Intercity Express and Rail Electrification

Lord Hammond of Runnymede Excerpts

Tuesday 1st March 2011 Commons Chamber

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

With permission, Mr Speaker, I shall make a statement on the Government’s plans for extension of the electrification of the Great Western main line and for the procurement of a replacement for the existing diesel inter-city trains. The two issues are closely connected. First, I shall address the provision of a new generation of inter-city 125 mph trains to take advantage of the electrification of the Great Western main line and to allow the phasing out of most of the ageing diesel InterCity 125s.

In February 2009, the intercity express programme, launched by the previous Government, identified Agility Trains, a consortium of Hitachi Rail and John Laing plc, as the preferred bidder to provide a new fleet of inter-city trains. Subsequently, the previous Government placed the process on hold and ordered a review of the procurement by Sir Andrew Foster. Last summer, recognising the fiscal challenges that the UK faces and the impact of the new Government’s plans for high-speed rail to Leeds and Manchester, Agility put forward an improved, lower-cost proposal to provide the required service through a mixed IEP fleet with some all-electric trains and some with a combination of electric and diesel power, allowing it to operate through services beyond the electrified railway. The proposal retained the more modern electric InterCity 225s on the east coast main line, as the previous Administration had proposed.

We have reviewed the proposal against the alternative of an all-electric fleet, with purpose-built diesel locomotives coupled to trains to haul them beyond the electrified railway. Either way, it would represent a multi-billion pound investment for this country, underpinning the operation of inter-city services on the conventional railway for many years to come, and it is imperative that the right choice be made.

As I said at the time of my statement to the House on 25 November, there were complex legal, technical and commercial issues to be addressed and both the Government and Agility Trains, as preferred bidder, recognised that. Over the past few months, we have worked together on these issues and I can now announce that I am resuming the IEP procurement and proceeding with the proposal that Agility Trains has put forward as preferred bidder. We will now work with Agility Trains with a view to reaching financial close by the end of this year. That is, of course, subject to the Government’s continuing to be satisfied that the proposal offers value for money as the commercial negotiations are concluded and that the final arrangements are compliant with the United Kingdom’s European Union obligations. This deal will allow us to provide better, faster, more comfortable services and to continue providing through journeys between London and parts of the rail network that are not electrified. In total, there will be over 11,000 more peak-time seats each day on the Great Western main line and the east coast main line post-IEP compared with today.

Hitachi is today confirming its plans to locate its European train manufacturing and assembly centre at Newton Aycliffe in County Durham. That investment is expected to create at least 500 direct permanent jobs, as well as hundreds of temporary construction jobs. Thousands more job opportunities will be created in the UK manufacturing and service supply chains. Coming just days after the news of the reopening of the Redcar steelworks, this is a massive and very welcome shot in the arm for the skilled work forces of the north-east’s industrial heartland.

I turn now to the related issue of electrification of the Great Western main line. I announced to the House on 25 November that, over the next six years, Network Rail will electrify the commuter services on the Great Western main line from London to Didcot, Oxford and Newbury. I recognise that this announcement, although welcomed in the Thames valley, left unanswered the clear aspirations of rail users further west for the extension of electrification to Bristol and into Wales. I and my right hon. Friend the Secretary of State for Wales have subsequently considered the options for extending electrification, alongside the Government’s consideration of the proposals for replacement of the current diesel InterCity trains, and in close consultation with the Welsh Assembly Government.

We have concluded that there is a case for extending electrification westwards to Bristol and Cardiff, and I am today asking Network Rail to add that major extension to its electrification programme immediately. This is good news for Wales and the south-west against a backdrop of public spending constraint as we deal with the legacy of debt that we inherited. Bringing electrification to Cardiff will mean that we are linking, for the first time, the capital cities of England, Scotland and Wales by electrified rail. These measures will deliver a London to Cardiff journey time of 1 hour and 42 minutes and will shave 22 minutes off the London to Bristol journey.

I have received representations calling for the electrification of the Great Western main line to be extended as far west as Swansea and we have looked carefully at the arguments. The business case for electrification is heavily dependent on the frequency of service. Services between London and Swansea currently operate at a frequency of only one train an hour off-peak. There is no evidence of a pattern of demand that would be likely to lead imminently to an increase in this frequency. Consequently, I regret to have to say that there is not, at present, a viable business case for electrification of the main line between Cardiff and Swansea.

However, because of the decision to proceed with Agility’s proposal for a bi-mode train, journey times from London to Swansea will be shortened to 2 hours and 39 minutes—20 minutes faster than today—with trains switching automatically to diesel power as they leave Cardiff. As the constraining factor on the south Wales main line is speed limitations dictated by the geometry of the line, there would be no time-saving benefits from electrifying the line from Cardiff to Swansea. However, the policy of the Government is to support a progressive electrification of the rail network in England and Wales, for environmental reasons among others. My right hon. Friend the Secretary of State for Wales and I will therefore keep under active review the business case for future electrification of the Great Western main line between Cardiff and Swansea in the light of developing future service patterns.

