High Speed Rail (Preparation) Bill

Louise Ellman Excerpts

Thursday 31st October 2013 Commons Chamber

[Mrs Gillan]

I am not going to take any more interventions. I want to make sure that other colleagues are able to speak on this group of amendments, and as there are no knives, the longer we take on this group, the less time we will have for other important groups that deal with the economics of the railway line and with compensation.

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

Will the right hon. Lady give way?

[Mrs Gillan]

How can I resist the Chairman of the Transport Committee?

[Mrs Ellman]

I thank the right hon. Lady for giving way. Will she point out to the hon. Member for North Warwickshire (Dan Byles) that the Select Committee was very clear that High Speed 2 was the only way in which the necessary increased capacity could be obtained, and that in discussing the economic benefits, we also stated that economic development strategies were required to go with the provision of that extra capacity?

[Mrs Gillan]

I am grateful to the hon. Lady for that intervention.

A lot of people are saying that there is no alternative to HS2 if we are to solve the capacity problems, when in fact a large number of alternatives are emerging from numerous sources. Suggestions have been made by economic think-tanks and transport economists, including a recent proposal to revive the old grand central line. I fought against an ill-conceived plan to run freight on that line in the early 1990s when I was first elected to the House. That plan did not stack up economically, and we saw it off.

Amendment 19 would narrow the scope of the Bill, which, as currently drafted, could extend to all railway operations. I do not know whether it was the intention to cover not only HS2 but all other railway operations, but the drafting seems to be a bit sloppy. If the provisions are not confined to HS2, it will make a mockery of any limits placed on the costs that the taxpayer will have to face. The amendment attempts to limit this money Bill, and to limit the expenditure to HS2, in line with what I believe the Government intended. If the provision were to include Scotland, that would round up the whole package.

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[Mrs Ellman]

I rise to support amendment 17. I am a firm supporter of High Speed 2. The case for it is essentially one of capacity. It is entirely wrong to state, as some commentators have done recently, that the argument for capacity is something new that has been brought in only at this stage. That is simply not so. The report that the Transport Select Committee produced two years ago made it clear that the need for increased capacity formed the basis of the case for HS2.

Amendment 17 deals with linking HS2 to the rest of the transport network. It specifically mentions the need for it to link to roads and airports. It is important that it should not be seen as a development that is separate from the rest of the rail network or indeed from the rest of the transport network. I therefore welcome the amendment. It is unfortunate that, because no decision has been taken on the need for increased airport capacity in the south-east, no firm proposals on Heathrow have been finalised. That matter needs urgent attention. There is also an issue about freight. In Liverpool, for example, the expansion of the port is creating a need for more freight paths and better access for freight. That, too, needs attention. I welcome the amendment in that it draws attention to networks and connectivity.

[Stephen Barclay (North East Cambridgeshire) (Con)]

In speaking to amendment 17, the hon. Lady is, in essence, setting out an early case for design changes. Can she confirm that the existing contingency in the spending envelope does not include provision for any such changes?

[Mrs Ellman]

The hon. Gentleman needs to direct such questions to HS2 itself. It is extremely important that all the financial aspects are fully considered. This specific amendment is to do with networks. The question of access to the high-speed network is critical, and that involves roads as well as other rail tracks.

The case for HS2 is also based on increased economic benefit to the areas in which the railway stations are located, as well as the surrounding areas and the regions that they serve. The issue of freed capacity on the west coast main line as a result of phase 1, and on the east coast and midland main lines following phase 2, is critical. The strategic review states that there will be a £3 billion benefit from the use of freed capacity, and Network Rail has stated that more than 100 cities and towns could benefit.

[James Morris (Halesowen and Rowley Regis) (Con)]

Those benefits will be crucial to areas such as Birmingham and the west midlands. One of the advantages of HS2 to the west midlands will be that it will free up capacity on the west coast main line and improve connectivity to regions such as the black country, part of which I represent.

[Mrs Ellman]

Indeed; the hon. Gentleman is absolutely correct. We must not look simply at the HS2 line itself; we must also consider how its connectivity to other lines and other parts of the transport network can be developed.

[Dan Byles]

If the principal benefit is now capacity rather than speed—this seems very much how the argument has moved—why not slow it down? If it is slowed down, we will no longer have the engineers I sit down with every week telling me, “We can’t go around Water Orton primary school because speed means it must be a straight line; we can’t go around ancient bluebell woods because speed means it must be a straight line.” If we slow it down, we will be able to avoid going over many of the sensitive areas on the route and perhaps even put in more stations.

[Mrs Ellman]

The strategic review and other studies indicate that alternatives have been looked at and rejected. Network Rail states that more than 100 cities and towns could benefit from this development. Named in the various reports are places including Watford, Milton Keynes, Rugby and Northampton, but many more are possible. There is also a need to increase capacity for freight, which is as important as passengers. About 20 new freight paths can be developed, but I would view that as the absolute minimum.

[Mrs Gillan]

I hear what the hon. Lady says about freight. How does she react to what Lord Berkeley said? He heads up the Rail Freight group and said that HS2 will in fact constrain freight because it does not link up properly with the existing network on the west coast main line and its northern end in phases 1 and 2? He should know, should he not?

[Mrs Ellman]

Lord Berkeley was pointing out issues of practical difficulty, but they can be worked on. Indeed, the purpose of this debate and subsequent debates is to identify where the problems are and to do something about them. No plans are finalised. We are talking about principles and strategies. It is essential to look at critical detail and to make changes where they are necessary. Debates such as this one are an integral part of that important process.

[Mr Sheerman]

I have great admiration for my hon. Friend as Chair of the Select Committee, but she knows the Department for Transport better than most people, and we have had from it a catalogue of confusion and chaos over the west coast franchise and now over the planning for HS2, as it has changed the priorities, rules and bases of all the assumptions. Is she confident that this HS2 project has been thoroughly prepared and that the grounds for it are absolutely perfect?

[Mrs Ellman]

It is essential to apply the necessary commercial expertise to this scheme—whether it be directly in the Department for Transport or in HS2 itself. I am encouraged by the new appointment of Sir David Higgins to lead this process. I think that will give people increased confidence, which is indeed necessary.

[Andrew Bridgen (North West Leicestershire) (Con)]

If the hon. Lady is so convinced of the business case, will she explain why the Government are now on the fifth revision of the business case for HS2? Does she think this will be the last revision, or will there be another 25 over the next 25 years to justify the case? I simply cannot believe it: it is amazing that the project has gone up by £10 billion and the Government have now managed to find £10 billion-worth of supposed benefits. I put it to the hon. Lady that this is the biggest work of fiction since Enid Blyton.

[Mrs Ellman]

It is for Ministers to say why the business case has been reviewed so many times, but when the Transport Select Committee looked at the issue two years ago, it approved a high-speed line, but pointed to a number of critical areas where it was felt more work should be done, which included looking again at the business case. One reason for that was the valuation put on the time people spent travelling, when it was alleged they could not work. We thought that that was not a correct valuation and that it should be looked at again. We raised issues of environmental concern and said they should be looked at again, as we did with issues relating to economic impact, particularly the need to have economic development strategies as well as the essential rail travel links.

The Select Committee called for a review of the case, looking at those specific factors and stressing the importance of relevant and up-to-date information. We thought it would be absolutely wrong to use information that was not up to date and that ignored the concerns we had raised. The report supported the project in principle, but raised real concerns, which we said must be addressed before any final decision could be taken. Not all of those concerns have yet been addressed, but some of them have been, as we have discussed today.

[Mr Sheerman]

On that very point, my hon. Friend’s very good report was two years ago and since then many people have used it to do the very thing she asked to be done. The subsequent reports built on her report, however, show a very different picture. Is that not the problem?

[Mrs Ellman]

I do not know to which reports my hon. Friend refers, but there have been no comprehensive reports looking at the whole scheme. Some have looked at some aspects of it, but not at the up-to-date information, which was published only this week. I am not aware of any reports that have looked at that. I am sure that the Transport Committee will look again at the information, as we have it.

[Julie Hilling (Bolton West) (Lab)]

Does my hon. Friend agree that the business case is not just about the financial case? Public transport is a public service, so we need to look at the need to run trains throughout the country. We should not be looking only at pound signs, but at the overall need for this service.

[Mrs Ellman]

I agree with my hon. Friend’s general point. It is important to assess individual aspects of the project, but we also need to look at the concept and what it is trying to achieve. It is about expanding essential infrastructure in this country. If we do not have vision and if we are not prepared to look ahead at the nation’s needs, we will lack the essential infrastructure needed for economic prosperity. It is essential, too, to look at the detail, which is why we called for a review of the cost-benefit ratio, for a review of the environmental and economic factors and for up-to-date information on the projections of capacity, for freight as well as passengers. The concept must not be lost in the vital necessity to look at the individual components and make an assessment of them.

[Mr Roger Godsiff (Birmingham, Hall Green) (Lab)]

My hon. Friend is surely aware of the National Audit Office report on this subject, which referred to

“fragile numbers, out-of-date data and assumptions that do not reflect real life.”

What does she say to that?

[Mrs Ellman]

The strategic review produced this week provides the up-to-date information. When the previous reports, including the NAO report, were produced, that information was not available. It is necessary to examine the new information that has come forward and look at it very carefully indeed—and that is the up-to-date information. As I say, previous reports did not look at it.

[Andrew Bridgen]

The hon. Lady talks about looking at the detail, so let us look at the facts. This project started out at £20 billion; it has hit £50 billion; the Treasury is working on £73 billion—and it was all priced in 2011 money, with indexation of 3% on top of it. Is it going to go the same way as HS1, which started at £1.5 billion and finished up at £11 billion?

[Mrs Ellman]

Again, I think it is for the Minister to answer those questions. This specific amendment deals with networks. The hon. Gentleman raises an important issue about the costs and the contingencies and how they will be put together, but that is a matter for the Minister and for broader debate than for discussion on this specific amendment.

