Rising Cost of Transport

Debate between Louise Ellman and Andrew Turner

Wednesday 9th January 2013 Commons Chamber

[Mrs Ellman]

At the moment, the overall distribution is about 60% for the passenger and 40% for the taxpayer. In the breakdown of how the funds are allocated on different types of services, however, there are very stark differences. It is in respect of the allocation of the cost and the resultant proportions of contributions made by taxpayers and passengers where further major questions need to be asked. That is why the Select Committee report highlighted the need for more transparency about the cost of different types of services and where the subsidy goes.

The Committee’s main conclusion was that the Government should rule out demand management that would lead to even higher fares at peak times. It made the important point that many people have to travel at peak times in order to get to work.

[Mr Andrew Turner (Isle of Wight) (Con)]

We must all acknowledge that at peak times the demand placed on the rail network can far outstrip supply. How does the hon. Lady think demand can be prevented from exceeding supply? Does she not agree that more should be done to encourage investment in local areas, outside the major cities, in order to remove the need for most of us to commute?

[Mrs Ellman]

People often travel at peak times because those are the times when they have to get to work. They have no choice. However, there are other ways of addressing the question of demand, and I shall say something about them later.

The report also talks of the importance of achieving efficiencies, although we think that the aim of making efficiency savings of £3.5 billion by 2018, as McNulty recommends, is a challenging one. The bringing together of different parts of the rail industry in the Rail Development Group, and through other means, is welcome, but it is important for the industry then to work in the interests of passengers and the taxpayer, not just in its own interests. It is also important for it not to cut corners and put safety at risk in order to achieve efficiencies. We have high safety standards which should not be jeopardised, and strong regulation is particularly important for that reason. The regulator needs to be able to act firmly and decisively.

Members have mentioned other means of achieving efficiencies and reducing fares, or at least reducing the rate of increase in fares. We need to think about smart ticketing and innovation, and about introducing more flexibility in the way in which fares policy is drawn up and implemented, which has been sadly lacking. There should also be more transparency in the use of public funds. It is extremely important for the rail service to receive a public subsidy, because it is a public service, but it is equally important for the £4 billion public subsidy going into the system this year to be dealt with in a way that people understand, so that they can assess whether it is being used effectively. Not all the information that we have at present enables them to do that.

Transport Committee Report (High Speed Rail)

Debate between Louise Ellman and Andrew Turner

Tuesday 8th November 2011 Commons Chamber

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

I beg to move,

That this House notes the publication of the Tenth Report from the Transport Committee on High Speed Rail, HC 1185.

I am grateful for the opportunity to present on the Floor of the House the Transport Select Committee’s report into high-speed rail. Our inquiry attracted widespread interest and considered strongly contested and diverse views on the Government’s proposal to build a dedicated, high-speed, Y-shape network, with trains running at up to 250 mph.

Phase 1 is proposed to run from London to Birmingham, opening in 2026. Phase 2 would add two legs to the line, with one going to Manchester and the other to Leeds, operating from 2032-33. The total projected costs are £32 billion, with £16.8 billion for phase 1. The former Secretary of State for Transport, the right hon. Member for Runnymede and Weybridge (Mr Hammond), told the Committee that, spread over 17 years, this was affordable and amounted to an average of £2 billion a year—very similar to the current costs of building Crossrail. Should this proceed, Parliament would consider a hybrid Bill from October 2013 to May 2015.

Our inquiry included consideration of more than 200 pieces of written evidence. We held five oral evidence sessions, with more than 40 witnesses. We travelled on high-speed rail in Frankfurt, Paris and Lille, and spoke to business and civic representatives there, so that we could make some assessment of the impact of high-speed rail on continental Europe. We commissioned a report on High Speed 2 from Oxera Consulting and asked for its analysis of the case put for High Speed 2. We appointed specialist advisers, Bob Linnard and Richard Goldson, to work with our excellent Committee staff. We took those steps because we recognised the importance of this inquiry and we wanted to listen to the greatest possible number of people with different views and different experience, and we wanted the highest level of advice and support in assisting us to analyse the validity of the project before us.