I have a further announcement to make to the House. In the course of the examination of the case for electrification in south Wales that I and my right hon. Friend have undertaken, we have established, at an initial high level, that there appears to be a good case for electrifying the key valley commuter lines north of Cardiff via Pontypridd and Caerphilly to Treherbert, Aberdare, Merthyr Tydfil, Coryton and Rhymney, as well as the lines to Penarth and Barry Island to the west. My Department will therefore work with the Welsh Assembly Government to develop a full business case for the electrification of the Cardiff valley lines during the next rail investment control period beginning in 2014. The Welsh Assembly Government will need, in parallel, to consider the case for specifying suitable electric trains for those routes when the Wales and Borders franchise is re-let in 2018. That would, of course, be a prerequisite for electrification proceeding, and the timetable for franchise re-letting and re-specification necessarily dictates the time scale of the proposed electrification.

On the basis of our preliminary evaluation, the valleys electrification represents the best value for money rail electrification investment that can be made in Wales. It promises to bring all the benefits of electric commuter trains—faster acceleration, greater comfort, cleaner and greener travel, and greater reliability—to rail users in south Wales. It would have a significant effect on the economy of Cardiff and the valleys by deepening labour markets, improving connectivity and significantly enhancing the attractiveness of the area to investors. Coupled with the electrification of the Great Western main line, it would represent a major boost to the economy of south Wales as a whole. These three decisions—on the intercity express programme, on Great Western main line electrification and on building the business case for electrification of the valleys commuter lines—represent a major further investment in UK rail infrastructure. They follow the announcements that I have already made on Crossrail, Thameslink, tube upgrades, Thames valley and north western electrification and additional rolling stock.

The decisions sit alongside the Government’s proposals for high-speed rail, the consultation on which I announced to the House in a written statement yesterday, as testimony to this Government’s commitment to investment in the future of Britain’s railways. They represent excellent news for passengers on the Great Western main line and the east coast main line, for commuters on the Cardiff valley lines and for the economies of south Wales and north-east England as a whole. I commend this statement to the House.

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

I thank the Secretary of State for the early sight of his statement—he actually sent me two statements, although they appear to be the same. I will begin by welcoming the much delayed green light that he has today given to the new intercity express programme, which was launched by Labour before the last election. That this programme is now to go ahead, with the significant boost for jobs that he referred to, is testament to the tenacity and tireless campaigning of my hon. Friend the Member for Sedgefield (Phil Wilson), The Northern Echo, the local community trade unions, particularly Unite, and the local work force. I congratulate them all on what has been an incredible triumph for their campaign.

Can the Secretary of State confirm when passengers will first be able to enjoy these new trains? Have the delays in making the announcement had any impact on the delivery date for the trains? Will he confirm whether he has made any other changes to the contract, for example to the number of trains or the cascading plan for the existing rolling stock, as a result of today’s announcement?

The Opposition obviously welcome the decision to go ahead with the electrification of a further stretch of the Great Western main line to Cardiff. It is the result of the commitment we made in government and also the efforts made since the Secretary of State’s last statement in November by my right hon. Friend the Member for Neath (Mr Hain), my hon. Friend the Member for Pontypridd (Owen Smith), the First Minister of Wales, Carwyn Jones, other MPs and Assembly Members, and the business community across south Wales. I am glad that the Secretary of State has listened to them about the vital need for modernisation, which will speed up the journey time between our capitals from 2 hours five minutes to 1 hour 40 minutes, which has to be welcome. It is a real boost to business, with the potential for investment and jobs, and to Wales.

However, does the Secretary of State understand the deep upset that will be felt by people in Swansea and across Wales at the St David’s day disappointment that the electrification will not continue as far as Swansea, as Labour had intended? He has broken his manifesto commitment to

“support the electrification of the Great Western line to South Wales.”

The Secretary of State for Wales, who I am glad to see is in her place, was pretty quiet yesterday when the Transport Secretary confirmed plans for a high-speed rail route through her constituency, which she previously said she could not support. The people of south Wales will expect her to be more vocal today in explaining why the Government have let down the people and businesses that are further south and west than Cardiff.

The Transport Secretary has just extolled the virtues of electrification, including, in his own words, its “significant effect on the economy of Cardiff and the valleys—deepening labour markets, improving connectivity and significantly enhancing the attractiveness of the area to investors.” Why cannot the people of Swansea, and of west Wales beyond Swansea, also have that advantage? Can he confirm when the electrification of the line to Cardiff will be completed, and why, as far as he is concerned, electrifying just 40 more miles of track to Swansea appears to be such a bad idea?

