Oral Answers to Questions

Lord McLoughlin Excerpts

Thursday 18th October 2012 Commons Chamber

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

2. If he will consider abandoning the planned privatisation of the East Coast Mainline rail service.

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

Following the tabling of this question, I considered what the hon. Lady is asking me to do, but I have decided to follow the policy set by the previous Government, who believed in franchising.

[Chi Onwurah]

Since 1997 we have seen Great North Eastern Railway fail and National Express fail, but now we have East Coast trains returning £187 million to the taxpayer. Why on earth would the Minister want to swap that for the unmitigated disaster of the west coast tender? Is not that free-marketism gone mad?

[Mr McLoughlin]

I draw on what the shadow Lord Chancellor, the right hon. Member for Tooting (Sadiq Khan), said when he was a Transport Minister:

“The rail franchising system was examined by the National Audit Office last year, and was found to deliver good value for money”

and “steadily improving” services. He continued:

“Passenger numbers are at their highest levels since the 1940s,”

and

“punctuality is more than 90 per cent.”—[Official Report, 1 July 2009; Vol. 495, c. 425-6.]

I agree with what the right hon. Gentleman said then, and I think it is the right way forward.

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

I congratulate my right hon. Friend on continuing the policies of this Government as well as the last, but there are lessons to be learned for both the east coast and the west coast franchise. Will he ensure that the product of the east coast main line service will remain the premier service in the land?

[Mr McLoughlin]

I want all services to be good services and to serve hon. Members’ constituents, but of course we have lessons to learn—lessons from the way in which certain franchises were unable to continue under the previous Government. I made a statement to the House on Monday in which I said that we would learn those lessons. Two reviews are being undertaken, and I look forward to receiving their representations.

[Lilian Greenwood (Nottingham South) (Lab)]

The Secretary of State continues to claim that privatising the east coast rail service is necessary to deliver new investment, but he knows full well that both the planned improvements for the line and the new generation of inter-city trains are being funded by the taxpayer. In the light of the west coast fiasco, will he rethink his opposition to allowing the east coast line to be run as a not-for-private-profit service, not least since, as my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) said, it returned £187 million to taxpayers last year—money that, from next year, will have to be split with shareholders?

[Mr McLoughlin]

The hon. Lady is rewriting history: the simple fact is that the previous Government were committed to franchising on the east coast main line—[Interruption.] The hon. Member for Bolsover (Mr Skinner) says he is not bothered about that any more; I shall remind him of things that he supported in the past but now attacks.

[Mr Dennis Skinner (Bolsover) (Lab)]

Who supported the nationalisation of rail?

--- Later in debate ---

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

The Government are committed to an extensive rolling programme of electrification; by the end of the decade, around three quarters of passenger miles travelled in England and Wales will be on electric trains. Electrification will deliver trains that are cleaner, quieter, faster and cheaper to operate, with more capacity for passenger and freight customers.

[Mr Buckland]

Electrification of the great western line through Swindon and beyond will allow increased train capacity. Will my right hon. Friend ensure that the need for more seats to allow more passengers to use the service in comfort will be at the heart of the greater western franchise process when it is reopened?

[Mr McLoughlin]

Indeed it will. I know that my hon. Friend has campaigned for greater capacity on that line for some time. I believe that electrification will lead to an increase of 20% in seating capacity on the line by 2018.

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

I welcome the Secretary of State to his job. As he will know, I welcome the go-ahead for the tram train pilot project between Sheffield and Rotherham. The trams will not be delivered until 2015 and there will probably then be a couple years of evaluation. If the scheme is successful—I am sure that it will be—rolling it out will depend on having underused heavy rail lines that are electrified. Will he bear that in mind when considering future electrification?

[Mr McLoughlin]

I will certainly bear in mind the hon. Gentleman’s comments. He has always fought hard for an improved service for his constituents and in the Sheffield area. I will look closely at what he has said.

[Ian Swales (Redcar) (LD)]

14. Does the new Secretary of State recognise the need for electrification in the Tees valley so that we can have a metro service to connect the large conurbation together?

[Mr McLoughlin]

I take that as a bid, and it is one that I will look at in more detail. I am sure that I will hear much more about it from my hon. Friend.

