Rail Investment

Louise Ellman Excerpts

Thursday 25th November 2010 Commons Chamber

[Mr Hammond]

I thank my hon. Friend for that question. He is quite right to observe that we must get the balance right between building large new infrastructure projects and maintaining existing services. I have been out this morning to the site of the Blackfriars station development and seen just how incredibly difficult it is to build such a major project on a running railway line with trains passing backwards and forwards. It is very complex, and allowing a little extra time will ensure that we do not have catastrophic disruption during the programme.

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

I welcome the news of investment in rail, although I am concerned about the three-year delay in the electrification of the Liverpool-Manchester-Blackpool line as well as the uncertainties on electrification of the great western line. Will the Secretary of State explain the percentage growth in rail that he is planning within these figures so that rail can grow without overcrowding and without the overpricing that drives people off the railways?

[Mr Hammond]

I do not know where the hon. Lady gets the idea about three years’ delay with north-west electrification. As I said, the Manchester to Newton-le-Willows section will be completed in 2013. Work will start next year. The team that is doing the work will then roll on to complete the electrification of the Liverpool-Manchester section and finally the Preston-Blackpool section. It will all be completed by 2016.

Let me explain the time scale. Electrification will allow the electric carriages released by the delivery of the new Thameslink carriages to be deployed. There is no point completing that electrification, except for the section from Manchester to Newton-le-Willows, until those electric carriages are available. The timetabling is perfectly logical and the early completion of Manchester to Newton-le-Willows will allow brand-new electric trains to be operated on the Manchester to Scotland routes.

The hon. Lady asked about capacity. The total announcements on Crossrail, Thameslink and the additional 650 carriages to be delivered before 2015 will amount to a 17% increase in the capacity of the network.

Transport (CSR)

Louise Ellman Excerpts

Thursday 25th November 2010 Westminster Hall

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

I am delighted to have this opportunity to discuss the outcome of the comprehensive spending review in relation to transport. I am pleased to see the Minister of State, Department for Transport, in her place this afternoon. I look forward to hearing her comments and, hopefully, her replies to the questions that I raise. I am also pleased to see here today my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick), and I congratulate him on his new position as shadow Transport Minister. He will bring to the post considerable expertise in the transport field.

I welcome the Government’s recognition that transport infrastructure is vital in supporting economic growth. The Department has described it as an engine for growth. Repeated statements and announcements have emphasised the Government’s commitment to transport, and long-term investment in transport, in supporting our economy. Indeed, good transport links are essential to the movement of goods and people both locally and around the country. We cannot have a successful economy without a good transport infrastructure. However, we need good infrastructure throughout the country. Although I support continued investment in transport in the south and south-east, it must not be at the cost of investment in the north and other parts of the country. I will return to that theme a little later on.

I support what the Government are saying about the importance of investing in transport infrastructure for our future. Looking at the detail of the comprehensive spending review in relation to transport, however, it is apparent that there are many important questions that need to be asked and pursued.

In relation to rail, I am pleased that some commitments previously entered into have been maintained; indeed, it would have been very difficult to abandon them. I am particularly pleased that the allocation to Network Rail and to rail, 2009 to 2014, has been maintained, and that the essential part of the investment in Crossrail has also been honoured. A saving of £1 billion has been found. None the less, that cannot disguise the fact that there are to be major cuts to the transport budget.

According to the Department for Transport’s own figures, the overall cut over the four years of the comprehensive spending review comes to 15% in real terms overall. Capital spending is down 11% and resource spending down 21%. Those are major cuts and come on top of the in-year cuts in 2010-11.

[Martin Horwood (Cheltenham) (LD)]

The hon. Lady makes an interesting point. The Labour party submission to the comprehensive spending review suggested that cuts in unprotected Departments such as transport should average no more than 20%. Actually, they have averaged out rather less than that and the Department for Transport significantly less. If she is arguing for even lower cuts in transport budgets, which Departments does she suggest should make greater ones?

[Mrs Ellman]

The purpose of today’s debate is to focus on transport and the implications of the comprehensive spending review for transport services. Indeed, that is the remit of the Transport Committee, so I am concentrating on transport today.

According to the Passenger Transport Executive Group, capital funding for local transport outside London was cut by 19% in 2010-11. It is true that the outcome could have been worse, and comparisons have been drawn with other Departments, but that does not hide the severity of the cuts that will be put in place. There are to be new funds from which transport projects could be supported. The regional growth fund, which started off as a business fund to replace the budgets of the regional development agencies, has been expanded to include transport and some housing projects, and there is to be a local sustainable transport fund. There is no way in which those two funds can even start to replace some of the major cuts that are contained in the comprehensive spending review figures.

At the moment, my Committee is considering the relationship between spending on transport and economic growth. One issue it is considering is the distribution of transport investment around the country. Three times as much transport investment per head is made in London and the south-east as in the northern regions and the midlands. How will the comprehensive spending review impact on the distribution of that transport investment? Will such disparity be reduced or increased? I am very interested to know the answer and whether such an assessment is thought to be important. In relation to budgets, it is extremely important to consider the impact on places around the country as well as nationally.