Is it not true that the case for electrification was previously approved by the Treasury? Anybody who has dealt with the Treasury, as we now all have, knows that the rate of return would have had to meet its tough criteria, so why does the right hon. Gentleman continue to suggest that there is no proper business case for electrification all the way to Swansea? Does he accept that, if Swansea is not a part of the single roll-out construction programme, the Government will incur 20% additional costs to stop construction and then take it up again? He is in fact saying that the stretch of line from Cardiff to Swansea will not be electrified at all—except by incurring unnecessarily high extra costs.

I welcome in the right hon. Gentleman’s statement the part about looking at further electrification in Wales on the valleys train lines, but he is holding out the promise of potentially producing a post-dated cheque at a later date, because there is no funding available in this spending review period. He says that he has made a decision about the matter, but his only decision has been to look at whether there is a business case, so there is no guarantee of his carrying out the project. Perhaps he is trying to deflect attention from the fact that he is failing to meet his manifesto commitment to take electrification all the way to Swansea.

Will the right hon. Gentleman update the House on where his Department is with the procurement of the 1,200 new carriages for Thameslink? We still have not heard about that major project, in which many UK jobs are at stake, and it would be good if we did not have to put up with Thameslink being hit by the same delays that have beset the IEP project. Does he have an updated time scale for when the new Thameslink and Crossrail trains will benefit passengers by actually being in service? Will he explain what impact the delay will have on the plans for cascading the existing rolling stock?

Why, when the right hon. Gentleman must have known that he was making a statement today, did he choose yesterday to slip out by written answer—without informing the media or the House—a decision to end all funding for local rail schemes that local authorities and integrated transport authorities develop? His decision means that no new schemes will be able to go ahead between now and April 2015. Can he explain why that decision was not made in the comprehensive spending review, and why he put it out yesterday under cover of his publication of the high-speed rail consultation?

As I have made clear, I welcome today’s confirmation of the investment in the rail network that Labour planned and announced when in government. The additional electrification and the major project to replace our outdated inter-city fleet will significantly improve the passenger experience on our rail network and bring economic benefits to the country. However, the unnecessary delays in bringing forward those plans, and the decision to bring disappointment to south Wales on St David’s day, are just further evidence of the dither and delay that seems to grip the right hon. Gentleman’s Department. Both of his announcements today imply more delay than the original plans. His third announcement on further electrification in Wales is another example of jam tomorrow but no money today, and no guarantee of progress. In the end, he will be judged on what he delivers, and Labour Members will be looking closely at that.

[Mr Hammond]

We have been treated to a classic rant. There are two types of people in this world: the glass-half-full brigade and the glass-half-empty brigade—and let us guess which one the hon. Lady belongs to. She is determined resolutely to find bad news even in a statement about massive investment at a time of constrained public spending.

The hon. Lady, apart from treating us to a read-out of her contacts book, which was fascinating, had the nerve to accuse us of unnecessary delays. I would like to remind her that it was the previous Administration who pulled the IEP procurement and asked Sir Andrew Foster to review it, reopening the issues. I can tell her today that trains will start to be delivered to the Great Western main line from 2016 and on to the east coast main line from 2018.

On the question of electrification, the hon. Lady mentioned the right hon. Member for Neath (Mr Hain), the man who talks a good talk about electrification but was, if I remember rightly, Secretary of State for Wales in the previous Administration—an Administration who, in 13 years, did not manage to electrify a single inch of railway in the Principality. A couple of weeks ago, the hon. Lady, who is now so keen on electrification in Wales, was telling us that Labour had no commitment to electrification in Wales because it was conducting a spending review and everything was up for grabs. That was until the very same right hon. Member for Neath came along and slapped her down, and made her change her tune.

The hon. Lady talked about our manifesto commitment at the last general election. I can tell her—[Interruption.] I have it right here; I will quote it back to her in a minute if she wants. Our manifesto commitment at the last general election was to electrify the railway into south Wales. I know that she is not shadow Secretary of State for Wales, but even she should know that Cardiff is in south Wales. We have delivered today on the commitment that we made.

The hon. Lady made a plea for electrification to Swansea. I understand that people in Swansea will be disappointed by the announcement that I have made today because of the expectations that the previous Government raised without bothering to establish that there was a sound business case for the proposed expenditure. However, she has not, at any point, made a logical argument for the electrification that she pleads for. I have told her that the bi-mode trains that we are procuring will deliver a journey time saving of 20 minutes to Swansea—the same journey time saving that the previous Government were promising through electrification. We will deliver the benefits to the people of Swansea from electrification to Cardiff and continuing bi-mode train operation onward from Cardiff to Swansea. She asked me about the electrification to Cardiff. That will be completed in 2017.