[Graham Stringer (Blackley and Broughton) (Lab)]

When the Transport Select Committee went to France to look at the economic impact of high-speed rail, we found that there was a huge economic benefit in Lille and most other cities. The fact is that the Department for Transport assessments do not capture that economic benefit. Talking about people working on trains really misses the point about the economic impact and the economic benefit that will come from high-speed rail. Does my hon. Friend agree?

[Mrs Ellman]

I do agree. When the members of the Select Committee went to France and elsewhere in Europe to look at high-speed rail there, we were struck by the success of the system and by the enthusiasm with which it was greeted by people living in the areas that it served. Indeed, what struck us was they wanted more: more stops, more stations, more access to high-speed rail. That made a considerable impact on us.

[Mark Pawsey (Rugby) (Con)]

Does the hon. Lady think that the Spanish economy has benefited from Spain’s investment in high-speed rail?

[Mrs Ellman]

I am here to talk about the United Kingdom and an amendment concerning networks.

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

Does the hon. Lady agree with the comments of the hon. Member for Blackley and Broughton (Graham Stringer), which appeared in the Evening Standard yesterday? He said:

“The leadership have completely misjudged the mood both of the Parliamentary Labour Party and the party in the whole of the country.”

[Mrs Ellman]

I am a firm supporter of High Speed 2. I believe that it will increase capacity and create the infrastructure that is essential for the future of the nation.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Rail infrastructure in Spain has been mentioned. Studies show that the economies of both Seville and Madrid have benefited from a high-speed line, although only Seville was expected to benefit.

[Mrs Ellman]

That is an important point.

[Mrs Caroline Spelman (Meriden) (Con)]

I am sure that the Select Committee is aware of a contrasting example, namely the line between Le Mans and Tours. Le Mans invested in a local connection to the TGV route, and saw a tenfold increase in economic benefit compared with Tours, which had failed to do so. That underlines the importance of local connectivity.

[Mrs Ellman]

The right hon. Lady has drawn attention to the importance of connectivity and the importance of using the opportunities offered by high-speed rail to bring benefit to areas that are not on the line. That is an essential component. In the regions, a great deal of work has been done to assess what the benefit might be. Centro estimates that there will be an additional 22,000 jobs in the west midlands, while the Core Cities Group expects an additional 400,000.

[Mr Jim Cunningham (Coventry South) (Lab)]

My hon. Friend speaks of the economic benefits for the midlands. Cities such as Coventry will certainly not benefit from this investment; indeed, the opposite will be the case.

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[Mrs Ellman]

I think it essential for HS2 to think about how it can assist areas that do not look as though they will benefit, such as Coventry. The current process—not just today’s debate, but the consultations that are taking place and the progress of the hybrid Bill—enables important points to be raised, such as the one raised just now by my hon. Friend. I am fully sympathetic to that.

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

I am sure that my hon. Friend is aware of the tram-train pilot scheme which will begin in Sheffield in 2015, and which may lead to an excellent opportunity for trams to use under-utilised heavy rail track to connect wider city regions through high-speed rail stations. Will my hon. Friend encourage the Government to carry out a review? Indeed, the Select Committee itself might wish to look into the matter.

[Mrs Ellman]

That is an example of the kind of development that should be supported.

What concerns me is not that the principle of high-speed rail is not recognised—indeed, it is clear from what has been said by Members today that the importance of connectivity, in general and in relation to specific areas, is very well understood—but the possibility that it is not being pursued strongly enough at the national level to guarantee its consistent application throughout the country.

I referred earlier to initiatives taken in the west midlands and to statements made by the Core Cities Group, and I know that a great deal of work is being done in Manchester, but I am not sure that that is happening everywhere in the country, and I think it important for someone to take the lead. Of course work must be done in the regions. Elected Members and local businesses know their areas and are aware of the opportunities and the potential, but someone should be ensuring that the same is happening nationally, so that we do not miss out on the vital and perhaps unique opportunity to develop our network for the benefit of localities, regions, and indeed the country as a whole.

[Mr Sheerman]

When my hon. Friend’s Committee was considering HS2, she will have been made aware of the likely cost, which is estimated to be at least £80 billion. Should not the people who will be affected be allowed a vote? I agree with her about the northern hub, of which I am in favour, but if my local people had a vote, would they vote for all that money to be invested in this high-speed train? I do not think so.

[Mrs Ellman]

I do not accept the figure that my hon. Friend has given, but the people do, in fact, have a vote. They have a vote with which they can elect a Government by voting in Members of Parliament, and they have a vote with which they can elect members of local authorities—and I note that the leaders of the major local authorities in the north are speaking very loudly indeed in favour of this project.

[Karen Lumley (Redditch) (Con)]

Does the hon. Lady agree that we should commend Labour-controlled and Conservative-controlled Worcestershire—my own authority —for their foresight in predicting the benefits of HS2?

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[Mrs Ellman]

I do agree. I think that that is an excellent example of what could be done. However, I want to be sure that such examples are being followed up nationally.

[Frank Dobson (Holborn and St Pancras) (Lab)]

Let us assume that the Government’s £50 billion estimate is correct. That investment is expected to bring the greatest benefits to Birmingham, Nottingham, Sheffield, Leeds and Manchester: five cities. Does my hon. Friend think that if the £50 billion were broken up into nuggets of £10 billion, and if each city were offered that amount to promote its local economy, the five of them would decide to club together to pay for a high-speed rail link? [Laughter.]

[Mrs Ellman]

The whole point of major infrastructure is that it makes a major difference in connectivity across the country, which benefits all parts of the country. If that benefit is fragmented, it will not accrue.

I certainly support economic development in the regions, and I deplore the abolition of the regional development agencies, but I hope that the local enterprise partnerships—alone, working together, or working in transport cores—will ensure that economic benefit comes to their areas, and that the Government provide the support that will enable that effort to be private sector-led and succeed.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Obviously we are talking about a lot of money, but if it is true that the rail capacity of the three main north-south lines will be exhausted within about 15 years, what impact does my hon. Friend expect that to have on the economies of the cities north of London?

[Mrs Ellman]

My hon. Friend has made a crucial point, which goes to the nub of the matter. If those lines run out of capacity—which, indeed, they are rapidly doing—a grave blow will be dealt to the economies in the northern regions, in terms of passengers and freight. One of the reasons more freight cannot travel by rail now is the fact that no freight lines are available. High Speed 2 will solve that problem.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

A railway line is for many decades, not just for the immediate future. When considering the whole issue of connectivity and networks, did the Committee think about the implications of a longer time scale rather than some of the much shorter ones that people are currently discussing?

[Mrs Ellman]

The Committee was very clear about the fact that this is about the future, and about long-term thinking. I strongly believe that while it is always essential to scrutinise spending, it is also essential to have vision. If we do not have vision, we do not have a future. I note that the aim of Lord Deighton’s taskforce is to maximise the economic benefit that can result from High Speed 2, but I am not sure whether that includes expanding connectivity and making the maximum use of freed lines, as well as more economic development issues. I ask the Minister to give us a response at the relevant time as to who, if anybody, is in charge of expanding connectivity and the opportunities offered by HS2 so the maximum economic benefit can be realised. HS2 is needed for capacity reasons, and it produces major economic development opportunities for most parts of the country, but they must be grasped, and unless somebody is in charge of making sure that happens, they will be squandered.

[The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)]

Of the amendments in this group, I was delighted to be able to add my name to amendment 17 tabled by the Labour Front-Bench team. That demonstrates the cross-party support and co-operation we will need to deliver this project, which is so vital to the future of our country. Indeed, when I offered to add my name, I was asked, “Would you like to go on first, Minister?” I said, “No, no; I wouldn’t want people to get the wrong idea.” Our intention has always been for this landmark project to be part of a truly connected and integrated transport system, and the amendment would ensure that any preparatory work needed to integrate HS2 with the rest of our transport infrastructure can be funded using the Bill’s expenditure powers.

Phases 1 and 2 of HS2 will directly link eight of Britain’s 10 largest cities, serving one in five of the UK population. HS2 will also connect to the existing rail network, so as soon as phase 1 is built, high-speed rail trains can start directly serving 28 cities in the UK.

I welcome the reference to “footpaths” and “cycleways” in amendment 17 tabled by the hon. Member for Wakefield (Mary Creagh), and I should point out that as part of the Government’s wider commitments to boosting cycling in the UK, in August 2013 the Prime Minister announced the commissioning of a feasibility study to explore how we might create a new cycleway that broadly follows the proposed HS2 corridor. Such routes would also be open to pedestrians—presumably this is a case of great minds thinking alike. The cycleway could provide cycling and walking routes for the public to enjoy, linking local communities and stations to the countryside and tourist destinations along the way, and benefiting those living along the HS2 route.

HS2 will be at the centre of an unprecedented level of investment in the nation’s transport infrastructure. From 2015-16 to 2020-21 the Government have committed £56 billion-worth of investment in road and rail, on top of the £16.5 billion investment in HS2. We are investing more than £6 billion in this Parliament and £12 billion in the next on road maintenance, enough to resurface 80% of the national road network and fill 19 million potholes each year.

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[Mrs Ellman]

High Speed 2 is essential national infrastructure, and we are at a critical part of the process. The concerns raised in today’s debate are very important, and many of them were raised by the Transport Committee two years ago. Some of them have been addressed, but some need to be looked at further. It is now the responsibility of the Secretary of State, working with High Speed 2, to ensure that they are dealt with. The concerns relate to the environment, value for money and ensuring maximum economic benefit, including giving opportunities during construction for employment and apprenticeships across the country. The project is essential, but it must benefit the maximum number of people, and that is the Secretary of State’s responsibility as we reach this very important juncture.

Aviation Strategy

Louise Ellman Excerpts

Thursday 24th October 2013 Commons Chamber

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

I beg to move,

That this House has considered aviation strategy.

May I congratulate you on your new role, Madam Deputy Speaker?