[Chris Bryant (Rhondda) (Lab)]

We in the south Wales valleys are delighted that those lines are to be electrified, but can the Secretary of State tell us when that work will start and how much faster journey times between Treherbert, Llwynypia and Cardiff will be? If he is unable to pronounce those place names or tell us today, will he please write to me?

[Mr McLoughlin]

I pay tribute to my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) for managing to get electrification for Wales into the original programme, and I am very glad that that is something that this Government will—

[Chris Bryant]

I welcomed it.

[Mr McLoughlin]

I know that the hon. Gentleman welcomed it. I am glad that this Government will give us something that he never managed to achieve when he was in government. I think that it will start in 2015.

[Neil Carmichael (Stroud) (Con)]

18. In view of the need for strategic planning, will the Secretary of State bear in mind that everyone would like electrified railway lines and that provision should be made to give comfort to investors and for infrastructure developments?

[Mr McLoughlin]

As I said earlier, electrification brings many advantages to the rail network, so what my hon. Friend asks for will be delivered by electrification. The plans we have put forward are the most ambitious put forward by any Government.

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

South-west MPs met yesterday to discuss the pause in the greater western franchise. One of the concerns raised was the impact of the current ring-fenced electrification programme, which had been built into people’s bid plans. The issue was whether we would in fact see a worse service as a result of those electrification plans, as we have been unable to take the franchise bid forward and there are new timetables because of the works required for electrification.

[Mr McLoughlin]

As with any major infrastructure project, there will be delays while that is taken forward, but ultimately there will be a far better service.

[Nick de Bois (Enfield North) (Con)]

4. What recent representations he has received on investment for a third railway track between London, Liverpool Street and Brimsdown.

--- Later in debate ---

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

8. What the cost to the public purse has been of cancelling the award of the west coast main line rail franchise to date.

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

Spend to date on contingency planning by Directly Operated Railways is about £1 million. The cost of reimbursing bid costs to the four bidders is estimated to be about £40 million.

[Luciana Berger]

I thank the Minister for his response. He used the word “estimated”. How much does he intend to pay to First Group, whose shares have fallen by 20% since this fiasco began? How can he be sure that he will be able to protect taxpayers from further and significant liability?

[Mr McLoughlin]

I referred in my answer to the estimates that I gave to the House on Monday. They are the best available estimates at the moment, and that is why I will stick by them.

[Sir Tony Baldry (Banbury) (Con)]

Should not the Opposition be enjoined first to cast the beam out of their own eyes, so that they are better able to take out the mote from their brother’s eye? From the way they bang on about this, one would have thought that Labour in government never wasted a single penny, but the National Audit Office found that it wasted £40 million on an asylum accommodation centre in my constituency where a single sod was never turned and a brick never laid, and we never had a single apology for that.

[Mr McLoughlin]

rose—

[Mr Speaker]

Order. Let us stick to the west coast main line.

[Mr McLoughlin]

In the light of that direction, Mr Speaker, I am not sure how to answer the question. I am responsible for what goes on at the Department of Transport, but if I moved on to the money that was wasted by the previous Government, I think I might need an Adjournment debate.

[Derek Twigg (Halton) (Lab)]

I welcome the Secretary of State and the new members of his team; I am sure that they will do a very conscientious job.

What has been the cost of the consultants and legal advisers employed by the Department in the run-up to the legal case?

[Mr McLoughlin]

I do not have the exact figures at the moment. My right hon. Friend the Minister of State answered some written questions on the matter yesterday, and a wide range of figures are available. The figures I gave in response to an earlier question are £40 million and £1 million.

[Nigel Mills (Amber Valley) (Con)]

Will the Secretary of State confirm what the cost would have been of proceeding with a flawed tendering process and awarding that contract? On the same basis, will he also reconsider the Thameslink rolling stock contract, to make sure that there has been no mistake with that either?

[Mr McLoughlin]

I assure my hon. Friend that I asked those questions rigorously in the Department and I have been assured that this was a wholly different process. As I have said, I am awaiting the outcome of the two inquiries that I have set up.