On the valleys electrification, the hon. Lady says that there is no funding in the spending review. I am disappointed that she has not yet grasped the complexities of rail capital funding. Network Rail funds electrification through its regulated asset base. The investment programme is set in control periods, the next of which starts in 2014. What I have announced today is that we have established that there is, on the face of it, a strong business case for this investment in the valleys electrification. We will work it up with Network Rail and the Welsh Assembly Government, with a view to including it in the next investment programme period.

[Several hon. Members]

rose—

[Roger Williams (Brecon and Radnorshire) (LD)]

In the face of gloom, doom and whingeing from the Opposition, this is really good news for Wales. St David’s day will be toasted with a full glass in Cardiff and a nearly full glass in Swansea. I am pleased that the Secretary of State said that he will continue to review the case for electrification to Swansea. Will he confirm that he will do so?

[Mr Hammond]

As I have said, my right hon. Friend the Secretary of State for Wales and I will continue actively to look at the case for electrification to Swansea. I said that we would do so in the light of developing service patterns. The important point is that once the valleys lines are electrified, it is quite possible that new electric services could be provided that head through Cardiff and to the west, which might change the economics, and thus the business case, for the Cardiff to Swansea section.

[Phil Wilson (Sedgefield) (Lab)]

I congratulate the Secretary of State on his announcement on the intercity express programme. As he knows, the investment and jobs involved are very important for my constituents in north-east England. Will he join me in congratulating the Back on Track campaign, which was led by The Northern Echo, Durham county council, the chamber of commerce and the northern TUC? Will he also congratulate my constituents on the way in which they brought this matter to the attention of the Department for Transport, and helped it to make the right decision?

[Mr Hammond]

I am happy to acknowledge the hon. Gentleman’s tireless battle for the IEP. He has arranged for various worthies from his constituency to visit me and the Department to make the case. This has been a complex process with legal, technical, financial and commercial issues to resolve. We have worked closely with Hitachi to get to this point. I understand that he wanted us to get here more quickly, but I assure him that we have progressed as fast as possible.

[Jonathan Evans (Cardiff North) (Con)]

As a Cardiff Member of Parliament, I thank my right hon. Friend unequivocally for today’s announcement. I also congratulate my right hon. Friend the Secretary of State for Wales, who has fought her corner wonderfully. Making the case for the electrification of the valley lines in the announcement was something that Opposition Members did not expect and that they were never committed to. From June 2009, they were supposedly committed to electrification, and yet nothing whatsoever was done. Will my right hon. Friend the Secretary of State for Transport commit to ensuring that this announcement is carried forward, unlike the announcements that were made by those who are now on the Opposition Benches?

[Mr Hammond]

Absolutely; I give my hon. Friend that commitment. The hon. Member for Garston and Halewood (Maria Eagle) used most of her time in responding to the statement by talking about Swansea. The evidence shows that there is a much stronger business case for the electrification of the valley lines. When a limited amount of public money is available, it is absolutely incumbent on us—she can ask her sister about this—to ensure that it is spent on the areas that deliver the best value for money to the Exchequer.

[Mrs Siân C. James (Swansea East) (Lab)]

Having fought a long and hard campaign to get rail electrification in Swansea, I congratulate Cardiff and the valleys because their glass is very much full at the moment—I will raise a glass to them. Unfortunately, I will have to go back to my constituents in Swansea and explain that they are not as important. I will have to explain that modern transport and infrastructure, and opportunities for investment and tourism are not on the cards for them. The Secretary of State spoke about there being no good financial case for rail electrification to Swansea. All the trains along the south Wales main line—I will talk slowly to make this point—

[Mrs James]

Most of the trains along the south Wales main line have to go to Swansea, because it is a turnaround point. How can we increase the pattern of trains to Swansea if we have already said that trains do not go there as often as we need them?

[Mr Hammond]

Obviously I understand that the hon. Lady is disappointed. She has made her pitch to me repeatedly, having caught me every time I have passed behind the Chair over the past few months. I am sorry that I have had to be rather uncommunicative, but she will understand the reasons. I am disappointed that she has not acknowledged that the huge time-saving benefit from electrification will be delivered through the introduction of bi-mode IEP trains and the electrification of the route as far as Cardiff. Because of the line speed restrictions, there would be no further time savings for Swansea even if we electrified the rest of the line. Huge benefits will be delivered to Swansea—a 20 minute time saving is extremely significant. I hope she will at least acknowledge that that will be a huge benefit for the area that she represents.

