr Hammond]

I cannot give the hon. Gentleman a precise date now, but I am happy to talk to Network Rail about where that particular project lies in its current programme and get back to him.

[Philip Davies (Shipley) (Con)]

The Wharfedale and Airedale lines are two of the most congested railway lines in the country, and additional carriages are essential to alleviate that congestion. I am well aware that funds are limited, but will the Secretary of State prioritise additional carriages on those two lines, as that is essential for economic activity in the area, which I know is the Government’s priority?

[Mr Hammond]

I said when I made my statement on Tuesday that a further announcement would shortly be made about rail investment. That announcement will include the provision of additional rail cars to relieve overcrowding. I am afraid that my hon. Friend will have to wait for a few more days until that statement is made.

[Ian Lavery (Wansbeck) (Lab)]

On the rail network and fare increases, is the Minister aware that the proposed formula increase outlined in the CSR—that is, RPI plus three—will mean a cumulative increase of approximately 33.5% by 2015? That means, on the Newcastle to London line, an increase up to £500 for first class and £350 for second class—

[Mr Speaker]

Order. May I remind Members, both Back Benchers and Front Benchers, because I think they have forgotten, that topical questions and answers are supposed to be shorter? I think the Minister has got the thrust of the question, although the hon. Gentleman is certainly not the only offender, by any means.

[Mr Hammond]

I can do no better than refer the hon. Gentleman to my earlier exchange with the Opposition Front-Bench spokesman.

[Rehman Chishti (Gillingham and Rainham) (Con)]

May I ask the Minister for special consideration for communities in the south-east that had RPI plus three imposed on them by the previous Labour Government in 2006?

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[Mr Hammond]

I hear what the hon. Lady says. I repeat what I said on Tuesday: Nottingham has got a good deal out of the announcements that have been made over the past week or so. The A453 scheme remains in the development pool, which means that we will take it forward with further work. An announcement will be made during the course of 2011 on which of those schemes will be funded.

[Martin Vickers (Cleethorpes) (Con)]

I welcome the reply of the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker) to my hon. Friend the Member for Brigg and Goole (Andrew Percy) in connection with the delay to the A160 upgrade on the access road into Immingham docks. The Under-Secretary will be aware that the delay puts increasing pressure on the town of Immingham, and that the A18/A180 link road was given the amber light on Tuesday. Will he agree to meet me and the local authority to discuss how we can bring the work forward?

[Bill Esterson (Sefton Central) (Lab)]

In a letter to me, the Under-Secretary confirmed the good news about the Switch island to Thornton relief road, but he used the phrase “increased local contributions”. Can the Secretary of State tell me now what he expects those contributions to be?

[Mr Hammond]

I believe that the letter the hon. Gentleman refers to talks about the need for discussion to be held with local authorities on the cost of schemes and local contributions. As I said on Tuesday, when we are spending taxpayers’ money, we have an absolute duty to ensure that we have explored every opportunity to minimise the taxpayer contribution and the cost. That is what we will do, but he has approval for the scheme and it will go ahead. We will engage with his local authority to ensure that it is as efficient as possible.

The Minister for Women and Equalities was asked—