It is regrettable that people expressing sincere and legitimate concerns about what they fear would be the local impact of high-speed rail on their environment have been castigated as “nymbys”. People are entitled to express their views, and while a decision on a major investment of this nature should be taken in the national interest, people are fully entitled to express their concerns about what they believe might be the impact on them, their community and their local environment. Abuse does not help debate.

What are our conclusions? We conclude that there is a good case for proceeding with a high-speed rail network linking London and the major cities of the midlands, the north and Scotland, principally because it will provide a substantial and necessary step change in capacity and a dramatic shift in connectivity not offered by any of the alternatives proposed. This investment will assist passengers and freight. We reject a policy of ever-rising train fares in an attempt to suppress peak-time passenger demand. Current overcrowding is a consequence of a current failure to provide necessary capacity at a time when people want to travel and often need to travel.

The number of long-distance rail journeys more than doubled in the 15 years to 2009. Some of the highest growth has been on the west coast main line, where the number of journeys has increased by about 10% per annum for the past three years. The west coast main line passenger demand levels forecast by HS2 for 2021 have already been overtaken and are projected to increase.

[Mr Andrew Turner (Isle of Wight) (Con)]

Will the hon. Lady help me by explaining how much money from the Government and how much from the customers or the users of the railway is involved? May I add that, as a representative of the Isle of Wight, there is no benefit whatever for me or my constituents if a lot of money is spent on a railway in the north of England?

[Mrs Ellman]

I thank the hon. Gentleman for his comments. Currently, the proportion paid by the traveller or fare payer is increasing and is now about half of the cost. That is very different from what applied in previous years.

We were told clearly that the west coast main line will be full by the end of this decade, which means that additional required routes and services for passengers and freight could not be made available. Our specialist advisers were clear that HS2 is needed for capacity reasons if the pattern of growth continues or if peak demand cannot be spread.

The step change that HS2 would bring does not apply only to people who would use the new line. It would enable expansion on the existing classic line for more local and regional services and for freight. Places such as Milton Keynes would benefit; freight on rail would expand—and demand for freight on rail is anticipated to double. When an assessment of the impact of High Speed 2 is made, it is important to look at what services could be made available on the existing classic line, as well as what would run on the new line.

[Mrs Ellman]

I thank my hon. Friend for her comments. It is evident that the debate on High Speed 2 is often cast solely in terms of access to London, but this is also about access between major cities. For example, if and when the line is completed as planned, Manchester and Leeds would be brought within 80 minutes of London, travelling from Manchester to Birmingham would take 49 minutes, while Birmingham to Leeds would take one hour and five minutes. It is as much about the connectivity between the cities of the United Kingdom as it is between cities and their access solely to London. Indeed, a high-speed line offers a dramatic shift in connectivity between the UK’s major cities as well as improved access from the regions to Heathrow and, through linking with High Speed 1, to continental Europe.

A high-speed network could be a catalyst for economic growth, supporting jobs and investment. It could help to rebalance the economy and address the north-south divide.

[Mr Andrew Turner]

At present half the money comes from the Government, and a new railway costing about £18 billion is proposed. It is not clear whether people who can currently afford to travel would still enjoy the same benefits. Would the money that is being spent continue to be spent, or would the amount be reduced?

[Mrs Ellman]

Those are matters for Government policy. When we raised that specific issue with Ministers in the Select Committee, we were told that the current assessments were based on existing Government policy. That could, of course, change; it would be a matter for the Government of the day.

Many local authorities and business representatives, especially in the west midlands and the north, were extremely enthusiastic about the potential economic benefits of High Speed 2, and many referred to specially commissioned studies that showed what could be achieved. We do, however, have a number of concerns, which must be addressed during progress on High Speed 2 to ensure that the potential of a new high-speed rail network is realised and informs decision making. The Government must commit themselves to phase 2 before phase 1 is agreed.