[Mr James Gray (North Wiltshire) (Con)]

I warmly welcome the Secretary of State’s announcement this afternoon. Will he confirm my memory that Isambard Kingdom Brunel’s Great Western main line runs from Swindon, through Chippenham and Bath, to Bristol Temple Meads, not on the branch line from Bristol Parkway and onwards to Wales? Does he intend to allow the electrification of the line to Bristol Temple Meads, as well as the branch line to Wales?

[Mr Hammond]

I am not sure whether I mentioned this in my statement, but my hon. Friend is absolutely correct—the electrification will include the line through Bath to Bristol Temple Meads and also the line from Bristol Parkway to Bristol Temple Meads. That will ensure that we can increase the frequency of London-Bristol Temple Meads trains to four per hour and shave 20 minutes off the journey time to Bristol Temple Meads from London, using the Bristol Parkway route rather than the Bath route to get the additional time saving.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

I fully appreciate the announcement as far as Cardiff and the valley lines are concerned, and I congratulate the Government on it. In a spirit of, I hope, reasonable suggestion, may I ask the Government to ensure that work is done urgently to see how the line speed from Cardiff to Swansea can be improved in due course, so that electrification can be taken across to Swansea with, I am sure, a good business case?

--- Later in debate ---

[Mr Hammond]

I welcome the right hon. Gentleman’s comment, because it is at least a constructive comment that plays into the need to develop a proper business case for a proposal. We can consider line speed improvements, and indeed the current rail investment programme includes a significant number of them, including some on the network in south Wales. However, I understand that the geography of the area creates some difficulties and potentially some very significant expense in enhancing the line speed between Cardiff and Swansea.

[Martin Horwood (Cheltenham) (LD)]

Having travelled the Great Western main line this morning, may I welcome the statement warmly? It promises far more quiet, efficient, reliable and energy-efficient trains for my constituents and many others than the last Government ever delivered. It is good news for English and Welsh jobs, and incidentally it makes an even stronger case for the redoubling of the Swindon to Kemble line, which would add resilience.

In the Department’s long-term thinking, will Ministers still look favourably on eventual electrification to Swansea and on longer franchises for train operators, which might in time enable them to specify their own rolling stock? That would add even more to an increasingly bright future for Britain’s railways.

[Mr Hammond]

As the hon. Gentleman will know, we have already announced that we intend to operate a longer default franchise period of 15 years, to start to stimulate exactly the type of behaviour that he talks about.

It is the Government’s policy to support a progressive electrification of the railway throughout England and Wales—Scotland makes its own rail infrastructure investment decisions—not only because of time savings but because of the environmental case for an electric railway. Through progressive investment control periods, we will continue to look to roll out the electrification of the railway across England and Wales.

[Geraint Davies (Swansea West) (Lab/Co-op)]

This is a sad and disappointing St David’s day for Swansea—[Hon. Members: “Ah!”] Well, it is, particularly in the light of the fact that the Secretary of State denied a meeting with private sector stakeholders and Swansea university, alongside the MPs of Swansea and west Wales, to examine the business case for inward investment in further electrification. Given that Swansea is the second worst-hit city in the UK from Government cuts, will he undertake to have that meeting at long last with those stakeholders, including the university, even though he has made the decision already? That would enable them to discuss the co-operation and inward investment of Rolls-Royce, Tata, Boots and other companies that are coming to Swansea. They would have made that case had he been bothered to have a meeting with them.

[Mr Hammond]

I can tell the hon. Gentleman that my officials discussed the business case for electrification to Swansea with Welsh Assembly Government officials exhaustively, but he misses the fundamental point. He talks about Rolls-Royce and Tata, and if they are looking at rail investment as a criterion for investment, they will be examining journey time savings. The IEP announcement that I have just made introduces a journey time saving of 20 minutes to Swansea. He should go back to Swansea, rejoice in that saving and pick up the phone to Rolls-Royce and Tata to tell them how it improves the case for investment in his city.

[Alun Cairns (Vale of Glamorgan) (Con)]

This is a first-class announcement on St David’s day for my constituency and the whole south Wales economy. Announcing electrification of just the main line would have been good, but to consider the valleys lines and the line to Barry Island, which is in my constituency, gives the statement gravitas.

My right hon. Friend the Transport Secretary has mentioned the inaction of the former Secretary of State for Wales, but will he outline what action was taken by the current Secretary of State for Wales in bringing about pressure for this announcement?

[Mr Hammond]

My right hon. Friend the Secretary of State for Wales and I discuss such matters all the time—I always discuss with them matters that trespass into the jurisdictions of my right hon. Friends the Secretaries of State for Wales and for Scotland—but it would be inappropriate for me to give the House details of discussions that occur between Cabinet colleagues.

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

I welcome the announcement of major investment in rail, although there is considerable disappointment in relation to Swansea. Will the Secretary of State indicate what the benefits of that investment will be in terms of jobs and economic growth, and when does he expect them to materialise?