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

Will the Secretary of State admit that taxpayers are set to be stung for far more than the £40 million he is paying back to bidders for the west coast franchise, because what he has not included in that figure is the cost of paying back bidders for the suspended Great Western, Essex Thameside and Thameslink franchises? Will he now come clean to taxpayers about exactly how much of their money will be poured down the drain as a result of his franchising fiasco?

[Mr McLoughlin]

I have given the figures that are available to the House. The other contracts to which the hon. Lady refers are on hold—they have not been let.

[Maria Eagle]

Is it not the truth that the cost to taxpayers is likely to be tens of millions of pounds more by the time the Secretary of State has Britain’s rail services back on track? He will hand millions over to private train companies; millions will be spent running three competitions for this franchise when he should have been running only one; and millions more will be lost if companies decide to sue the Government for the losses that his Department’s incompetence have caused them. Instead of the Department for Transport’s own board investigating itself, do not taxpayers deserve a truly independent inquiry into what went wrong and who was to blame for so much of their money being poured down the drain?

[Mr McLoughlin]

When I was told about this incident and the mistakes that were made, I ordered two immediate inquiries. I wanted to get to the bottom of it as quickly as possible, and that is what I have done. I am sure that we will not be short of a number of inquiries, which will take place subsequent to the Laidlaw and Richard Brown inquiries. I expect that the Public Accounts Committee will want to look at the issue.

[Karen Lumley (Redditch) (Con)]

10. What recent assessment he has made of the potential benefits of High Speed 2 to businesses in Birmingham and its surrounding areas.

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

HS2 will transform journey times, capacity and connectivity between the Birmingham stations and Leeds, Manchester and London, and will release substantial capacity on the existing rail network. This will help the wider west midlands area to fulfil its economic potential.

[Karen Lumley]

Will my right hon. Friend tell the House how many jobs will be involved in the construction and operation of the first phase of the railway to the midlands?

[Mr McLoughlin]

A number of opportunities will become available as a result of HS2. We expect there to be 9,000 jobs during construction and 1,500 permanent operational jobs, as well as a huge amount of regeneration in the areas served by HS2.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

HS2 is important to Scotland as well as those places south of the border mentioned by the Secretary of State. Will he update us on what discussions he has had with the Scottish Government on the plans for HS2 to provide benefits to Scotland as well?

[Mr McLoughlin]

I am due to meet Scottish Ministers in the not-too-distant future, and I have had one phone conversation with the First Minister. Last week I announced that we will undertake a study to take HS2 further north into Scotland.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

On 7 July 2011, in a letter on transparency to all the Secretaries of State, the Prime Minister wrote:

“As you know, transparency is at the heart of our agenda for Government.”

The Department and the Cabinet Office are currently concealing information and refusing to publish the Major Projects Authority report on HS2. Will the Secretary of State now show that the Prime Minister’s words are not meaningless when it comes to HS2 and publish that report immediately?

[Mr McLoughlin]

HS2 will be the subject of a huge amount of parliamentary time as we prepare the hybrid Bill and bring it before Parliament in the next Session.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Arguably one of the benefits of HS2 is that it will create extra capacity on the conventional network. However, these services are highly unlikely to be profitable and will require extra subsidy. What calculations has the Department made about the extra cost of that subsidy and the subsequent Barnett consequentials that the Welsh Government will be entitled to?

[Mr McLoughlin]

We are some way off getting to that stage. I am dealing with a number of other figures at the moment, so I will take away the hon. Gentleman’s question and think about it a little more deeply, rather than give a rushed answer at the Dispatch Box.

[Andrea Leadsom (South Northamptonshire) (Con)]

Is my right hon. Friend aware of the concerns of constituents up and down the route of the line who have been unable to access the exceptional hardship scheme? When will he start his consultation on fair compensation? We said that we would not allow anybody to have to pay with their own assets or in terms of their own life, and yet that has proven to not be the case.

[Mr McLoughlin]

I well understand that point and the opposition that HS2 has generated. Any major infrastructure brings about a lot of opposition. I hope to be able to publish the Government’s consultation on compensation in the not-too-distant future.