Many transport schemes are strategic rather than local in nature. In the past, business-led regional development agencies, working with Government offices for the regions, have enabled local government, working with business, to decide on regional priorities and to make representations to Government. That will end. The Secretary of State for Transport has made it clear that the proposed local economic partnerships will not be sufficient on their own to replace those arrangements. He told the Transport Committee only yesterday that he thought that local economic partnerships—I do not know whether he knew exactly how they would be put together—would need to work together, or some other arrangement might be required to look at those very same projects. To my concern, he also said that he did not think that that would be achieved until the end of the Parliament. If those alternative arrangements happen and they do not take place until the end of the Parliament, will the Minister tell us how regional rather than local priorities will be determined? Will the decisions on such projects become centralised? What are the arrangements to be? We cannot wait until the end of the Parliament to know the answers.

Let me turn to roads investment. There are some big questions to raise on the implications of the Budget on roads. The budget for road maintenance is to be reduced by 20%, which is a big reduction. We are told that that will be achieved by efficiency savings rather than by cutting back on important maintenance. We all know that if routine maintenance is not done when it is required, a lot more will be required to be spent at a later date. What kind of mechanisms are in place to monitor how that reduction is to be met? Will it be through efficiency savings or will it mean that important maintenance on our roads is simply not done?

The Highways Agency’s capital budget is to be cut by around 50%. That is also a matter of great concern. Seven schemes have been cancelled and the much needed upgrade of the A14 has been sent back to the drawing board. Does that mean the end of major new road-building in Great Britain? It would be helpful to know whether the major cutbacks in that sector are to do with the problems of our times—the Government’s wish to move very quickly to remove the deficit—or a basic change in transport policy.

[Mr John Leech (Manchester, Withington) (LD)]

Does the hon. Lady accept that, at a time when money is tight, it is better to invest in public transport than in roads?

[Mrs Ellman]

It is important to keep a balance in spending. I certainly support continued and, indeed, increased investment in public transport. However, there may be particular road schemes that are very significant to particular areas or that are important to strategies to support economic development in certain parts of the country. Therefore, I would not rule out any particular type of investment, but I am certainly a supporter of investment in public transport.

The Secretary of State announced that 66 major local authority road schemes, which are due to cost £1.7 billion, are competing for more than £900 million-worth of funding. Will the Minister tell us what kind of result she expects to come from that great reduction in funding? Will priority be given to strategic schemes? If so, how will that be assessed and monitored?

Rail is a great success story. During the last decade, rail patronage has increased in a very dramatic way. More and more people want to use rail. Unfortunately, rail’s popularity has not been matched by the provision of sufficient or adequate rolling stock to meet that increased need. Therefore, while we have more and more people using rail, we also have more and more overcrowding and I think that we have seen the development of a rather complacent attitude to the health and safety issues related to that overcrowding.

This week, discussion has focused on the concerns raised about the proposed increase in train fares. The coalition agreement spoke about the need for

“fair pricing for rail travel.”

It now seems that that “fair pricing” means that regulated fares will be increased in the future not on the basis of the retail prices index plus 1% but on the basis of RPI plus 3% from 2012 onwards. The Government tell us that that is in order to fund much needed investment in rail.

The Association of Train Operating Companies presented such increases as average increases. However, average figures are meaningless to the individual wishing to embark on a rail journey. Already, increases of 13.8% and 9.3% have been reported as planned increases when the new policy comes into force. A lot more should be done also to provide much greater clarity about rail fares, with much greater openness about how cheaper fares can be obtained without the complexities and difficulties of interpreting the rules of different train companies on what constitutes peak-hour travel, so that travel can be made easier for more people.

There is a consequence to increasing rail fares beyond the difficulties it causes individuals, for example in getting to work. The Campaign for Better Transport estimates that fares could be 31% higher by 2015 than they are today. One result of what may well be pricing people off the rail network is that more people may go back to their cars, at a time when we are trying to encourage people to leave their cars and make use of public transport. Indeed, the Government estimate that there will be 4% fewer trips by rail than there would otherwise have been as a direct consequence of the planned fare increases.

Our concern is partly about the economic impact on individuals, including the specific difficulties that individuals may experience in getting to work, but we also have growing environmental concerns. The Climate Change Act 2008 has targets to reduce UK greenhouse gas emissions by 80% by 2050. In 2009, the transport sector accounted for a quarter of domestic carbon dioxide emissions, with 90% of those emissions coming from road transport and 55% from domestic cars alone.

Why, at a time when we are so concerned about environmental issues and when we now have the Climate Change Act, would we deliberately want to price people off rail and encourage them to get back into their cars? Furthermore, are we really so certain that the Government’s claim that those increased fares will lead to better investment and improved facilities on the rail network will actually become a reality? The rail structure is very complex and there are big questions to be asked about whether all of us—the traveller and the taxpayer—are getting good value for money from the investment put into rail.