[Mr Hammond]

If the hon. Lady is talking about the wider package, I can tell her that there are obviously many components to it. Jobs will be created through the electrification process over a number of years as Network Rail gears up to deliver that programme, and others will be created at Newton Aycliffe for the IEP. Further jobs—thousands of jobs—will be created in the UK supply chain that will support that major investment which, incidentally, is not just about delivering the UK IEP, but about Hitachi’s manufacturing and development base for its involvement in European rail in future.

In addition, of course, there will be huge benefits in the south Wales area from the electrification of the valleys lines—what economists like to call agglomeration benefits, meaning the reinforcement of the economy that happens when connectivity is improved and labour markets are deepened. Those will allow people in towns up the valleys lines, some of which, frankly, are among the most deprived in Wales, more readily to access the markets and economy of Cardiff, which is a powerhouse for the area. That will bring significantly increasing prosperity and wider opportunities for people who live in the Cardiff hinterland.

[David T. C. Davies (Monmouth) (Con)]

Had the Secretary of State announced that he was electrifying and putting a high-speed train on every branch line in Wales, Opposition Members would still object. Will he instead accept the congratulations of all those who are worried that some want Wales to become more separate? His statement is a tangible way of putting Wales at the heart of the UK. Dewi Sant will be looking down today with a glass not half full, but almost overflowing.

--- Later in debate ---

[Mr Hammond]

My hon. Friend puts it very eloquently. He has clearly spotted the glass-half-empty tendency of Opposition Members, which disappoints me. I cannot think why they would wish to score political points today.

[Helen Goodman (Bishop Auckland) (Lab)]

The Secretary of State probably knows that the first steam trains were made in Shildon, so it is quite right that the skills of the County Durham work force should be recognised in his statement. He says that he will work for financial close over the course of this year, but can he say when jobs will materialise?

[Mr Hammond]

I understand that Hitachi will issue a press release broadly simultaneously with my statement that will set out more details of its plans, but clearly, it will be unable to start building factories until financial close occurs later this year. There will then be a factory to build, which will create hundreds of temporary jobs in the area. I have heard that the owners of the industrial estate on which the factory will be built have also indicated that they will expect to build other units simultaneously on a speculative basis in anticipation of suppliers to Hitachi wanting to locate around the factory. I therefore hope that there will be significant construction job creation quite early in the programme. Then, of course, Hitachi will begin recruiting for the permanent jobs for the actual building of the trains—my guess is that this will happen later next year, but it is for the company to confirm.

[Duncan Hames (Chippenham) (LD)]

I welcome the Secretary of State’s clarification that electrification to Bristol will also take in the line through Bath and Chippenham. Can he confirm my estimation that this proposal might even bring down journey times from London Paddington to Chippenham to less than one hour?

[Mr Hammond]

It may surprise the hon. Gentleman to know that among the many destinations for which I have journey time savings, Chippenham does not appear, I am afraid. However, I will be very happy to get back to him immediately after this statement.

[Nia Griffith (Llanelli) (Lab)]

My constituents will be very disappointed that electrification will be starting in Cardiff, but not in Swansea. However, will the Secretary of State look into the franchising agreement and consider whether anything can be done so that my constituents can benefit more from reductions in journey times by having more through bi-mode trains that go all the way from London to Llanelli, Kidwelly and beyond to the Irish ferries, rather than having to change? That is the case with nearly all the trains at the moment, and it involves an enormous amount of delay and wasted time.

[Mr Hammond]

I am happy to look at the issues that the hon. Lady raises. Of course, responsibility for franchised operations is shared between the UK Government, in respect of the through services from London, and the Welsh Assembly Government, in respect of locally originating services. However, I will certainly consider her point. The IEP train fleet will give us greater flexibility.

[Mr Rob Wilson (Reading East) (Con)]

I welcome the statement, particularly the increase in passenger capacity that will result. My right hon. Friend will be aware that over the next five years Reading station will undergo a major redevelopment through Government investment. Will he ensure that all necessary works for IEP and electrification are undertaken alongside the alterations made to Reading station, because I am sure that it would result in cost savings?

[Mr Hammond]

My hon. Friend makes a very sensible point. I will raise it at my next meeting with the chief executive of Network Rail, and ensure that it is being done in a properly co-ordinated manner.

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

I welcome today’s announcement on the intercity express programme, and I look forward to welcoming the trains themselves to Newcastle in due course. Will the Secretary of State confirm that he will work with his colleagues across Government to ensure that local communities, businesses, universities and further education colleges receive the kind of support that they need to ensure that the Hitachi centre can be a platform for jobs and growth for the region as a whole?