I am pleased to have the opportunity to debate aviation strategy in the UK, which was the subject of a Transport Committee report published in May. A decision on capacity in the south-east has been in the “too difficult” box for too long. The independent Davies commission set up by the Government has been asked to submit its final report after the next general election, but the Transport Committee felt that this was too important an issue to ignore in this Parliament. I therefore thank the Backbench Business Committee for this opportunity to debate our findings.

Our main focus was inevitably on the controversial subject of runway capacity in the south-east. We concluded that the expansion of Heathrow was the best option, because that recognises the importance of aviation to the UK’s economy and the need for more hub capacity to maintain international connectivity, and reflects consideration of the feasible options. The report considers future demand forecasts for aviation, the impact of aviation growth on the global and local environment, the importance of hub airports in securing connectivity, the role of airports outside the south-east, and aviation taxation, especially air passenger duty, and I will refer to all those issues during the debate.

It is vital to recognise the importance of aviation to the economy. In 2011, the UK’s aviation sector had a turnover of some £53 billion and generated about £18 billion of economic output. It employs more than 220,000 workers directly, and it has been estimated that the total number of jobs supported could be as high as 921,000. Aviation is also important for the lives of many citizens by providing transport, and trade and leisure, links to the rest of the world. Demand for aviation links is growing. In 2012, UK airports handled 221 million passengers, which was 1.4 million more than in 2011. The latest passenger forecasts predict that demand at UK airports is set to grow. Unconstrained forecasts—those in which there are no airspace constraints or capacity limitations—show that passenger numbers will grow to 320 million a year by 2030 and 480 million a year by 2050. It is likely that there will also be greater demand for air connections to new destinations.

The UK has direct air links to more than 360 international locations. There are, however, serious and growing concerns about poor connectivity between the UK and some of the world’s emerging markets, such as the BRIC group of Brazil, Russia, India and China. There are particular concerns about the absence of links to China’s manufacturing centres. The lack of capacity at Heathrow, the UK’s only hub airport, is reducing the UK’s connectivity to important destinations. For many years, Heathrow has operated with two runways at full capacity while competitor hubs such as Paris, Frankfurt and Schiphol have benefited from four to six runways each. The growth of large hubs in the middle east, such as Dubai, has also threatened the UK’s position as an international hub. If the necessary hub capacity is not available in the UK, airlines use competitor hubs to places such as Schiphol, Frankfurt and Madrid, and if no action is taken, the UK will continue to lose out.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

What weight would the hon. Lady give to the warning from Michael O’Leary of Ryanair, who says that the UK’s current approach to airport expansion will mean that another runway will be built at Heathrow and at Gatwick some day, but it will be done in an incredible hurry, will not be well planned, and will be the usual sticking-plaster solution?

[Mrs Ellman]

It is undeniable that additional capacity is needed, so we need to make decisions now. We may well need to make more in the future and I will refer to them in due course.

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

I congratulate the hon. Lady and her Committee on their excellent work. On capacity, does she agree that there are more cost-effective options that could better meet the need for capacity than proposals to build a £70 billion new estuary airport? I declare an interest, because it would be located near my constituency.

[Mrs Ellman]

I am about to address that very point. The situation could be dealt with in three ways: build an entirely new hub airport; link existing airports through high-speed rail to form a split hub; or expand one or more existing airports.

Many of the proposals for a new hub airport would locate it to the east of London in the Thames estuary area. There are significant challenges associated with building such an airport, including the difficulty of designing airspace in an already crowded environment, and the need to mitigate bird strike and to deal with environmental challenges such as future sea-level rises and the risk of flooding. Noise would also become an issue for the many people who inevitably would move into the area.

We commissioned specific research into the options and it became clear that, in addition to the factors I have mentioned, the first option would inevitably lead to the closure of Heathrow, threatening more than 100,000 jobs, which would be devastating. It would also require a significant public subsidy of up to £30 billion towards surface infrastructure and compensation for the closure of Heathrow, which would be on top of the tens of billions of pounds that it would cost to build the new airport itself.

The second option is to link existing airports through high-speed rail to form a split hub, perhaps involving Gatwick and Heathrow—Heathwick. That was rejected because of uncompetitive connection times for transferring passengers, especially compared with the transfer times of competitor hubs overseas. The third option is to expand one or more of our existing airports. We looked in detail at the possibility of expanding Gatwick and/or Stansted as alternatives to the expansion of Heathrow, but new runways alone, distributed across a number of airports, will not provide a long-term solution to the specific problem of hub capacity. We concluded that expansion of Heathrow with a third runway would be the best way forward, and that was also the solution that British business throughout the country overwhelmingly favoured.

[Mr Andy Slaughter (Hammersmith) (Lab)]

I appreciate the work the Committee has done, but I wonder whether it has been somewhat bamboozled by the public relations operation that is Heathrow. The fact is that it has been the only game in town for a number of years. To dismiss the option of expanding other south-east airports as a split hub, rather than viewing them as a network serving the whole of the huge city of London and the south-east, is somewhat too glib.

[Mrs Ellman]

I thank my hon. Friend for his comments. Our report looks specifically at his suggestions, but we came to the very clear conclusion that the expansion of Heathrow was the only realistic option. We recognise that there might be a case for additional runways at Gatwick and perhaps Stansted, but that is not an alternative to additional hub capacity at Heathrow.

We acknowledged the need to address the very real environmental objections that may arise. In particular, noise in excess of 55 dB is a major problem for more than 700,000 people in the airport’s vicinity. We have suggested a number of steps that could be taken to mitigate that serious issue. Planes are getting quieter, but aircraft manufacturers must continue to develop quieter aircraft. To facilitate that, we recommend that the Government, through their involvement with the International Civil Aviation Organisation, try to influence global noise standards. Airports themselves should encourage airlines to take older, noisier aircraft out of service at the earliest opportunity, and people living under the flight path who are affected by excessive noise should be adequately compensated. We have called on the Government to develop a comprehensive, nationwide approach to noise compensation. The Civil Aviation Authority should review existing flight paths and landing approach angles to reduce noise pollution.

Local air quality is also important, and the Government should draw up plans to ensure that the EU limits on air pollutants are met. We were especially concerned about unnecessary emissions that are generated due to the stacking of aircraft over London. We recommended that NATS, the air traffic controllers, should carry out modelling work to identify the extent to which stacking might be reduced if an additional runway was built at Heathrow. Ultimately, any plans for increased aviation capacity must take account of progress on global initiatives to deal with emissions.

It is vital to remember that a hub airport is about serving the national interest, meaning that 63 million people in the UK are affected. Local problems must be addressed, but that must be done in the context of considering the needs of the UK as a whole.

Our report looked at the important role that is played by airports outside the south-east. We hope that increased capacity at Heathrow would improve connectivity to other UK regions as more slots became available. The Government should do more to reduce the barriers that are faced by airports when trying to secure new routes, such as through better marketing or the introduction of an unrestricted open skies policy outside the south-east. The introduction of an air passenger duty holiday, which we have recommended, would also encourage the development of new routes.

In the course of our inquiry, we heard numerous concerns about the high rate of air passenger duty, which is damaging to UK plc and puts UK aviation at a disadvantage compared with our European competitors. We were disappointed that the Government rejected our recommendation to reduce significantly or abolish air passenger duty and we are concerned that they show no willingness to undertake a full review of its economic impact.

Parliament has shied away from deciding whether and where to permit additional aviation capacity in the south-east. That is a prime example of a failure to recognise our infrastructure needs. The Davies commission will produce an interim report at the end of this year with recommendations for immediate action to improve the use of existing runway capacity over the next five years, as well as a short list of options to address capacity over the longer term, but the commission’s final report will not be published until after the general election in 2015.

We must act decisively on this issue before we lose our competitive edge as a global hub for aviation. The commission must provide a robust and independent evidence base for future decisions, as well as recommendations for action. The failure to take a decision has consequences for the UK because it puts our competitiveness and economic success at risk. When the Davies commission reports, it will be time to decide, and that will be the challenge for the 2015 Parliament. I hope that today’s debate assists the House in identifying the key issues so that a conclusion that is in the interests of the UK can be reached.

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[Mr Raynsford]

The hon. Gentleman makes an important point about bird strike, but it occurs at Heathrow. A number of aircraft are affected by bird strike at Heathrow—and, indeed, at other airports internationally, including Hong Kong, which is in a waterside location—so these problems have to be addressed and are addressed by airlines at the moment. It is not at all inconceivable—indeed, it is absolutely feasible—to take appropriate measures to provide safeguards against that particular hazard and some of the other hazards that might be encountered—instances of fog in the estuary, for example. Although evidence suggests that there is no greater incidence of fog in the estuary than there is at Heathrow, it is an issue that needs to be taken into account. Practical issues certainly need to be addressed, but I do not accept that this problem is a showstopper, which prevents us from considering the option.

Other hugely important issues for future planning include the way in which people get to an airport. Heathrow’s problem is that is located very close to the M4-M25 junction, which is already a heavy generator of air pollution and traffic congestion. The modal split in respect of access to Heathrow is heavily dominated by the motor car. One of the great advantages of the estuary airport, which I am afraid the Select Committee did not recognise in its report, is that it would effect a very considerable modal shift by having a far greater proportion of passengers—estimated at 60% by advocates of the Foster-Halcrow scheme on the Isle of Grain—coming by rail.

Looking at the Select Committee report, it was a little disappointing to see an access map based on drive times being used to argue the case that access to the estuary site would be more difficult and slower than at Heathrow. Surely we should be doing our best to try to discourage driving to airports and to encourage the modal shift, which will also help to reduce air-quality problems.

[Mrs Ellman]

Is my right hon. Friend concerned about the £30 billion cost of an estuary airport and the impact of the closure of Heathrow, with the massive numbers of jobs involved there?

[Mr Raynsford]

The £30 billion cost is, of course, entirely conjectural. I understand that the Select Committee took evidence from Oxera, but as its report says:

“Oxera has used the following assumptions, based on recent proposals, although Oxera has not tested the validity of these estimates.”