Sir Roy McNulty’s report on the rail system and value for money issues will be very important, as will the decisions about rail franchises for the future. If we are to get value for money for the essential funding that goes into rail, it is extremely important that we look carefully at what emerges from Sir Roy McNulty’s study. Although I know at this stage that some preliminary conclusions have been drawn, there is no full report yet. I would be pleased to hear from the Minister her understanding of what Sir Roy McNulty might say and what she thinks might be the policy implications of his report.

I welcome this morning’s announcement about rail investment, particularly the commitment to electrification of the line between Liverpool, Manchester, Preston and Blackpool, and the electrification of the Great Western line. However, I want to be quite sure that that electrification will go together with increased provision of rolling stock and carriages on those lines, and indeed on other overcrowded lines. I would also like to know what kind of monitoring will take place of the promises that we heard this morning—promises about other schemes, as well as the two I have mentioned—to ensure that the investment goes ahead as planned and that we have more capacity, more efficient and environmentally friendly rail travel and better value for money at the same time.

I also welcome the Government’s statement on their commitment to High Speed 2 and the funding for it. However, it is very important that the benefits of HS2 are maximised and that there is no neglect of investment in the classic network.

Rail freight is also very important. Freight moved by rail accounts for about 9% of all goods moved in the UK and I welcome the Government’s commitment to improving investment in rail freight links, specifically those between Southampton and Felixstowe. When the Transport Committee visited Hull recently, to take evidence as part of our inquiry into transport and the economy, we were told about the importance of relatively minor improvements that could enhance access to the Humber port. I hope that those improvements can go ahead and indeed I hope that similar improvements can be made in the Merseyside area. When we talk about rail investment, that debate is often dominated by discussions about passenger rail. We should always remember the importance of freight on rail, too, and the importance of investing in it.

It is also important to look at investment in buses. Indeed, more people travel on buses than on any other mode of public transport. In 2009-10—the last year for which we have figures—5.2 billion passenger journeys were taken on local bus services in Great Britain. That compares with 1.3 billion passenger journeys on rail.

I am extremely concerned about the implications of the comprehensive spending review for funding local bus services. The bus service operator grant will be cut by 20%, local authority revenue for bus services will be cut and we do not yet know how effectively the Local Transport Act 2008 will work to ensure good value for money. We are awaiting the results of the Competition Commission inquiry into the setting of bus fares.

The Government say that they believe that the cuts in the bus service operator grant and other local authority funding, which could have an impact on support for local buses, will have a low impact on services. I am mystified by that and would like to know how the Government arrived at their figures. It seems to me that a 20% reduction in the bus service operator grant, a 28% reduction in local transport revenue funding and the removal of ring-fencing puts a big question mark over how many services that are essential to local people but not necessarily profitable for individual bus operators will be able to continue. I would be grateful for a response.

It is welcome that this Government are honouring their commitment to maintain the national concessionary fares scheme introduced by the previous Government, but the administration of the scheme has changed, and there are now queries about whether the funding for that scheme will go directly to the transport services. Again, I would be grateful for a response on that from the Minister.

Road safety is an important issue that is perhaps not discussed enough—it has not been discussed sufficiently in relation to the comprehensive spending review—but one of the successes of the past decade or so is the reduction in the number of deaths and serious injuries on our roads. In 2009, some 2,222 people were killed on our roads and more than 24,000 were seriously injured. Behind every one of those numbers lies a tragedy, and often a broken family, yet the figures represent an improvement on previous years: 38% fewer people were killed on our roads than in the late 1990s. More progress must be made. I am concerned that the reduction in local funding, combined with the abolition of ring-fenced grants for road safety, will halt the progress made and the decline of deaths and injuries on our roads.

[Steve Baker (Wycombe) (Con)]

I congratulate the hon. Lady on securing this debate. Will she join me in recognising the value of free advanced driver training from organisations such as the Institute of Advanced Motorists, which is available at very little cost to drivers, in raising driving standards and improving safety?

[Mrs Ellman]

The hon. Gentleman makes an important point. I recognise the value of the training that he mentions, but the reason why we have made such progress in reducing the number of deaths and injuries on our roads, although those numbers are still far too high, is that combined efforts have been made not only to improve training but to improve road design, increase publicity through campaigns, reduce speeds and improve enforcement. It has been a combination of efforts by individuals and organisations, led by strong Government focus and guidance. I am concerned that those things might now recede into the background. That must not happen. I welcome an assurance from the Minister that transport safety, including road safety, will be high on her agenda.

Hidden within the comprehensive spending review are decisions to cut funding in important security areas such as aviation security and major changes, also involving funding reductions, to TRANSEC, which is responsible for security in transport. It is not clear what those changes will mean. When the Select Committee on Transport questioned the Secretary of State for Transport about it yesterday, he said that some of the responsibility for funding aviation security would be transferred from Government to the aviation industry. He also said that he could not say a great deal more about changes to TRANSEC. My concern is that we lack information and clarity about what is happening. It is important for us all to know what is being planned. Is the policy change an effort to increase the effectiveness of security, or is it driven by a wish to reduce costs? Transport security could be put at risk at a time of heightened concern. We need to know more about what is happening.