[Mr Hammond]

The hon. Lady is absolutely right that when we get such an opportunity to reinforce our skills base and move up the value-adding curve with our work force, we have to seize it. There is already a project in Nottingham that I am hoping to visit very shortly that involves rail engineering apprenticeships, and there is another project in Crewe that I have been invited to go and see. We need to generate more of these projects in response to the investment opportunities arising. I agree completely with the sentiment that she expresses.

[Stephen Hammond (Wimbledon) (Con)]

I welcome unequivocally my right hon. Friend’s statement and its excellent news for rail infrastructure. He will be aware that ongoing designs for existing platforms are usually more cost-effective than new designs. Will he confirm to the House, therefore, that the revised Agility proposal represents better value for the British taxpayer both in what it represents and in cost terms?

[Mr Hammond]

The value-for-money appraisal certainly shows that the revised Agility proposal represents the highest value for money of the proposals that we have considered for the replacement of the inter-city diesel express trains. It represents a strong value-for-money case and is affordable. Hitachi has responded in an exemplary way to the Government’s commitment to high-speed rail—that changes the dynamics—and to the UK’s fiscal situation in order to ensure that we can go ahead with the programme.

[Stewart Hosie (Dundee East) (SNP)]

I welcome both the statement and having had early sight of it. I agree with the Secretary of State that the purchase of the locomotives will represent a multi-billion pound investment that, as he said, will underpin the provision of inter-city services. May I ask him whether the decision is for bi-mode hybrid trains or for a mixed fleet of diesel and electric trains, and whether sufficient numbers will be bought on time to guarantee the continuity and frequency of direct services from London on the east coast main line north of Edinburgh, through Fife, Dundee, Angus and Aberdeen?

[Mr Hammond]

It is not about diesels. There will be no diesel traction locomotives in the mix; there will be bi-mode electric-diesel trains and all-electric trains. The services to Aberdeen and Inverness will be provided by the bi-mode trains, running straight off the wires at Edinburgh and on to the existing routes, so that service will be protected.

[Mr Wayne David (Caerphilly) (Lab)]

In the spirit of St David’s day, I respectfully remind the Secretary of State that St David probably lived in west Wales. Has he made any assessment of the extent to which west Wales and Swansea will lose out from his partial electrification of the south Wales line?

[Mr Hammond]

Many people coming from England will access west Wales through Cardiff, and journey times to Cardiff are being reduced. Everybody would like a high-speed railway running right to their front door, but as we—[Interruption.] Okay, to the next street. As we progressively modernise our infrastructure with electrification and new train services, the impact will be felt by all locations. Even those locations not directly benefiting from the new, faster services will benefit from the savings in time, and I am sure that the hon. Gentleman’s constituents in west Wales will benefit significantly from today’s announcement.

[Neil Carmichael (Stroud) (Con)]

In congratulating the Secretary of State on a first-class example of investment in infrastructure that, in the context of protecting the environment, will bring jobs and further growth, may I remind him that, as my hon. Friend the Member for Cheltenham (Martin Horwood) said, it also strengthens the case for taking action to continue doubling the line from Swindon up to Kemble and Stroud?

[Mr Hammond]

I am well aware of the vigorous campaign to redouble the Kemble to Swindon link, and I know that the case will continue to be made for it as a major investment programme, and also for its possible inclusion in Network Rail’s next control period.

[Gavin Shuker (Luton South) (Lab/Co-op)]

Following the delivery of the IEP, will the Secretary of State tell the House how many ageing InterCity 125s will still be on the network and for how long?

[Mr Hammond]

Only a small number of diesel 125s will remain on the network, and they will be serving the route down to Penzance in Cornwall. All the other 125s will be replaced by bi-mode trains under today’s proposal. I cannot say for how long those diesel 125s will remain on the network. There are no specific proposals to replace them at the moment, but I would remind the hon. Gentleman that the intercity express programme was always conceived as a commitment to a firm fleet of trains as the first phase, with options on further trains for future phases. It will therefore be for my successors at some point in the future to consider whether the remaining InterCity 125s should in due course be replaced by bi-mode IEPs.

[James Wharton (Stockton South) (Con)]

It is a matter for hon. Members whether they see their glasses as half empty or half full, but I am pleased to see the Government busily topping glasses up. As a representative of a north-east constituency, I am also pleased to say that last week we had the excellent news that Teesside Cast Products was being sold to SSI—Sahaviriya Steel Industries—and now we have today’s announcement from the Government. Does my right hon. Friend agree that this is a vote of confidence—not just by the private sector, but by the Government—in the skills and abilities of those working in manufacturing right across the north-east?

[Mr Hammond]

I absolutely agree with my hon. Friend: it is a vote of confidence in UK manufacturing. This Government are committed to rebalancing the economy, reviving manufacturing and reasserting the value of Britain’s manufacturing skills base, and both announcements play to that theme.

