Network Rail

Louise Ellman Excerpts

Thursday 2nd February 2012 Westminster Hall

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

I congratulate the hon. Member for St Albans (Mrs Main) on securing this debate. She raises some extremely important issues. I know that the points that she has made will be repeated by other hon. Members who have similar experiences.

This debate takes place at an interesting time. Although we are focused on Network Rail, we are awaiting the Government’s proposals on the future of the whole rail system. Network Rail is an intrinsic part of that system; it has to enable the train operating companies to work and ensure that there is safety on the line and that trains are punctual. None the less, it cannot be considered entirely in isolation from the whole rail system. We must therefore look at how the train operating companies operate and at the role of the Department for Transport.

We must not forget that, over the past decade, rail has been a success story. More and more people use rail, which brings its own problems of overcrowding and how to address increased capacity. We want to encourage more freight on to rail. Again, that leads to discussions about how more capacity can be provided and whether that can be done without crowding out much-needed passenger services as well.

There can be no dispute over the fact that the rail system costs a lot more than it should. The McNulty report is the latest one to draw attention to that. It says that our rail system as a whole costs around 30% more than comparable European rail systems. Much—not all—of that can be attributed to Network Rail.

[Mrs Main]

The hon. Lady is absolutely right to expand that point. Not only is access more expensive, but the licences are more expensive for the train operating companies and they pass on the cost to the travelling public. Network Rail’s high costs mean that passengers are paying too much.

[Mrs Ellman]

I thank the hon. Lady for her comments. She is correct. However the service is organised, it is a public service and it has to be so run. Whatever money is in the system ends up costing the taxpayer or the fare payer. Over recent years, there has been a shift in who pays for using the train. I am talking about the shift from the taxpayer to the passenger. Whatever money is in that system eventually comes out in the cost of the ticket, which is causing so much concern at the moment.

Network Rail says that it is addressing the McNulty recommendations, looking at being more competitive and reorganising itself. It is far too soon to say whether that will be sufficient, or indeed whether it will address the most important issues that have been raised. Some action has been taken in relation to the train operating companies. There will be longer franchises. For example, the franchise for the west coast main line will be for a much longer period. That could be part of the solution, but we need to see the Government’s proposals and vision for the whole rail system before it can be considered.

The hon. Lady referred to this week’s court case when Network Rail admitted its liability for two tragic deaths in 2005, when Olivia Bazlinton, aged 14, and Charlotte Thompson, aged 13, were killed on a level crossing. It emerged only last year that Network Rail had had a risk report in 2002 recommending the installation of new gates that would lock automatically when a train approached. That in itself is bad enough, but it seems that the documents had been suppressed and not made available to the police previously. Network Rail has now admitted liability. It is being charged, and it has admitted guilt. Those tragic deaths should not have happened. They were terrible, as was the cover-up afterwards. I hope that in its statement now Network Rail is more open and that it will change to a new approach.

The Office of Rail Regulation strongly criticised Network Rail and is considering whether lack of punctuality and more late trains have been a breach of its licence. It has already raised safety issues, particularly the lack of adequate reporting of safety incidents on lines. Network Rail points to cable theft as a reason for delays, and that is a factor, but it is not the only one. Only last week, the Transport Committee published its report on cable theft on the railways, and said that Network Rail could do more to make such thefts more difficult, so it has some responsibility there.

The hon. Lady made many valid points about Network Rail’s accountability. However, I recall how Network Rail came to be set up. I remember clearly that it was preceded by the conventional private sector company, Railtrack, which went into administration. It collapsed after absorbing endless amounts of taxpayer’s money and paying out bonuses to its private shareholders while letting the nation down. Structure and ownership are relevant, and we must remember that the wholly private sector company did not deliver. We must consider how the present company operates and how it could operate better.

There has been much criticism about lack of accountability in Network Rail. It has a board of around 100 members, which is not a good way to secure accountability. Efforts have been made to change how it is organised to introduce more accountability. For example, the Co-operative party’s people’s rail campaign is trying to involve more members of the public and users of the service with a much smaller board to which Network Rail would have to answer. That is one option. Certainly, the way in which it operates now is not satisfactory and must be re-examined.

The next spending period is 2014 to 2019, and we will know in July what rail projects have been proposed or agreed for investment. There are long lists of necessary investment projects from different parts of the country, including the northern hub, which is badly needed, the electrification programme and many others. If we do not secure value for money from investment, we will not receive the maximum investment in rail. That is extremely important.

The Transport Committee invited the new chief executive of Network Rail, David Higgins, to the Committee when he was first appointed, and we asked him questions about value for money, accountability, safety and other matters. We intend to repeat that, and to recall him in the near future, when we will raise issues of accountability, value for money and how Network Rail invests in the public interest. We will certainly take note of the points made today by the hon. Lady and other hon. Members.

[Mrs Main]

I am extremely pleased that the Select Committee will call David Higgins back. During his “Panorama” interview last month, he said that he would release more figures and data by the summer to show Network Rail’s transparency. Is she aware of that, and will she be recalling him before or after that?

[Mrs Ellman]

A date has not yet been fixed, but all the issues will be taken into consideration. It is important that hon. Members recognise that, whatever an organisation’s structure, Select Committees perform an important role in trying to bring accountability to people who are in charge of public services. We have stated that we think that Network Rail should be subject to freedom of information requests. We will pursue matters of public concern and matters that hon. Members raise today and on other occasions, and we will do so to the best of our ability.