I also draw attention to concerns about the future of passenger representation. Passenger Focus has done an excellent job of drawing attention to the needs of passengers and travellers. It started with excellent work on the rail industry and has recently been given new responsibilities relating to bus travel, yet the Government’s quango hit list stated that Passenger Focus was due for significant reform and changes to its core tasks; I think that those were the words used. How are those core tasks to be defined? Do the Government want to change Passenger Focus’s funding and remit because it has been too successful in representing passenger needs? However committed any Government might be to public transport or indeed anything, it is essential to have an independent body that can speak out for the public about those services. I would be concerned if passenger representation were downgraded.

Finally, questions must be asked about the proposed cut of more than 30% to the administration of the Department for Transport and its agencies. First, what does it mean? Is it about being more efficient, or does it mean that the Department and its agencies will not be able to deliver what they are required to deliver with such significantly reduced funding? What does it mean for the Department’s agencies? We have already heard about cuts to the Maritime and Coastguard Agency, including the removal of emergency vessels, which it appears is being done without prior consultation. It is unclear what it is all about, and it is concerning. Such drastic reductions in the administration of the Department and its agencies must ring alarm bells. Is it about being efficient—will services be delivered—or is it about more hidden cuts, particularly to those agencies where what is happening is not always immediately apparent?

In conclusion, I welcome the Government’s stated commitment to investment in our infrastructure and recognise, looking at what has happened to other Departments, that the cuts could have been much worse. However, great concerns remain about the impact on transport of the comprehensive spending review’s cuts. I look forward to hearing the Minister’s response to the points that I have made and assure her that the Select Committee will be pursuing the issues in the months ahead. I hope that she will be pleased to receive an invitation from us before too long. We will be pleased to continue this discussion in another room.

--- Later in debate ---

[Martin Horwood]

I am rather surprised that the hon. Gentleman thinks that the methodology was not flawed. It was changed in March, and the now leader of the Labour party, the former Secretary of State for Energy and Climate Change, rightly presided over that change, which this Government, who took office shortly afterwards, took up. I think that the hon. Gentleman needs to be careful about his calculations.

As far as the other airports are concerned, it is very important that aviation is constrained across the European Union, and indeed around the world, as part of our assault on the threat of climate change. Unless the hon. Gentleman is challenging the methodology used by Sir Nicholas Stern—now Lord Stern—in his review, which was commissioned by the previous leader of the Labour party and Prime Minister, he will have to explain what methodology he would use to reflect the true economic cost of the threat of climate change. The methodology has been widely accepted in business and by investors and is now part of business calculations, and the use by the previous Government—until they changed their mind at the very last minute—of an incorrect and adulterated version of the cost of carbon, deviated from good business practice, apart from anything else.

On assessing project impact, I recommend that Ministers look carefully at the new approach to appraisal—NATA—assessment framework, and ensure that environmental and quality-of-life benefits are properly reflected. My noble Friend Lord Bradshaw in another place has made some very valuable and typically learned critiques of NATA, and I commend them to Ministers.

On railways, Ministers can be very happy indeed. The overall balance of investment in the Department will shift from 49 to 60% for rail by 2014-15, and that is exactly the right direction of travel. I am delighted that major projects such as Crossrail, Thameslink, the tube upgrades and, of course, High Speed 2 are all secure and that High Speed 2 in particular will, assuming that it is extended to Scotland, in the very long term deliver substantial reductions in aviation within the UK. I take the points made by other hon. Members on this earlier, but High Speed 2 is a very important contribution to rebalancing and making more environmentally friendly our whole approach to transport; that has been the experience of high-speed rail wherever it has been introduced around the world in competition with aviation.

Today, significant investment in new rolling stock was announced, with 600 new carriages for Crossrail and 1,200 for Thameslink, which in turn will free up hundreds of electric carriages for redeployment on newly electrified routes elsewhere and help to make the case for those new routes economic, which is very important. That, in turn, will free up diesel rolling stock for other routes, and help to support their economics. We have had additional announcements on developments at Reading, Birmingham New Street and other stations, on the east coast and midland main lines, and in Manchester and south Wales, and the confirmation, which is very important to colleagues in Scotland, that the inter-city express programme has been narrowed to two options, both of which include absolutely through services, and do not therefore raise the prospect of parts of Scotland being cut off by the need to change trains.

I would also welcome the schemes previously announced by the Department, which are reflected in the settlement for light rail, trams and ultra-light rail schemes. Those mentioned are Greater Manchester Metrolink, the Blackpool and Fleetwood tramway upgrade and the Tyne and Wear metro upgrade, and there are plenty of others that we could consider. The hon. Member for Pudsey (Stuart Andrew) made a very powerful case for Leeds, and the Leeds new generation transport scheme is in the development pool, which means that it has a fair chance of success. I wish him well in putting forward a strong case for the Leeds light rail system.