--- Later in debate ---

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

In addition to my recent statements on franchising, last week I announced that passengers will benefit from a reduction of up to 2% in the planned rises in many train fares. That will benefit more than a quarter of a million annual season ticket holders and more weekly and monthly ticket holders. I also announced £170 million for 57 vital road schemes to boost the economy, reduce congestion and improve safety. Earlier this month the Minister of State, my right hon. Friend the Member for Chelmsford (Mr Burns), announced the introduction of new rules better to protect holidaymakers from losing out if their travel company fails, giving UK holidaymakers a simple, straightforward way to know what the financial protection for their holiday is.

[Craig Whittaker]

Metro in west Yorkshire has commissioned a bus service for the upper Calder Valley, a rural community, which for the past year has been served by an incredibly unreliable and poor service. Can the Secretary of State confirm whether there is a process in place for holding a commissioner to account when they do not take action on poor performance against contracts?

[Mr McLoughlin]

I sympathise with the obviously frustrating experience that my hon. Friend’s constituents are having. I know that he has been in correspondence with the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), who leads on the matter in the Department. The Government have provided an extra £10 million of funding this year to help kick-start the development of community transport services in rural areas, and west Yorkshire received £385,000 of that. I am interested in hearing about the experiences of my hon. Friend’s constituents, however, and we will look into the matter.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

On Tuesday the Road Safety Foundation, chaired by Lord Dubs, launched its annual report. It stated:

“Simple attention to safety engineering detail has resulted in extraordinary cuts in road deaths and serious injuries”.

Other leading countries in road safety are committed to improving the safety star rating of their national road networks. What emphasis are our Government placing on that?

[Mr McLoughlin]

We place a lot of emphasis on it. I spent a morning a few weeks ago with road traffic officers in the west midlands, looking at how they operate their managed motorways. They have had great success in reducing accidents on the M42 since it has become a managed motorway. Road safety is incredibly high on our agenda, and as I said, we have announced £170 million for relieving pinch points, which I hope will also help safety.

[Mary Macleod (Brentford and Isleworth) (Con)]

T2. I welcome the Government’s decision to set up a commission on aviation capacity. I hope that it will create a new, innovative solution to capacity needs and realise that a third, fourth and fifth runway at Heathrow is not the answer. May I urge my right hon. Friend to encourage the commission to report as quickly as possible?

[Mr McLoughlin]

I believe that setting up the commission was the right way to move forward. I hope to be able to announce the rest of the commission’s membership in the not-too-distant future. My hon. Friend will be able to make recommendations to the Davies commission, which will bring interim recommendations to the Government in 2013. Although some people say that it will take rather a long time, it will not take that long once it gets under way.

[Heidi Alexander (Lewisham East) (Lab)]

T3. Given the Department’s abject failure to manage the franchise process for the west coast main line, what are the Secretary of State’s views on the possibility of Transport for London being the franchising authority in future for the London parts of the south-eastern network?

[Mr McLoughlin]

I am due to meet the Mayor of London in the next few hours, and that may be one issue that he wants to bring forward to me. People will have different views about whether that would be the right way forward.

[Mark Garnier (Wyre Forest) (Con)]

T6. When addressing the thorny issue of airport expansion, will the Minister look carefully at the huge economic benefits that can be offered at Birmingham airport? Not only is there extensive local support for expansion, but it is an excellent airport.

--- Later in debate ---

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

To return to the subject of the west coast main line, when the Secretary of State made a statement on Monday, I made him aware of a figure given to me by insiders in the industry that suggested a cost of at least half a billion pounds as a result of this debacle. Has any application to the Treasury for additional contingency funding been made as a result?

[Mr McLoughlin]

No.

[Zac Goldsmith (Richmond Park) (Con)]

British pilots in my constituency are concerned that EU proposals on pilot flight time limitations will weaken the current rules and that, as a result, flying will become less safe. Instead of lowering our standards to harmonise with the EU, should not the EU be raising its standards to harmonise with ours? Failing that, will the Department at least explore with the British Air Line Pilots Association additional safety measures to cover those areas that would otherwise see standards drop?

[Julie Hilling (Bolton West) (Lab)]

As a directly operated railway, the east coast main line returned £187 million to the taxpayer last year. How much money will Virgin pay to the taxpayer during the period of extension to its west coast main line franchise?

[Mr McLoughlin]

Negotiations are ongoing.

The Minister for Women and Equalities was asked—