I have to say that the figures showed a cost for a third runway at Heathrow of £8 billion to £9 billion, whereas we now see from the latest Heathrow proposals that it is likely to cost a minimum of £18 billion. I therefore do not think that the figures in the report necessarily support my hon. Friend’s case.

--- Later in debate ---

[Mrs Ellman]

The hon. Gentleman is wrong. The Committee looked at the future and the possibility of high-speed rail links between London and Birmingham, and it says that that would produce a different situation.

[Mr Jenkin]

I perfectly accept that, but we are committed to a hub. We need a hub, and we need a decision to build a four-runway hub now. Once we have reached that conclusion, all the logic drives us towards having a Thames estuary airport.

Not a single objection has been raised to a Thames estuary airport—not cost, not bird strikes, not sea level rise—that is a showstopper; and then there are the advantages of a Thames estuary airport: it is achievable, and achievable within a predictable time frame; and its connectivity is better than that of any other possible site for a four-runway hub, and that almost includes Heathrow. Because it is already almost on the HS1 route, it has better rail connections to European onward destinations than any other possible site. It is also closer to the City of London by rail time than Heathrow. As the right hon. Member for Greenwich and Woolwich said, its connectivity by non-road is better than any other possible site, so that puts it firmly on the agenda, as does the fact that east of London is where we need regeneration and investment.

This is the visionary approach that should be adopted by the Davies commission. The estuary airport is the best environmental option because a bird habitat that would be affected can be replicated and replaced—or even doubled—elsewhere, and the Ramsar sites can be moved. It is the best safety option, because there would be no more flying over populated areas, and it is the best noise option, too. Some 750,000 people live under the 50 dB-plus noise footprint of Heathrow, which is why a decision there is impossible. Almost no people will be living under such a noise level around the Thames estuary airport, which is why this is a no-brainer.

--- Later in debate ---

[Mrs Ellman]

I thank all Members who have participated in this very well-attended Backbench Business Committee debate. There is overwhelming support for additional hub capacity to support our economy. I hope that hon. Members’ contributions will assist the Davies commission to come to the correct conclusion. This issue will not go away; it is about the future of our country.

Question put and agreed to.

Resolved,

That this House has considered aviation strategy.

Coastguard (Maritime Incident Response Group)

Louise Ellman Excerpts

Thursday 17th October 2013 Westminster Hall

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

I welcome the opportunity to serve under your chairmanship, Mr Rosindell, and to debate the Select Committee on Transport’s second report on the coastguard service since the 2010 election. I pay tribute to the nation’s coastguards—both professional staff and volunteers—who provide an essential emergency service, protecting life and limb at sea throughout the year in all weathers.

Last year, Her Majesty’s Coastguard dealt with 2,859 incidents—a 23% increase on the previous year— including rescuing swimmers, divers and people falling off cliffs, cut off by tides and endangered by boat failures. The changes are wide-ranging and involve the maritime rescue co-ordination centres, search and rescue and the maritime incident response group, which deals with firefighting and chemical hazards. I am concerned about all those aspects of the service, and I know that there are ongoing issues, in particular about arrangements for emergency towing vessels.

Today, however, I will focus on changes to the maritime rescue co-ordination centres, which handle calls for assistance and co-ordinate rescues. Reform has been discussed for several years, and the current proposals date back to 2010. The proposals raise major concerns, which is why the Transport Committee has paid close attention to them. We published our first report in 2011 and followed it up in 2012, and we are raising the issue again here today.

In 2010, there were 18 centres spread around the UK coastline, of which the Government proposed to close 10. Their work was to be taken over by the two new 24-hour maritime operations centres in Aberdeen and the Solent area. Five co-ordination centres would remain open during daylight hours only. Under those plans, the number of coastguards would fall from 596 to 370 by 2014, a reduction of 38%.

The main rationale for the changes was the claim that individual co-ordination centres were largely independent of each other and that, as a result, the system as a whole lacked resilience. If a centre was affected by a power cut or overwhelmed by work, we were told, other coastguard stations could do little to help. The proposed maritime operations centre would be able to deal with incidents all around the country and would be able to allocate work to remaining co-ordination centres to iron out peaks and troughs in work load.

The proposals unleashed a storm of protest. There was alarm about the potential loss of crucial local knowledge, particularly in parts of Wales and Scotland where local landmarks can have more than one name in different languages. Local knowledge includes awareness of place names, dialects, tides and currents, geography and the volunteer rescuers available in the area for which the coastguard is responsible. Claims that such local knowledge could be replaced by technology were met with incredulity.

There was alarm, too, about the concept of daylight-only coastguard stations. Would it really be safe to hand over co-ordination of a major incident to new staff, perhaps hundreds of miles away, because it was time to finish work for the day and nightfall had come? Redundancy plans unsettled staff, as did talk of redefining roles, grades and terms and conditions. Many coastguards faced a choice between accepting a new role at a new maritime operations centre in a different location or leaving the service.

In our original 2011 inquiry, we visited coastguards in Falmouth, the Clyde and Stornoway and spoke to coastguards from many other co-ordination centres. We shared many of their concerns about the original plans. In particular, we asked the Government to reconsider introducing daylight-only co-ordination centres, because of the difficulty of handing over rescues. We also highlighted concerns about the loss of local knowledge and the limitations of technological alternatives. I will return to that issue shortly.

The Government published a revised plan in July 2011, which took account of some of our concerns. That plan is now being implemented, but disquiet remains. There will be one maritime operations centre in Fareham, backed up by a co-ordination centre in Dover and eight other co-ordination centres. Eight centres will close; Clyde, Yarmouth and Forth have already shut down. The remaining centres will be open around the clock. The Government have abandoned the concept of daylight-only centres, and I welcome their change of mind.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The hon. Lady is making a good speech, highlighting the Government’s indecisive “suck it and see, make it up as you go along” approach to maritime coastguard stations in 2011. The same thing is happening to the emergency towing vessels. In the report’s conclusion, the Transport Committee asks the Government to explain how an emergency towing vessel stationed in the Northern Isles can serve the west coast effectively. Is that not a mirror image of what the hon. Lady outlined in respect of the coastguard stations?

[Mrs Ellman]

I thank the hon. Gentleman for his comments. He highlights a crucial issue causing major concerns that have not yet been resolved.

To return to coastguards and co-ordination centres, under the revised proposals, the number of professional coastguards will fall to 436. The new maritime operations centre was due to be operational by April 2014. That has now been delayed until September 2014. Co-ordination centres at Solent, Portland, Brixham, Liverpool, Swansea and Thames are due to close after that.

We published a second report on the revised proposals in December 2012, and we continue to receive deeply disturbing information from coastguards about staffing and morale in the service. It is to those issues that I now turn. The Committee accepted that there is a case for a national maritime operations centre to manage particularly large or difficult incidents, which could overwhelm an individual co-ordination centre or two centres working together. However, we remain unclear about what coastguards at the national centre would do at times when such an emergency was not taking place. Coastguards giving evidence to us said that they had no idea how the new maritime operations centre and the co-ordination centres would work together.

In their reply to our report, the Government spelled out in more detail what they saw as the main responsibilities of the maritime operations centre, particularly in co-ordinating the work of coastguards across the country. The recent agreement on the roles and responsibilities of coastguards under the new system might also bring greater clarity in this area. Will the Minister explain how the new system will work—not just during a major incident, but at quieter times?

We heard strong criticism of the decision to close three maritime resource co-ordination centres before the new system is in place. For example, Shetland coastguards explained that they had to use their own time to gain local knowledge of parts of the northern Scotland coastline for which they would be responsible after the closure of the Forth station. There have been continuing concerns that some co-ordination centres are now severely overstretched.

We were told in March this year that, already, staffing at Belfast co-ordination centre had been below the risk-assessed staffing level on 124 occasions out of 158 shifts. At the same time, Yarmouth co-ordination centre, which has since closed, was moved to daylight-only operations because of staff shortages. It is testament to the professionalism of the service that the closures have been accommodated without major incident.

It was widely believed that ministerial statements and Maritime and Coastguard Agency documents had given a commitment that the maritime rescue co-ordination centres would not be closed until the new system was put in place. This was denied, but the language used by the Minister’s predecessor in the House and some of the documents published by the Maritime and Coastguard Agency back in 2011 were at best ambiguous.

One key area of the dispute is the importance of local knowledge. Coastguards emphasise its importance in their work, and they are tested on their local situational knowledge. Knowing that a particular rock or headland has three names in two languages can help to ensure that assistance reaches people in distress as quickly as possible. The Maritime and Coastguard Agency discounted its significance, considering that local knowledge could be stored electronically, so that it could be used by any coastguard based anywhere. Indeed, when we heard evidence from the chief executive of the Maritime and Coastguard Agency, he seemed to disregard the importance of critical local knowledge, which is about geography, tides and currents, language and dialect, and the availability of additional volunteer sources for rescue in the area concerned.

Coastguards remain concerned about the issue. They challenge whether the knowledge built up over many years by experienced coastguards working in their areas can be replaced by databases. Coastguards taking on new areas of responsibility will still be assessed on their understanding of local factors, although it is hard to see how this will apply to the coastguards in the new marine operations centre. Perhaps the Minister will explain what importance he attaches to coastguards having local knowledge and how it will work under the new system and be tested.

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

I am sorry to interrupt my hon. Friend—I sense that she might be concluding. Her Committee has obviously done another thorough job in monitoring the good work of the shipping Minister and his officials under her excellent leadership, but can she give us a sense of what progress she thinks has been made compared with where we were last year and the year before? Is her Committee more worried about the situation? Is there the same level of anxiety, or is she more reassured because of what she has heard in the various examinations that her Committee has undertaken?

[Mrs Ellman]

I thank my hon. Friend for his comments and for the excellent work that he did in a previous capacity. It is good to hear from him. I remain concerned about the situation. There is now more clarity about what exactly is going to happen, but major questions remain. That is why I am pursuing them today. I hope the Minister will be able to give reassuring answers.