There are other schemes even further into the future, and I must mention the ultra-light rail system being fought for in Gloucestershire. We recognise that it is a long way off in terms of public funding, but important steps can be taken to support it. Most obviously, since it is intended that the system will reuse railway lines that were closed down by Dr Beeching, Ministers could look, perhaps with the Department for Communities and Local Government, at the new planning framework to ensure that nothing is done that prejudices such development. That would be an important way to support the future development of ultra-light rail.

On roads, I welcome many of the announcements, including the confirmation that support for electric car-charging infrastructure will go ahead. With the possibility of “hybrid hybrid vehicles”—those that run on electric batteries until the batteries run out and then revert to more conventional hybrid vehicle technology—we might be within sight of escaping the chicken and egg situation, in which the car-charging points cannot be rolled out until the electric vehicles are there to produce the demand for them, but the demand for the electric vehicles cannot be there until there are charging points. There is now the prospect of beginning to move forward in the electric car market, and the Government’s clear support for that is very important.

I am pleased that the main focus of the Department’s spending is shifting more towards maintenance and away from new roads, but the Liberal Democrats might have gone further and looked rather more critically at many of the other new road projects. I was very interested in what the hon. Member for Worsley and Eccles South (Barbara Keeley) said about the M60 project. It certainly sounds as though the Highways Agency’s consultation process has left a very great deal to be desired in that case, and could be critically looked at again. I also suggest that Ministers cast a particularly critical eye over the suggested upgrade of the junctions between the M4 and the M5 in my part of the world. I travelled the M4 and the M5 recently by car, and found no particular problems at the junctions or with the interaction between the two motorways, so I am not sure what the justification for the project is. I urge Ministers to keep all new motorway projects under very close review.

Not all road projects are bad, however. The Mersey gateway bridge project, which is in the supported pool and is therefore certainly being given a fair wind by the Government, could substantially reduce carbon emissions by increasing walking and cycling and considerably shortening car journeys in Merseyside. It would obviously also bring economic benefits. One last comment on roads is that with snow and ice possibly being a topical issue even before the end of the week, it is very welcome that the Local Government Association reports substantial extra investment in the provision of grit by local authorities, but I urge Ministers to keep a weather eye on that because we have seen some disasters in the past, when grit has run out. Grit suppliers particularly need to be encouraged to maintain supplies to local government as a high priority.

I am concerned about buses. I agree with the hon. Member for Liverpool, Riverside, who emphasised the importance of the number of bus users in the country. Some 5 billion to 6 billion bus journeys are undertaken a year. The bus sector faces a potential triple whammy from the CSR. There is an admittedly modest reduction in the bus service operator grant, but the maintenance of the concessionary fares scheme is an important political commitment, which I support in principle. In fact, I should like it to be extended to 16 to 18-year-olds, in line with the policy of the UK Youth Parliament. That scheme is imposed on local authorities in a way that is inflexible for them and they have no way to control its costs. Its incorporation into the formula grant in future will lead local authorities to make some difficult choices about how to spend money locally. Since local authorities also subsidise many bus routes, those three things could combine and put a lot of local bus services at risk. That would damage our commitment to public transport and greener transport and would put rural bus services in particular at risk, which would not be welcome. Will Ministers meet their colleagues from the Department for Communities and Local Government and local council leaders from the Local Government Association, urgently to discuss the likely impact of the CSR on the bus sector?

Some responses could be made to the threat to the bus sector that do not involve spending large amounts of public money. It is instructive that bus journeys in London are on an upward trend, whereas bus journeys in the rest of the country are on a downward trend. Those of us outside London might mention the probably well deserved but quite generous subsidy that public transport in London gets relative to the rest of the country. But we could also mention the Oyster card and the use of smart technology, which makes it easier for people to use buses in London and the enormously better marketing and provision of information about routes in London at every bus stop and online. Certainly, that is in sharp contrast to the situation in Gloucestershire and many other parts of the country, which makes buses virtually incomprehensible and difficult for consumers to use reliably.

[Mrs Ellman]

Does the hon. Gentleman accept that the distinction between the rise of bus services in London and, until recently, reduced use in the rest of the country is attributable largely to the fact that deregulation was never applied in London in the same way as it was in the rest of the country? Does he agree that the provisions in the Local Transport Act 2008 to give local authorities more powers over bus operators must be implemented?

[Martin Horwood]

Deregulation played a role. In terms of the co-ordinated provision of information and marketing and selling bus transport to local populations, it is much more difficult in areas where buses have been so comprehensively deregulated. I do not think that the renationalisation of bus services nationwide is likely. Much as I would love to overturn some of Mrs Thatcher’s legacies, we probably should not concentrate on that one.

My point is that there are solutions to trying to support commercially viable bus routes, or making those routes more commercially viable, that do not necessarily involve large sums of public money and might be about smarter and more intelligent policy locally.