[Mr Clive Betts (Sheffield South East) (Lab)]

Let me bring the Secretary of State to the question of the midland main line—the forgotten line in this country—and ask him about the ageing high-speed trains, as my hon. Friend the Member for Luton South (Gavin Shuker) has just done. Those trains were second-hand when they were introduced on the line. Can he give a commitment that we will actually see bi-mode trains introduced on the midland main line? We have the immediate advantage of being able to use the electric line up to Bedford, allowing electrification of the rest of the line progressively and incrementally in the future.

[Mr Hammond]

The announcement today does not include provision for the midland main line. The hon. Gentleman mentioned bi-mode trains, and I am sure that he has also been lobbying for the electrification of the line, as have many other midlands Members. The debate about the line’s future also has to take account of the implications of High Speed 2, however. Once the High Speed 2 consultation, which began yesterday, has been completed and the Government have announced their definitive plans later this year, it will be much easier to plan for the long-term future of the midland main line.

[Karl MᶜCartney (Lincoln) (Con)]

This might not be quite as headline-grabbing as my right hon. Friend’s statement today, but he will be aware that, on 22 May this year, my constituents will see the reintroduction of a direct link to London. However, this will be only a single daily service—once up and down. Does he think that the old diesel stock whose replacement he has announced today could be put to good use in increasing the level of service to and from my constituency?

[Mr Hammond]

My hon. Friend is certainly right to say that one of the benefits of any announcement of new rolling stock is that it creates a larger pool of retired rolling stock and thus creates greater opportunities for train operators to acquire rolling stock leases at sensible prices. This helps to change the dynamics of the rolling stock market for the benefit of passengers and train operators.

[Paul Flynn (Newport West) (Lab)]

A word of croeso for the report, but my constituents are still greatly irritated by the fact that the Ebbw Vale to Cardiff line, which was reopened by the previous Government and is hugely successful, passes through the city of Newport but does not stop at the main station there. This affects many passengers who normally commute to Newport and whose access to the shopping centre there is now being denied. When can the appropriate link be put in place?

[Mr Hammond]

I am looking at my map, and, as the Minister of State, Department for Transport, my right hon. Friend the Member for Chipping Barnet (Mrs Villiers) reminds me, it is a matter for the Welsh Assembly Government to specify services on the Wales and west franchise.

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

Will my right hon. Friend ensure that, should the preferred consortium for the IEP contract be unable to deliver all that is has offered, other bidders in the procurement process, including Bombardier Transportation, which has a site in my constituency, will be given due and proper consideration in any future procurement that might result from such a situation? Will he also ensure that its strong, advanced technical expertise is taken into account?

[Mr Hammond]

My hon. Friend makes a plea for Bombardier, which has a site in his constituency. Bombardier is involved in programmes for the delivery of other trains in the United Kingdom, and I think that it has a very bright future in the UK train market. The IEP project is a train availability contract to supply trains, ready for use and fully maintained. Hitachi or the Agility consortium will therefore be entering into an obligation to deliver specified numbers of trains ready and available for use in accordance with that contract, and it will be a matter for them to ensure that those trains are made available.

[Stephen Williams (Bristol West) (LD)]

This statement will be warmly welcomed in Bristol. As an émigré valleys boy, may I also point out that it will be welcomed in my home village of Abercynon, where the world’s first railway journey ended in 1804? The Secretary of State mentioned that the line from Bristol Temple Meads to Bristol Parkway was to be included in the electrification plans. Will that open the window for looking at the business case for electrifying the Severn Beach line, which the Rail Minister will be visiting with me on Friday?

[Mr Hammond]

I always learn something in these situations. I thought that the world’s first railway journey started somewhere up near Darlington, so if it ended in the Welsh valleys, it was doing extremely well. My right hon. Friend the Rail Minister will be happy to discuss this matter further with my hon. Friend. I know that she has already discussed the proposal with him and is looking at the business case for it with a view to its inclusion in future programmes.

[Mr Philip Hollobone (Kettering) (Con)]

May I press the case for the midland main line and encourage the Secretary of State to look at the introduction of upgraded, bi-mode inter-city trains on that line, not least because that might well facilitate the reintroduction of an inter-city service between Kettering and London, which was taken away when it was effectively downgraded to an outer suburban service?

[Mr Hammond]

I can only say to my hon. Friend what I said to the hon. Member for Sheffield South East (Mr Betts)—that the future use of the midland main line is bound to change if the high-speed rail network proposal goes ahead. By the end of this year—once the high-speed network is to be built, if that is the decision taken, following the consultation—we will be in a much better position to talk about the future plans for the midland main line and, indeed, for the east coast and west coast main lines.