Staffing and morale were both raised with the Committee as significant problems. We heard concerns about the level of vacancies in the service, the proportion of coastguards on fixed-term contracts and the loss of experienced staff. The coastguard service’s vacancy rate doubled between December 2010 and November 2012, when it stood at 13.8%. In other words, nearly one in seven posts in the service was vacant. Can the Minister tell us what the current vacancy rate is?

Going back to my hon. Friend’s comments, I continue to receive representations from coastguards. These include allegations of stress caused by understaffing, lack of leave and unreliable communications equipment. The high level of vacancies puts strain on coastguards, who must work harder to fill the gaps. What assessment has the Minister made of the high level of vacancies? Has sickness absence increased? Does the Department even monitor coastguards’ morale? What actions are management taking to help staff get through what is obviously a difficult and unsettling period of change?

Low morale and disillusionment with management were reflected in all the evidence the Committee received from coastguards. We have received further correspondence that reinforces that since our report was published. For example, we were told that the new contract offered to the coastguard

“increases the number of days worked, reduces the number of days off, reduces the annual hours leave, reduces the opportunity for leave, and reduces the pay by regrading the majority of the older staff to a lower level of pay, capping the shift allowance at a low rate and removing allowances for shoes and telephone line rental—all in all, these changes are unworkable to existing staff and are surely a case for constructive dismissal”.

We have also heard complaints from volunteer coastguards about the operation of the Maritime and Coastguard Agency. Again, long-standing volunteer coastguards feel that they are no longer valued and are subsequently leaving the service. I have received representations from my hon. Friend the Member for Barrow and Furness (John Woodcock) that nine out of 13 volunteer staff at the Walney coastguard have resigned, claiming they have been bullied by MCA staff. Will there be an independent investigation into that? It is clearly a matter of grave concern.

Our report concluded that the loss of experienced coastguards was one of the most significant risks to the successful implementation of the Government’s modernisation programme. Everything we have heard since has confirmed that view. The Maritime and Coastguard Agency now has to manage another round of MRCC closures and find sufficient qualified staff to fill positions in the new maritime operations centre. This is a major challenge. Many experienced coastguards may prefer to leave the service than move to Fareham to take on new roles. Will the Minister tell us when recruitment of MOC staff will begin and what mix of skill and experience he will want staff working there to have? What assistance will be available to coastguards who wish to relocate to Fareham?

The coastguard reform programme will have been stretched over five years when it finally comes to an end in 2015. That is five years of uncertainty and worry for coastguards about their jobs, pay, and terms and conditions. My concern is that by the time the new system is operational, many experienced coastguards will have left, weakening an essential emergency service. I hope that the Minister can demonstrate today that he is actively trying to ensure that that does not happen.

The coastguard service is about saving lives. It is staffed by dedicated people. It deserves the unequivocal support of the Minister and the Maritime and Coastguard Agency. I hope the Minister can assure us today that he is committed to securing the confidence of those who work in this essential service, so that the public’s safety can continue to be protected.

--- Later in debate ---

[Stephen Hammond]

I do not need to write to members of the Select Committee about that because Sir Alan Massey, the chief executive of the Maritime and Coastguard Agency, and I set out in some detail how those transitional arrangements will work. We set out the number of visits that each coastguard is expected to undertake and the time period for them to do so.

If the hon. Gentleman has the chance, I hope he will look at the evidence session, which I hope will reassure him. [Interruption.] If he is not happy with that, I will happily respond further, but I think he will find that our evidence sets out the arrangements.

[Mrs Ellman]

Will the Minister give us an absolute assurance that he is satisfied that there is an official programme to ensure that coastguards increase their familiarity with new areas? The issue arising in the evidence taken by the Select Committee is that coastguards are working on that in their spare time, rather than as an official part of business.

[Stephen Hammond]

I am aware that the Select Committee took some such evidence, but, equally, the chief executive of the Maritime and Coastguard Agency gave his assurance that time was being made available for coastguards to do that, so it need not be done in anyone’s spare time. He also said that local knowledge would be in place up to two months before any coastguard station closing.

We also discussed local knowledge in some depth when I was before the Scottish Affairs Committee, and I remember that one Committee member said—my hon. Friend the Member for Argyll and Bute (Mr Reid) may also remember, if it was not his good self—that there were three places, all within a mile of each other, known by the same name, so that even the Member with his local knowledge could not be certain whether he directed people to the right place the first time.

Local knowledge is important—retaining it and having knowledge transfer—as is the new vernacular system. We must recognise, however, that at every stage local knowledge is only one part of what should be in place. With the new modern systems, it is incredibly important that we rely not only on local knowledge, but on modern mapping systems and vernacular place-name capture, which will undoubtedly be an improvement.

In November 2011, in response to the second debate, another set of decisions was announced, together with the timetable for the closures and for the transition to the national network. Since then, the MCA has managed the closures of Forth, Clyde and Great Yarmouth, the centres earmarked for closure ahead of establishing the new national Maritime Operations Centre—due to the building leasing arrangements for Clyde and Great Yarmouth, and to reflect the robustness of the existing technical infrastructure between Forth and the centre at Aberdeen.

Before each centre closed, the neighbouring centres increased familiarity with the new patch. Some officers transferred from the closing centres, and experts with local intelligence briefed officers in the receiving centres—a system known as pairing—so that local information was retained. A few weeks ahead of each closure, coastguards at the receiving centres took on full responsibility, while the closing centres went into shadow running mode. That gave everyone confidence that the systems would be and were working and that the receiving officers could manage the larger areas competently. I hope that the House will join me in paying tribute to the professionalism of the coastguard officers involved in managing that process over the past 12 months, which has been a credit to those involved. The experience reaffirmed our belief that other closures can and will be managed safely and within the time set out, although we are not complacent.

To pick up some of the points made in the debate, I hope that the hon. Member for Liverpool, Riverside heard my comments about local knowledge and, in particular, developments with Ordnance Survey. She also asked what MOC staff would be doing when not managing major incidents. They will of course be providing routine operational cover for areas of the UK coastline, so that there is even stronger and better resilience in coverage. That will include vessel traffic monitoring, safety information and maintaining an updated national risk picture.

There was some concern that coastguards had expressed the view that, overall, they would have to work longer hours. The new contract that has been agreed with the Public and Commercial Services Union increases the number of days, but reduces the number of nights. Therefore, staff will have more whole weekends off than under the current arrangements, while leave for existing staff remains as it has always been. I hope that the hon. Lady can accept my reassurance and see that we have taken on coastguards concerns.

We and the MCA in particular have made great progress in establishing the new national arrangements for infrastructure and technology. The new national MOC near Fareham is being equipped with the latest operational kit; it will be ready for training to start in January and for full operational running by next September. Acceptance checking of the refreshed emergency response systems is progressing well, and that will shortly allow the MCA to move into an extended period of operational testing.

A number of Members who have contributed today made the point, rightly, about the slower progress in settling the new package of terms and conditions for roles. That reflects the complications of agreeing a new package for coastguards, given the increased responsibilities, the commitment under the civil service reform plan to modernise the employment offer in the public sector and the consequent need for agreement. Without agreed terms and conditions, it would not be possible to start recruitment for the new roles and responsibilities.

The good news is that the MCA has agreed a new set of terms and conditions with the Treasury and a firm offer is on the table, which has the support of the PCS’s elected representatives in the MCA. I hope that the offer will be accepted. To be clear, the new jobs will have significantly increased responsibilities, which we have recognised with a significantly enhanced pay and grading structure. For example, the lowest entry level for coastguard officers is now one civil service grade higher, which means being paid 19% more than today. As I have said, there will be some revision of working patterns in the package, but the shift systems will match demand much better, according to the seasons and the time of day. Coastguards in all operational centres will therefore have a reduced number of night duties, with more full weekends off during a year. The offer also includes a commitment to at least 60 hours of continuous professional development each year.

Recruitment for the new roles will start in November, and that process has also been agreed with the PCS. I hope and expect that many existing coastguard officers will now opt to stay within the service and to apply for the new roles as they become available. Others may wish to leave, and we will support them if they wish to consider taking voluntary redundancy. In the interim, the coastguard service has been committed not to leave vacancies unfilled until the roles were agreed—there has been a continuing operation to recruit new officers. The MCA has now successfully recruited 59 new coastguards, providing some resilience. There was particular concern about the low number of shifts in places such as Belfast, but we have seen success in recruiting there, as well as in Falmouth, Solent and elsewhere. I am pleased that the recruitment process has continued and is continuing; a point was made about the recruitment of some new officers on fixed-term appointments, but, to be clear, such recruitment was explicitly agreed with the unions first, to avoid any perception of unfair competition for future jobs.

--- Later in debate ---

[Mrs Ellman]

I thank the Minister for his remarks; his answers bring clarity to some important issues. He began by saying that safety would not be affected, but that, indeed, remains the challenge.

Oral Answers to Questions

Louise Ellman Excerpts

Thursday 12th September 2013 Commons Chamber

[Mr McLoughlin]

I am prepared to have the meetings with the Scottish Government. I announced last October that we would be looking to take the line to Scotland. That work is ongoing.

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

The Secretary of State referred to funds to be invested by Network Rail in the classic lines. Will he give an assurance that, in addition, there will be sufficient funds to invest in new passenger and freight services on lines freed by the development of HS2?

[Mr McLoughlin]

Indeed. The hon. Lady who chairs the Transport Committee embarks on an important point. One key problem that any future Government will face is that of capacity on the network, as well as speed, and this line is also very much about capacity. If we made the improvement that some people suggest on the present line, it would lead to capacity increases of about 53% between London and Birmingham. HS2 will lead to a capacity increase of 143%. That is why it is so important to meet the objectives that we both have.

Rail 2020

Louise Ellman Excerpts

Wednesday 3rd July 2013 Commons Chamber

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

I am pleased to have this opportunity to debate the Transport Committee’s “Rail 2020” report, which we published in January. The report sets out our vision for the railway to the end of the decade. Our main focus was considering the Government’s plan to achieve efficiency savings of £3.5 billion by 2019, and its implications for passengers and taxpayers. Currently, the railway costs the taxpayer around £4 billion each year. These issues are highly relevant to today’s consideration of the departmental estimates.