I should like to highlight two local issues. On the Dartford crossing, a small but locally important part of the CSR will maintain the toll regime for its 150,000 users a day. I understand the Government’s case for that, because it is part of an investment in future transport provision in that area and traffic management will be improved, and so on. But the original idea was that the toll would cease when the Dartford crossing had been paid for. I am afraid that it has now been paid for, so there is some fairly justifiable anger locally that this is continuing.

The Minister knows that none of my speeches are complete without a reference to the redoubling of the Swindon to Kemble line in the south-west of England. That is potentially the only rail project that the Government might cancel, which would be regrettable. It is important to the west of England and south Wales, and to Welsh Members and, I suspect, to my neighbour the hon. Member for Stroud (Neil Carmichael).

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[Mrs Villiers]

I understand that all local authorities will have the opportunity to set up LEPs, but I am not an expert in how the process works. As has been acknowledged, there is a good case for LEPs getting together, so that we can consider transport matters across a wider area. It obviously makes a great deal of sense to consider units such as travel-to-work areas, which may be considerably larger than the LEP areas themselves. LEPs working together will be constructive.

[Mrs Ellman]

I thank the right hon. Lady for attempting to answer my question. Will she acknowledge that there is still a major problem in that LEPs have not been formed in many parts of the country? When the Committee visited Hull, local businesses expressed grave concerns about the inadequacy of the LEP structures. Although she states that her Government will not wait until the end of this Parliament to set up an appropriate structure to deal with transport issues, can she give me any timetable for when she will be able to do so? After all, if she decides to destroy one structure, she should have a better one already in place.

[Mrs Villiers]

As soon as LEPs are up and running, we will engage with them about our decisions on transport projects. If there are gaps in the LEP map, we will engage with the local authorities in those areas that are not covered by LEPs and take on board their views and concerns.

The hon. Member for Cheltenham mentioned reform of the appraisal system. As he acknowledged, we have made efforts to reform the New Approach to Appraisal system to put a more realistic price on carbon, and to address the anomalous emphasis on additional fuel duty revenues for the Exchequer being discounted from the overall cost of the project. Further reform is planned, but it is important to reform the system so that we have a more realistic assessment of the carbon impact of different transport choices because we want to choose the projects that are consistent with our climate change goals.

The Chairman of the Transport Committee expressed concerns about emergency towing vehicles. Ship salvage is a commercial matter between a ship’s operator and the established salvage industry, and we have every confidence that there is capacity in the salvage industry to support ships in difficulty from September 2011 at commercial rates.

As for rail, it is very clear that we have had to take a difficult decision on fares. Of course, I wish that we could have avoided that, but the scale of the deficit that we inherited severely constrains our choices. Without the three years of retail prices index plus 3% increases that we announced, it simply would not be possible to deliver vital capacity improvements that passengers need.

The hon. Member for Liverpool, Riverside emphasised the importance of rail services in tackling climate change; I agree and that is why we have made such a major commitment to investment in rail. She also emphasised the importance both to passengers and taxpayers of getting value for money from the railways. She asked me to pre-empt the publication of the McNulty review. I had better not do that, but she will appreciate that one of the key problems that has been identified across the industry is the mismatch between incentives. Aligning incentives more effectively between the train operators and those responsible for maintaining and running the tracks is one possible way in which we can start to reduce costs in the rail industry and put our railways on a more sustainable financial footing. That is essential if we are to deliver value for money for passengers.

The hon. Lady also called for more transparency around fares; there is scope for that. Greater efforts are under way to ensure that consumers know exactly what deals are available. Increasing consumer understanding of the range of rail fares is an important goal. She also recognised that some fares are considerably lower than in past years. That is not something that one would recognise from reading the papers, but lower fares are out there, and increasing numbers of passengers are taking advantage of them. That said, we understand the concerns of many commuters about rail fares. As I have said, we have been forced into a difficult decision by the deficit that we inherited.

We have seen a shift in departmental priorities. Rail has come out much better from the spending review than other transport programmes. The programme of rail capacity upgrades is extensive—arguably, the most extensive in modern history. Crossrail is going ahead according to its original scope. Despite all the scare stories, there has been no announcement that the limbs will be amputated. We expect services to be phased in from 2018 across the Crossrail network. Savings worth some £1 billion have been identified through addressing risks and undertaking an engineering-led review of the most cost-effective way to deliver the central section, including lengthening the delivery time by around a year. We continue to work with Crossrail Ltd, the Mayor and Transport for London to optimise the scheme’s value for money.

My hon. Friend the Member for Ealing Central and Acton emphasised the importance of pressing ahead with work on the new stations. I am pleased to hear that she will be able to see the station designs for Ealing Broadway soon. Our goal is to keep up the pressure to ensure that we meet the delivery timetable that has been set.

The Chairman of the Transport Committee expressed concern about the position of TRANSEC and the budget allocated to transport security. There will be reductions of 25%, but it is well worth emphasising that the total industry spend on aviation security is more than £350 million. The bulk of the spending on aviation security is made by the industry because it delivers aviation security on the ground. She will appreciate that the 25% reduction that was discussed in the Committee yesterday relates to departmental activity, which is the overview, the policy, and the regulatory and supervision aspects. The savings are deliverable without compromising security outcomes. We recognise that maintaining passenger safety and security is of paramount importance. Administrative reform and reorganisation—rationalising certain training programmes, having to target our research programme and reducing some of our network of aviation advisers around the world—will enable us to deliver those savings without compromising passenger security.

--- Later in debate ---

[Mrs Ellman]

Thank you, Mr Gray, for your chairmanship this afternoon. I also thank the many hon. Members who have demonstrated the significance of national decisions for local facilities and for their constituents. I thank the Minister for her very full replies, but such fullness cannot disguise the fact that a 15% cut in transport, an 11% cut in capital expenditure and a 21% cut in resource expenditure, are major cuts. Yes, it could have been worse, but those are major cuts.

I am pleased that my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick), the shadow Minister, has retained all his expertise and knowledge about transport and I am glad to see it being put to such good use this afternoon. Some promises and commitments have been given, but there are clearly still some gaps and major problems. I am sure that my Committee, in the months and perhaps years ahead, will monitor those promises and continue to raise issues of concern. I look forward to the Minister appearing before our Committee to follow up some of the very important matters raised this afternoon.

Question put and agreed to.

Oral Answers to Questions

Louise Ellman Excerpts

Thursday 28th October 2010 Commons Chamber

[Norman Baker]

I know that my hon. Friend is very keen on this scheme, and that he and other local Members have campaigned strongly in favour of it. We are certainly open to innovative ideas to find alternative funding, whether through the regional growth fund or the incremental system to which he referred, and I look forward to examining those options with his local county council.

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

In recent years a combination of local schemes and national action has resulted in a very significant reduction in the number of people killed or seriously injured on our roads. Has any assessment been made of the implications of the cut in local funding for the lives of people on our roads?

[Norman Baker]

The hon. Lady has considerable knowledge of transport issues as a result of her role on the Transport Committee, and I think she understands that what the Government are doing is freeing up local councils to spend their own money rather than determining the number of grant streams centrally. There have been 26 grant streams for transport funding for local authorities, but that will be reduced to four. That will enable local authorities to prioritise matters in their own areas, as they should do as democratically elected bodies.

Transport (Investment)

Louise Ellman Excerpts

Tuesday 26th October 2010 Commons Chamber

[Mr Hammond]

I am grateful to my hon. Friend for her remarks. I know that the Nottingham tramway is not universally popular and that the workplace parking levy is even less so. However, if we are serious about a localism agenda, we will find that sometimes, perhaps often, the things that elected local authorities choose to do on behalf of local residents are not always in accordance with our own preferences and priorities. That is in the nature of localism, and I embrace it.

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

I welcome the positive parts of the statement, but there are major problems relating to the very important strategic schemes currently funded and identified through regional allocations. Does the Secretary of State agree with his statement to the Select Committee on Transport that structures wider than local economic partnerships would be necessary to examine such schemes in the future? Does he still maintain that this will bring more localism, given that we are told that future schemes of this nature will be funded partly through the regional growth fund and that decisions on that fund are to be taken entirely nationally?

[Mr Hammond]

I am glad that the hon. Lady has raised the issue of the regional growth fund. It is important to reiterate that that fund will be open to transport projects; they will be able to bid for funding from it. However, that is not in substitution for the very significant allocations that I have announced today—it is in addition. I hope that some of the smaller local authority schemes, in particular, may be worked up as bids to the regional growth fund.

The hon. Lady talks about local enterprise partnerships. As I said in my statement, my objective is to move to a system that more clearly allows local communities and local authorities to determine how the funding allocated to their area should be spent. The previous Government introduced the regional funding allocation system. The mechanisms through which that was intermediated are now to be abolished, along with the regional structure of government. What I said to the Select Committee and repeat today is that my Department will carefully examine the LEPs as they come into being. Of course they are a bottom-up structure, rather than a top-down one, so different LEPs will look different. We will need to see how they are organised and whether they are on a sufficiently strategic scale to be allocated transport funding individually or whether we might ask them to form strategic alliances with other LEPs as a basis for transport funding over relevant geographical areas.

Mutual and Co-operative Rail Franchise Bids

Louise Ellman Excerpts

Wednesday 20th October 2010 Westminster Hall

[Gavin Shuker]

I thank my hon. Friend for his intervention, with which I completely agree, and I associate myself with his comments. What we have seen from the coalition Government is a desire to look at innovative models across public services, and I believe that railways should not be exempt.

As I was saying, a democratically elected members’ council with the power of appointment and pay over Network Rail’s board could drive up performance. Co-operative and mutual structures deliver organisations that act in our interests. Who would be a better boss of the rail network than the passengers and the British public themselves?

Moving on to the bulk of my remarks on rail franchising, in a reply to a question from my right hon. Friend the Member for Tooting (Sadiq Khan) in the House on 22 July, the Minister said:

“There would be no barriers to mutuals and co-operatives bidding for franchises if they fulfilled the criteria.”—[Official Report, 22 July 2010; Vol. 514, c. 541.]