It is important to put today’s debate into context. In many ways, the railway has been a success. The number of passenger journeys has almost doubled since privatisation from 735 million in 1994-95 to 1.6 billion in 2011-12; passenger miles travelled have doubled over the same period to 35.4 billion; and rail freight has expanded by over 60%, with 11.5% of freight now conveyed by rail. There has been investment in major projects such as Crossrail and Thameslink in London, with more ongoing or planned work to electrify 800 miles of track and improve rail services in the north with the northern hub.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Can the hon. Lady tell me whether she or her Committee have made any assessment of the “Rebuilding Rail” report, which says that we could reduce fares if we could reduce the fragmentation of the rail system by bringing the rail back into public ownership?

[Mrs Ellman]

Addressing fares is an important matter, which I shall refer to later, although we have not specifically considered the report that the hon. Lady mentions.

An important aspect of our inquiry examined Government policy on franchising, particularly in relation to securing value for money. During our inquiry, franchising policy was thrown into disarray when the competition for the inter-city west coast franchise was cancelled as a result of major errors made by the Department for Transport. We published a report on that issue earlier in the year.

A number of serious mistakes were made by officials, but there were also policy failings for which past Ministers were ultimately responsible. The review of franchising that Richard Brown undertook at the request of the Department concluded that it was not sensible to let a 15-year contract for the west coast franchise without a break clause. He also drew attention to the difficulties caused by cutting back on resources while attempting to meet an ambitious timetable. The Department has now published a new timetable. The postponement in tendering for new franchises means a delay of 26 years, with consequential uncertainty for the industry and potential financial implications. I will return to that issue later.

Rail poses a number of policy challenges. Increasing numbers of passengers have led to overcrowding on some routes, and capacity constraints can rarely be resolved quickly or cheaply. It is also important to remember that rail investment is vital for regeneration as well as for relieving overcrowding. The provision of rolling stock is complicated and expensive. Fares are often too high and difficult to understand, and a wide variety of fares are often available for the same journey, from heavily discounted “advance purchase” tickets to very expensive “anytime” walk-on fares. The structure of the industry is complex, and there is suspicion that it creates opportunities for money to leak out of the system, some of it in the form of unjustified profits.

The rail subsidy peaked at £7 billion in 2007-08, and the previous Government asked Sir Roy McNulty to consider how to secure value for money. His report was published in 2011. His most striking conclusion was that there is a 40% efficiency gap between the UK railway and four European comparators: France, the Netherlands, Sweden and Switzerland. Reasons given for that disparity include the fragmentation of the rail industry, poor management, problems with franchising, and cultural factors. He made a wide range of recommendations aimed at achieving a 30% cost reduction in the industry by 2019.

Although the rail subsidy has fallen in recent years, it is higher now than in the years before privatisation. In real terms, the passenger railway costs 50% more than in the early 1990s, and there are a number of reasons for that. Increased demand has led to new capital projects and rolling stock.

[Kelvin Hopkins (Luton North) (Lab)]

My hon. Friend may be interested to remember a report by Catalyst which found that productivity under British Rail was, at that time, the highest in Europe. Since then, things have changed dramatically.

[Mrs Ellman]

My hon. Friend makes a relevant comment.

As Network Rail’s debt has grown, more money is being spent on servicing that debt than ever before, and train operating costs have increased. Rail subsidy is necessary. Few rail lines would be profitable on a commercial basis, and even potentially profitable lines would lose passengers if the national network was cut back. There are good environmental and social reasons to subsidise the railway, and we were pleased to hear that the Government share that view.

Although the Government want to cut the subsidy, it is not clear what level of reduction they seek and under what time scale. Neither is it clear exactly where the subsidy goes at present. The Department should articulate more clearly why it subsidises rail and what taxpayers get for their money. We recommended that the Government consult on and publish a clear statement of what the rail subsidy is for and where it should be targeted. The Department’s reply was disappointing and focused on practical difficulties because of current funding arrangements. There is scope for much more work in that area.

This issue illustrates the lack of transparency in the rail industry. That has now started to change with recent work by the Office of Rail Regulation and the disclosure of wide variations in the financial performance of different routes and operators. Establishing why those variations occur will be crucial to ensuring that the rail subsidy is well spent.

Securing the efficiency savings indentified by McNulty will be challenging, particularly as they require different parts of the industry to work together in new ways. More than £1 billion is expected to be saved from train operating costs. I am concerned, however, that the savings have been put at risk by the Department’s problems with franchising. In many cases, existing franchisees will be awarded new contracts to run services for as long as four years. The Department will struggle to drive a hard bargain with existing operators without going to the market. I ask the Minister whether the Department’s decision to prioritise the re-tendering by 2015 of the east coast main line, currently operated by the Department’s company, Directly Operated Railways, will weaken the Department’s bargaining power as it seeks to extend franchises. It is clear that the Department does not want trains to be run by the public sector.

[Graham Stringer (Blackley and Broughton) (Lab)]

My hon. Friend is making a powerful point. Does she agree that the Government are trying to privatise the east coast main line for completely ideological reasons, and not for reasons of financial benefit? The east coast main line gives £563.4 million back to the Exchequer, which is almost twice as much as Virgin gave back over a two-year period. It also gets only one seventh of the subsidy per passenger mile, so there can be no other reason than ideology. The plan is undermining the Government’s negotiating position as they extend the other franchises by nearly 26 years.

[Mrs Ellman]

I thank my hon. Friend for his comment. The Minister was questioned in the Select Committee and it became apparent that the Government’s decision was to do with Government policy. I, for one, did not hear a compelling value-for-money reason for the decision.

There are a number of ways of assessing whether a franchise delivers value for money. The letter that the Minister sent to the Committee on 4 June stated that, over the three years 2009-10 to 2011-12, the inter-city east coast franchise produced a net return to the Department of £563 million. The letter also stated that, over the same period, the west coast main line made a net return of £290 million. The Minister certainly did not accept that that meant that the east coast franchise produced better value for money, but I am simply presenting the facts in the letter as a contribution to the debate. One consequence of the decision has been the postponing of the re-letting of the west coast franchise by 29 months, to April 2017. The previous timetable had been announced as recently as November. It is a matter of concern that such constant change is unsettling for the industry.

We have already seen two direct awards to current operators, and neither has demonstrated how the Government can secure a better deal for passengers or taxpayers. In the case of the west coast franchise, we were told that there might be new services to Blackpool and Shrewsbury, but they have not materialised. The old Essex Thameside franchise paid money into the Department. The new one, a directly awarded contract to run until September 2014, will cost the taxpayer money. Will the Minister acknowledge that there will be problems in achieving the McNulty savings in the light of the franchising fiasco and its aftermath?

The Committee recommended that the Department should strengthen its commercial capability in relation to assessing franchises, that it should consider franchises being let and managed by a Department agency or arm’s length body, and that it should consider spreading premium payments over the full length of the franchise. We suggested that franchise periods of seven to 10 years would be appropriate while the situation was being reviewed. Indeed, a review is now taking place, and we hope to hear the Government’s conclusions shortly.

During our inquiry, the rail unions argued that the privatised structure was the main cause of inefficiency in the industry, and that renationalisation would bring costs down. McNulty rejected that argument, saying that renationalisation would

“take years to complete, cause major diversion of effort, incur massive costs, and delay progress on improvements”

that were under way.

[Kelvin Hopkins]

It has been said many times that all that is needed to solve the problem is for the franchises to be awarded to Network Rail.

[Mrs Ellman]

Having considered all the evidence before it, the Committee decided that McNulty’s proposed methods of achieving efficiencies should be given a chance, although some concerns were expressed. We felt that if the McNulty savings did not materialise, the arguments for more far-reaching structural changes would be compelling.

We have identified a number of issues that the Government must get right if the railway is to continue to grow and become more efficient. The McNulty recommendations include calls for ticket office hours to be reduced, for driver-only operating to be the norm, and for salary restraint. The Committee considers that any changes in staffing, terms and conditions and salaries should be made in the context of a wider programme of changes made throughout the industry and after full consultation with trades unions. Any changes in the numbers and duties of station staff should not be pursued solely to reduce costs, but should reflect changes in passenger ticket-buying behaviour, and should be designed to improve passengers’ experience at stations, including their perception of safety. We were very concerned about the possibility that reducing staffing at stations and on trains would make the railway less safe, particularly at night, and would deter women and vulnerable users from travelling by train.

[Caroline Lucas]

Given that the train operating companies depend on public subsidies, does the hon. Lady agree that it is entirely wrong for those same companies to hand over an estimated 90% of their operating profits to shareholders, rather than reinvesting them in the staff and safety provisions to which she has referred?

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[Mrs Ellman]

That is a very interesting point. The thrust of our inquiry concerned how efficiencies could be achieved without jeopardising passenger safety. As I have said, the Committee felt that the McNulty changes should have a chance to succeed, but that if they did not, other measures should be considered. We intend to return to the issue of safety in the inquiry on policing the railway that we recently announced.

We have no objection in principle to the development of joint working between Network Rail and train operators through, for example, the Rail Development Group and rail industry alliances, but new arrangements must not compromise safety. We will consider that in more detail in our proposed new inquiry on safety at level crossings. The interests of the travelling public must be protected throughout the partnerships, and so must the interests of freight, which, by its very nature, cannot be involved in a partnership in the same way as passenger rail.

I have discussed financial aspects of franchising, but other aspects are also important. One question that remains unresolved is how the Government will fulfil their promise to put passengers’ interests at the heart of franchising. We have raised that in the Committee, but we have not yet heard a full explanation of how it is to be achieved.