However, it is clear that there are still some barriers to entry, despite the stated desire of the coalition to explore innovative models of public service delivery. We in the Co-operative party would like to see those models given all the opportunities that are before them.

The system as it stands does not make allowance for the arrival of mutual and co-operative ventures. First, bidders are required to pass a number of detailed financial tests during the bidding process. ASLEF has said that a mutual bid would not be able to meet the performance bond requirement, and has called on the Department for Transport to review the performance bond criteria. Surely that is an area for examination. Secondly, bidders are understandably required to show experience of operating transportation systems. Can the Minister provide an assurance that the interpretation of that requirement is wide enough to ensure that mutual models in which individual members have extensive experience of running transport services—even the ones that they currently work on—but in which there is a new team coming together, perhaps under a new brand, are able to bid on a level playing field? Thirdly, the fact that no franchise has yet been awarded to a mutual ownership model on the railways itself serves as a barrier to entry.

To bring about the innovation that could drive up levels of service and accountability across the industry, will the Minister carefully consider the arguments for awarding the first mutual franchise during her time as Minister? Perhaps she could start by meeting representatives of ASLEF. The union has been preparing a mutual bid to run the east coast main line rail franchise when invitations to tender are announced in 2011. It believes that the co-operative principles of sustainability and accountability should be brought front and centre in the provision of passenger rail in the UK.

A common perception is that co-operatives are small and therefore unable to step up to the financial requirements of such a large franchise. However, the Co-operative Group has a turnover of more than £10 billion, and the east coast franchise turnover is only £550 million. The Go! Co-operative is one of the most recently established train operating companies, and down the track, as it were, it seeks to run open-access train services. That co-operative has already been authorised by the Financial Services Authority to raise the required funds, and I am sure that the Minister will want to welcome that initiative. I encourage her to take the time to talk to representatives of Go! Co-operative and to understand, in real time, both the challenges and the opportunities that are presented to people who enter the franchise system.

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

Does my hon. Friend agree that the strength of mutuals is that they can represent the interests both of those working in the organisation and those who use its services?

[Gavin Shuker]

Absolutely. I thank my hon. Friend for that intervention, and I would like to associate myself with her comments. It is true that when different stakeholders, including the people who work on the railways, are brought together, that always results in a much better service. Rail franchising is a key aspect of mutuals’ activity on the railways, but there are other ventures, too, to consider.

Enterprises that are owned and controlled by those who have a vested interest in their success should not be confined to the running of the railway itself. Many services that work alongside the main business add value to the traveller experience. Services such as cleaning, catering, customer service and training would be greatly improved by local accountability that allowed the services to respond flexibly to changing needs. The Cleaning Co-op based in Bristol has already won contracts to work with Birse Rail, CrossCountry and Virgin Trains. It provides cleaning services to Oxford and Bristol universities, local schools and the NHS. As a result of its unique structure, it not only provides a highly professional service but has a high staff retention rate and a motivated work force. It is highly valued by its clients, who are also its partners. The Cleaning Co-op is one example, but there are many successful retail, catering and training co-operatives, all of which could add to the traveller experience in a mutualisation of rail franchising.

Mutualism has much to offer in the governance of Network Rail, the system of rail franchising and the services that enable a decent passenger experience. I hope that the Minister will speak about the positive contribution of these talented, professional and visionary co-operatives. As we all recognise, UK rail faces significant challenges in the years to come. There is a requirement to show that passengers are getting a fair deal. There is a desire to see profits reinvested in better services. What better way to reassure passengers that the railways have their interests are at heart and that the staff who serve them truly have a seat at the table, than to see mutual operators on our railways?

Oral Answers to Questions

Louise Ellman Excerpts

Thursday 22nd July 2010 Commons Chamber

[Mr Hammond]

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

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

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

[Mr Hammond]

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

Oral Answers to Questions

Louise Ellman Excerpts

Thursday 17th June 2010 Commons Chamber

[Mr Hammond]

Perhaps I can clarify what I have done. This scheme has conditional approval, and we have said that schemes with conditional approval or programme entry will have to await the outcome of the spending review before we can confirm them. My understanding is that Cornwall county council is still awaiting listed building consent, without which the scheme could not proceed anyway, but we are aware of the vital nature of the link to the Isles of Scilly and we will review the scheme as soon as the spending review has been completed.

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

I congratulate the right hon. Gentleman on his appointment.

Two days ago in the other place, Lord Attlee stated that rail electrification could not be afforded. Does that mean that the Government reject the notion that investment in transport is essential to support economic recovery?

[Mr Hammond]

The Government are committed to rail electrification because of its carbon impact. However, as the hon. Lady will be aware, we have inherited a massive black hole in the public finances—[Interruption.] Labour Members can laugh, but the previous Government announced a halving of the public capital investment programme without giving any indication of where that cut would come. After the spending review, we will have to look at all these programmes in the light of their affordability and the urgent need to reduce the fiscal deficit.