The outcome of the Government’s long-awaited fares and ticketing review is also crucial. We were pleased to learn that the Department had ruled out the introduction of “super-peak” fares to reduce demand for the busiest peak-time services, but it remains committed to managing demand to reduce overcrowding. It is not clear how that will be achieved. We also welcomed the Government’s decision not to proceed with RPI+3% fare increases, but recognised that that left them without a clear policy on fares. Smart ticketing is another issue mentioned in our report on which progress has been slow. Can the Minister tell us when he will publish the report of the outcome of the Department’s review, which is already overdue?

The Committee’s vision for rail included the following: a clear link between policy on rail and other aspects of transport policy; a strategic approach to policy making by the Department that does not sacrifice democratic accountability, assisted by a strong industry regulator and an effective industry leadership; clarity about the objectives of subsidising rail and how these can be achieved; more transparency about the costs of rail; passenger interests to be more clearly taken into account in deciding questions of rail policy; more modern, flexible fare and ticketing options and a clear long-term policy on regulated fares; and no diminution in existing safety standards.

The Government have struggled so far to set out their own vision for rail or to link rail policy to other transport priorities. The west coast main line franchising fiasco has knocked the Department off course and threatens to challenge efforts to achieve better value for money across the industry. Strong leadership is required.

Rail is increasingly popular. It is important that the Government’s investment in rail, as part of our transport network, secures value for money for both taxpayer and passenger.

--- Later in debate ---

[Mrs Ellman]

I thank hon. Members for their varied contributions in this constructive debate. Underlying all the contributions was support for the continued expansion of the railway. Privatisation separated both ownership and operation of train and track, and it is ironic that the solution being put forward now to deal with some of the problems that rail services face is to enable them to work more closely together.

I listened carefully to the Minister’s reply to the questions I put, but I have a couple of other points to put to him. In relation to franchises and securing passengers’ interests, we need to know more about what weighting will be given to securing those interests when assessing the award of franchises in the future. I asked the Minister to say what the financial implications would be of the cumulative 26-year delay in awarding franchises, but I did not hear a response. I hope that we will be able to get one, as it has implications for the industry as well as for the Department. I am pleased to hear that the fares and ticketing review will be published shortly. I note that it will be “during the summer”: I hope that will be sooner rather than later.

Those are all important issues and it is essential that they are resolved to enable the railway to continue to expand and grow. We need proper franchises that reflect value for money for passengers and the taxpayer, and we need to ensure that fares are fair and not unaffordable. We must not price people off the railway.

I know that the Government will produce more information about how the franchise system will develop in the future, and we look forward to that. The Committee will continue to consider all these issues, which are all ongoing and extremely important. Strong leadership is required to resolve them, from both the industry and the Department. The aim of the Committee’s work in this area will be to produce a more effective and efficient rail service. Rail is already popular, but it can be more efficient and fares can be brought down—at least, the rate of fare increases can be stopped.

I hope that this debate, and the range of views we have heard, will help Ministers to address those issues, and I hope that we will secure more effective leadership from both the Department and the industry.

Question deferred (Standing Order No. 54).

Oral Answers to Questions

Louise Ellman Excerpts

Thursday 27th June 2013 Commons Chamber

[Mr McLoughlin]

My hon. Friend is right that many constituents will flock to the coast, including the coastline in his constituency and many others around the UK. Our coastline is fantastic, attractive and beautiful, but it is also dangerous and people should not take risks or underestimate it.

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

Amphibious vessels such as the Duckmarine that recently sank in Liverpool appear to have at least three regulators: VOSA and the traffic commissioners; the Maritime and Coastguard Agency; and the Driving Standards Agency. Will the Secretary of State ask the accident investigators to consider whether this split regulation and split responsibility is the best way to guarantee public safety?

[Mr McLoughlin]

Of course we are all very concerned about the incident that happened in Liverpool and I will talk to the inspectorate about it. A report is being prepared by the marine accident investigation branch. I will want to see what it says, and I shall take the point made by the hon. Lady as Chair of the Select Committee.

High Speed Rail (Preparation) Bill

Louise Ellman Excerpts

Wednesday 26th June 2013 Commons Chamber

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

I am pleased to support this legislation today, which is a significant step in securing High Speed 2. It is important to recognise that HS2 is about having a vision for the future. It is about making a much-needed step change in capacity on our railways. It is about meeting growing demand for rail, addressing congestion on our roads and motorways, and connecting major cities not just across this country and the UK, but potentially across Europe as well. It has the potential to rebalance our economy.

However, it is very important that progress on High Speed 2 does not go ahead in isolation from considering the importance of continuing to invest in the existing classic line. Existing improvements such as the northern hub and the electrification programmes must continue and be stepped up. Assurance must be given that there will be proper access to high-speed rail, and that means that more attention needs to be given to the siting of the stations and connections to them. It is important that no local services be reduced as a consequence of building the high-speed rail line, and it is extremely important that the potential of developing the freed existing lines for both freight and passengers be addressed. That means that more work needs to take place, perhaps through local authorities and local enterprise partnerships working together, to make sure that proper plans are worked out so that the existing lines freed when high-speed rail comes to fruition will be able to be used to the maximum for freight and for passengers.

It is also crucial that the potential for economic development and rebalancing the economy is achieved. That means that we must not make any assumptions that simply building a high-speed line will automatically bring those economic benefits. Work has to be done, again by the LEPs, with the local authorities and with Government support, to develop economic strategies, regionally as well as nationally, to support business in taking advantage of those opportunities. I was very interested to read the results of studies instigated by local authorities. The Core Cities study put forward by major cities in our country identified about 400,000 new jobs that would come as a result of high-speed rail, and Centro’s report, looking specifically at the west midlands area, identified about 22,000 jobs that would come. I emphasise that none of those jobs will come automatically; we need to give attention to economic strategies and support for business to make sure that those opportunities come to fruition.

A number of important issues must be addressed. Concern remains that under the Bill as proposed, high-speed rail may not go beyond Birmingham. We have heard assurances from Ministers but we need rather more than that; we need a commitment in the Bill to make sure that HS2 is not simply between London and Birmingham, and that the rail scheme progresses to Leeds, Manchester and beyond. The time scale is a very long one, even on the current proposals of 2026 to Birmingham and 2033 to Leeds, to Manchester and to other areas.

[Mr McLoughlin]

I completely agree with the hon. Lady’s point. I wonder, Mr Speaker whether I might use this intervention to clarify something I said earlier, as I am afraid I gave the wrong figure. I said that the contingency was £12.7 billion but it is actually £14.4 billion, so it is larger than I said. I just wanted to take this opportunity, with your permission and that of the hon. Lady, to put the figure right.

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[Mr Speaker]

The House is grateful.

[Mrs Ellman]

I thank the Secretary of State for clarifying that situation.

The consultation, which has not yet taken place across the whole of the proposed line, must be a very real one. A number of hon. Members have already told us of their local concerns. There are problems in relation to London and, in particular, the development around Euston station, which is an important and difficult issue. Hon. Members have also raised issues in the House relating to access to Stoke-on-Trent. The proposals for Liverpool are not good enough and need improvement. Important environmental issues need addressing, and the question of compensation has been raised in the House this afternoon. All those issues are vital and must be addressed in a reasonable way. It is important for them to be resolved successfully because that will help to deliver a successful HS2—high-speed rail that is about much needed capacity, connectivity and economic progress for the future, throughout this country and beyond.

Oral Answers to Questions

Louise Ellman Excerpts

Thursday 25th April 2013 Commons Chamber

[Norman Baker]

The performance of local authorities and passenger transport executives across the country varies enormously. The education maintenance allowance was replaced by the 16 to 19 bursary fund—£180 million provided by the Department for Education. I am in discussions with my colleagues at that Department about access to education. With reference to access to work, the hon. Lady will be aware not only of the steps taken under the local sustainable transport fund to help access to work, but the initiative on which I have worked with bus operators to ensure that there was free access for some people out of work in January.

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

Will the Minister allow transport authorities to access the better bus funding scheme so that quality contracts and quality partnerships can be pursued to give young people and others a better deal?

[Norman Baker]

Quality contracts were on the statute book, put there by the Government that the hon. Lady supported. It was open to them to take whatever steps they wanted, but they did not take any of the steps that she is now advocating. The two schemes are not mutually exclusive. In response to an Adjournment debate a few days ago which one of her colleagues introduced, I made it plain that if operators behaved inappropriately, it would be possible for better bus area funding to be provided under those circumstances.

Railways

Louise Ellman Excerpts

Thursday 25th April 2013 Commons Chamber

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

I begin by apologising that I will not be able to stay for the whole debate, because I have to lead a transport debate in Westminster Hall that starts at 1.30 pm. I am pleased to have the opportunity to discuss some of the findings of the Transport Committee’s inquiry into the European fourth railway package.

The Commission justifies its proposals by talking about “stagnation or decline” in European railways. Of course, there is no such thing in this country. Our railways are enjoying an unprecedented period of growth. It is highly debatable whether that growth is due to privatisation or the growth in our GDP over the same period. It is worth recognising that there has also been major expansion in Germany and France, where major national rail operators run the rail services. It is therefore not justified to say automatically that our success in increasing passenger numbers is due to privatisation.

The Select Committee raises a number of concerns about the package, one of which relates to the proposal to separate infrastructure management and service operation. That thread runs through the whole package. It is ironic that against the background of our success, the Government are trying to bring the operators and the infrastructure holders closer together. That is being done in a number of ways, including through the development of partnerships between the national rail network and the transport operators and through what is prescribed in the new rail franchises. It is important that the European package does not prevent the working together that this country is trying to develop.

It is also important that that division does not apply to light rail services, where management of the services and ownership of the network are combined, as in the case of the docklands light railway. Those services are extremely successful and they must not be jeopardised.

Before the package was published, it was thought that it would require the complete separation of infrastructure ownership and service operation, but that is not the case. The package says that there can still be a holding company, as there is in some other European countries, that owns both the network and the train operation. However, it says that there must be strict Chinese walls to separate the two.

A major concern of the Committee is that the regulations on how much of the rail service of any one country an organisation can hold will restrict the opportunities for UK companies to bid for overseas business in the way that the European companies that run large sectors of our rail industry have done here.

In the short amount of time left, I would like to mention the omissions that the Committee is concerned about. There is a need to encourage cross-border services for both freight and passengers. Track access charges are an extremely important issue. We were told repeatedly that high access charges are impeding the development of cross-border services. There seems to be no recognition of that in the Commission’s package. Border control is another area that requires attention, but to which no attention was paid in the Commission’s rail package.

Those are the Committee’s key concerns with regard to the expansion of our rail services. We made other points too, but I have only had a limited time in which to speak. We are also concerned about the omissions. I listened to the Minister’s comments at the beginning of the debate. I am confident that he will take our points forward and I hope he will ensure that they are considered fully in the discussions in Europe before the package is finalised.

Plug-in Vehicles

Louise Ellman Excerpts

Thursday 25th April 2013 Westminster Hall

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

I am pleased to serve under your chairmanship, Mr Robertson, and to introduce these two debates on reports by the Select Committee on Transport. The first is “Plug–in vehicles, plugged in policy?”, which we published last September. It focuses on Government policy to promote the take-up of electric vehicles, and I will concentrate on that issue in my remarks.

It is important to begin by putting the issue in its wider context. The UK has a target to reduce its carbon dioxide emissions to 34% below the 1990 level by 2020 and 80% below the 1990 level by 2050. Carbon emissions from cars account for about 15% of total emissions, so reducing emissions from cars is essential to meeting those targets. The Government are correct to be considering ways to decarbonise road transport. Carbon emissions from road transport have fallen in recent years. The use of biofuels—

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On resuming—

[Mrs Ellman]

Carbon emissions from road transport have fallen in recent years. The use of biofuels and the development of hybrid vehicles, which use electricity generated from braking as well as conventional fuel, have helped to deliver that decrease. However, the economic downturn has been a more significant factor in keeping road traffic down. Carbon emissions may well rise again when the economy begins to recover. There is much more work to be done to make road transport more sustainable. As 65% of emissions come from exhaust pipes, reducing carbon emissions from fuel is essential, and there are a number of ways to do that: lighter cars use less fuel; engine performance can be improved to use conventional fuel more sparingly; biofuels are becoming increasingly common; and new technologies, such as hydrogen fuel cells, are on the horizon. In addition to hybrid vehicles, various types of electric vehicle can be plugged into the electricity network.

To achieve the required reductions in carbon emissions by 2050, a significant shift from conventional fuel to very low or zero-carbon fuel is necessary. The Government have already said that they hope to achieve that and want UK industry to lead the way in manufacturing the necessary new technologies. The Department for Transport has said it would like its policy on reducing carbon emissions from cars to be technology-neutral

“to create the incentives for industry to develop the technologies that reduce emissions, work for consumers and make economic sense”.

Its main focus has been on starting a market for plug-in vehicles. The Government predict that by 2015 we should expect to see

“tens of thousands of plug-in vehicles on the roads in the UK”

and perhaps hundreds of thousands by 2020, if not sooner. They have chosen to back them, because plug-in vehicles are now a commercial technology and other technologies, such as hydrogen fuel cells, are still at the development stage.

The most eye-catching aspect of Government policy to promote plug-in vehicles is the plug-in car grant, which offers up to 25% off a vehicle’s price up to a maximum of £5,000, with a similar grant available for van buyers. Applications for the grant are increasing, but at September 2012 only 2,629 cars eligible for the grant had been registered—a fraction of 1% of total car registrations. The £30 million budget for plug-in vehicles for 2011-12 was significantly underspent. It would take a leap of faith to imagine that the number of plug-in vehicles will reach “tens of thousands” in just two years.

The Transport Committee heard that a lack of consumer awareness about the availability of the plug-in car grant, as well as concerns about the performance and range of the vehicles, has held back demand. The Department told us that it was gathering information about how people use plug-in vehicles and how they perceive them, which it said would help to make the case for plug-in vehicles “even more compelling”. It also pointed to specific initiatives to promote the vehicles, such as helping to draft a guide to electric vehicles. Those initiatives are not enough to meet our recommendation for the Government to promote public understanding of the infrastructure and support available. Is the Minister satisfied that the Government are doing enough to publicise plug-in vehicles?

The Committee’s report draws attention to some unexpected changes in the tax treatment of plug-in vehicles in the 2012 Budget, including the unanticipated removal of some financial incentives. Motor manufacturers were universally critical of the changes, because they make plug-in vehicles less attractive to purchase for commercial car fleets and because they reduce confidence in what was described as a “fragile, fledgling market”. The Department told us simply that

“tax issues are a matter for the Treasury”.

It would seem that either the Department and the Treasury did not discuss the issue before the Budget or the Department was ignored. There was a better outcome from this year’s Budget, with an announcement of tax changes to take effect in 2015. I hope that that signals a major change and that tax policy will support transport policy on plug-in vehicles in the future.

Most plug-in vehicles sold so far have been bought for fleets. Fleet purchasers are less likely than ordinary motorists to be put off by the up-front cost of a plug-in car, which can still be in excess of £20,000, even when the plug-in car grant is taken into account. The Government have certainly taken some steps to promote such cars to fleet purchasers, but a glance at the website of the Office for Low Emission Vehicles shows that most of its emphasis has been on promoting the cars to the domestic purchaser. Only relatively affluent motorists are likely to be able to afford a plug-in car. The Committee spoke to researchers from Coventry university, who warned of the risk that the grants could subsidise second cars for affluent households, noting that people who had driven plug-in cars saw them as a “support vehicle” rather than a main car.

The recent report from the Institute for Public Policy Research suggests that Government fleet purchases, on which £400 million a year is spent, are likely to be a more productive way forward. Does the Minister acknowledge that there is more potential demand for plug-in vehicles from commercial fleets than from ordinary motorists? Does he agree that the Government could do more to promote sales to fleet purchasers? For example, what has been done so far to persuade local authorities or even Government Departments to switch to plug-in vehicles?

The Government have said that they hope that the grant will stimulate domestic demand for plug-in vehicles. Indeed, the IPPR sees car manufacturing as a potential major benefit to the economy. If manufacturers can be tempted into the market, the price of the vehicles should fall, further encouraging demand. There are concerns that manufacturers are not convinced that the market for plug-in vehicles will rapidly expand. I note that the recent report from the Royal Automobile Club Foundation for Motoring Ltd also mentions that point. Nissan had suggested it would build 50,000 of its plug-in car—the Leaf—each year at Sunderland, but it has been reported recently that production volumes will be much lower. Will the Minister comment on manufacturers’ confidence in the plug-in vehicles market?

The Government are closely involved with the provision of infrastructure for charging plug-in vehicles. The Committee looked in some detail at the plugged-in places scheme, which has come to an end. The scheme encouraged the installation of charge points in eight places in the UK. Some plugged-in places were very successful; at the time of our report, 640 charge points had been installed in London and 399 in north-east England. In Manchester however, also a plugged-in place, no charge points had been installed. Can the Minister explain how the plugged-in places scheme has been evaluated and what lessons have been learnt from the less successful areas?

The Committee identified a number of issues with charge points: first, there is no national network; and secondly, the vast majority of charge points installed charge over a period of several hours. Charge points that can recharge a car in minutes are much more expensive and, as a result, less common. It would take considerable planning and a number of days to drive a plug-in vehicle from London to Newcastle, and that inevitably has an impact on the purchaser. Each plugged-in place developed its own payment scheme for charging cars, further complicating long-distance travel. There are also different types of infrastructure around the country. The quick-charge points use a Japanese protocol, which is incompatible with German cars. The Government told us they would look to the market to resolve the problems.

We also found that the national charge point register does not include details of all the charge points installed by the plugged-in places scheme. We were told that the Government remained

“committed to the idea of a single repository of comprehensive national chargepoint data”

that was available to all, but it is not clear what they are doing to achieve that aim, which is fundamental to consumer confidence. Will the Minister agree to ensure that the national charge point register includes all charge points whose installation has involved public expenditure? Will he do more to promote the register, to help to convince people that a national recharging network exists?

As a successor to plugged-in places, the Government recently announced that local authorities in England will receive £11 million over two years to fund on-street charging for residents and to install charge points on major roads. The Local Government Association has commented that the money will be spread thinly across 152 highways authorities. It will also mostly fund the cheaper slow-charge points, especially as the Government will cover only up to 75% of the cost. Can the Minister tell us how popular the new fund is proving to be?

If the Government are serious about promoting plug-in vehicles—and I think they are—they could do more to create a genuinely national network of quick-charge points on motorways and main roads, perhaps by paying for the infrastructure themselves. Will the Minister consider that? I understand that an application is being made for EU funding for 74 quick-charge points on strategic roads. Will the Minister support that initiative?

There are a number of other issues to consider. First, can the electricity network cope if there is a significant increase in demand for plug-in vehicles? Is it worthwhile promoting plug-in vehicles if the electricity they use is mostly generated by fossil fuels? Will an increase in the number of quiet plug-in vehicles make our roads less safe because pedestrians and cyclists cannot hear them approach? Can the UK become a world leader in the production of plug-in vehicles and their components?

In conclusion, the Committee broadly supports the Government’s aim of kick-starting a market for plug-in vehicles, to help to achieve carbon reduction targets and to support a fledgling domestic industry. In some ways, however, the actions have not been strong enough, although I am sure that the intent is strong. For example, we have ample numbers of slow-charge points in some parts of the country but none in others, and there are far too few quick-charge points to provide for plug-in vehicles to travel long distances. The Government could take further action in that area. We have also questioned whether it is appropriate to focus the plug-in car grant on the domestic market, when persuading the public sector to convert its vehicles from conventional fuel to electric would be more cost-effective.

I commend the Government on their actions in trying to kick-start a market, but policy on supporting ultra-low emission vehicles in general, and the plugged-in car scheme in particular, should be strengthened. I look forward to hearing the Government’s proposals.

--- Later in debate ---

[Mrs Ellman]

I am encouraged by the Minister’s response, and I look forward to receiving reports on further progress.