Rail Reform

Maria Eagle Excerpts

Thursday 8th March 2012 Commons Chamber

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

I thank the Secretary of State for advance sight of her statement and repeat our thanks to Sir Roy McNulty and his team for their work. We did not agree with all his conclusions and, if we had been in government, we would not have accepted all his recommendations. It was a valuable piece of work, however, that is helping to drive a number of reforms in the industry that we welcome.

Passengers have every reason to be concerned about the direction that the Secretary of State has just set for the rail industry, with year after year of inflation-busting fare rises, ticket offices closed, fewer staff on trains and at stations and cuts in investment in the rail network. In each case, the interests of private train companies are being put before those of passengers and the principle that we established in government of a clear separation of infrastructure and maintenance from private profit is being abandoned, for the first time giving private train companies the whip hand over Network Rail. That is a dangerous experiment that takes the industry on the road to breaking up and selling off Britain’s railway infrastructure, all because this is a Government who are simply unwilling or unable to stand up to vested interests on behalf of passengers. [Interruption.] The question that the Government have yet to answer is this: if we are all in this together, why is the burden yet again to fall on the fare payer and not on those who are already making huge profits—[Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. The Secretary of State was listened to politely without Front-Bench heckling and I expect the shadow Secretary of State to be heard without heckling from those on the Front Bench or anywhere else.

--- Later in debate ---

[Maria Eagle]

Thank you, Madam Deputy Speaker.

The question that the Government have yet to answer is this: if we are all in this together, why is the burden yet again to fall on the fare payer and not on those who are already making huge profits that are lost to the industry and that help to drive up the cost to the taxpayer of running our railway?

We cannot support these reforms. In the coming weeks we will set out our own alternative approach to reforming the rail industry, but for today I would be grateful if the Secretary of State answered a number of specific questions of concern to passengers and commuters about her proposals.

On fares, the National Audit Office has warned that the Government’s fare rises, which are adding to the cost of living crises facing households, are just as likely to increase the profits of train operators as reduce costs for the taxpayer. Will the Secretary of State confirm that the entire cost of holding fare rises at just 1% above inflation for the rest of this Parliament and strictly enforcing that cap would be less than the £543 million her Department handed back to the Treasury as a result of an underspend last year? Will she therefore abandon plans to increase fares by 3% above inflation in 2013 and 2014?

The Secretary of State said today that the days of above-inflation fare rises are coming to an end, so will she explain why the tender documents for the new franchises assure bidders that they can increase fares by up to 6% above inflation every single year of those 15-year franchises? Will she confirm that, under the plans she has set out today, train companies will be given even more freedoms on fares, including the right to introduce a super-peak ticket, which will hit hard-pressed commuters in particular?

I welcome the commitment to extend smart integrated ticketing that can be used on trains and buses, enabling the rest of the country to catch up with London. The fact that that will enable part-time workers to benefit from new flexible season tickets is particularly welcome, but will the Secretary of State explain how that will work outside London if she remains unwilling to take steps to regulate the bus network outside the capital as we proposed?

On the level of services, will the Secretary of State explain why the inter-city west coast franchise tender document allows daily service reductions of up to 10%? Will that not lead to even greater overcrowding than passengers already face? Will she explain why the final tender documents for the new franchises have also watered down the performance obligations since the earlier draft? The requirement to improve performance over the life of the franchise has been replaced by a requirement to do so unless

“good evidence can be provided as to why this is not achievable.”

Surely passengers expect the Government to insist on improvements, not simply to police the excuses that the train operating companies come up with.

Does the Secretary of State understand the concerns about the train companies’ new freedoms to close ticket offices and cut the number of staff on trains and platforms? Will she explain why the new franchises ask bidders only to consider maintaining the same level of CCTV on trains?

The structural reforms to the industry are also deeply worrying. Does the Secretary of State understand the concerns that the restructuring she proposes has a massive accountability gap at its heart? Genuine backing for devolution, which the Government have ducked today, would see transport authorities deciding the best way to deliver rail services in each region. Should that not permit alternatives to the existing franchise model to be explored, including not-for-profit and mutual options? Does she agree that for devolution to work those authorities need a fair deal on costs, subsidies and risks? This cannot be—as is suspected—about devolving responsibility for cuts.

Will the Secretary of State explain how the decision to allow deep alliances between train companies and Network Rail, with private train companies having the whip hand, fits with the need for democratic accountability? I know the Conservative party is determined to complete the job it started with its botched rail privatisation, but does she not accept that the decision we took to create Network Rail as a not-for-dividend body has served the industry well? Why is she willing to turn back the clock and take us back to the bad old days by creating what are effectively a series of mini-Railtracks? Where is the accountability to passengers, taxpayers and Parliament? How can there possibly be a level playing field in future franchise competitions if the incumbent is part of a single management team? Does she not see the clear conflicts of interest that are evident throughout her proposals?

How will Network Rail continue to support the interests of freight operators and their need to access the network in a system where private train operators manage the network in each region? Will the Secretary of State explain why long-term concessions will not simply add to the costly fragmentation of the industry? Why does she believe that breaking up and selling track piece by piece will improve performance and safety?

This long-awaited rail strategy is a wasted opportunity to address the structural issues left from the botched rail privatisation. Instead of tackling the fragmented structure of the industry that was the legacy of privatisation, the Government are instead creating an even more fragmented and costly structure with more interfaces, more need for lawyers and consultants, less accountability, and, at the same time, more freedoms for train companies to hike fares and cut services, booking offices and front-line staff. Even at this late stage, I hope that the Secretary of State will think again and instead seek to build consensus on the future of the rail industry, based on devolution and genuine local control with communities and passengers in the driving seat, stand up to private companies, not cave in to vested interests, and put passengers before profits. It is not too late for her to do that. I hope that she will think about it.

[Justine Greening]

Obviously, I listened with interest to what the hon. Lady said and I hope that she will at least accept that the current situation, with a rail industry that Roy McNulty says costs £3.5 billion more than it needs to owing to inefficiency, is something that we should tackle. I note that she says she is going to come forward with an alternative and it is important that she does that because if she is turning her face against this approach, she is saying that it is okay for fare payers and taxpayers to pay that £3.5 billion in perpetuity. I think that is broadly what she was saying, but I shall await with interest her alternative proposal, which she needs now to provide.

The hon. Lady talks about the burden falling on the fare payer, but that is exactly what happens now. That is one reason why there has been so much pressure for fares to go up year on year. Let me remind her that her party also recognised that problem, which is why it commissioned Sir Roy McNulty to do that work and why it struggled with the issue too, itself overseeing years of above-inflation rail fare rises. What all of us in the House should be looking towards, with the strategy we have produced, is how to tackle these issues. We want fares to remain affordable. I have stressed on a number of occasions and at several points in the documents we have released today that it is absolutely key that we make sure that fares remain affordable. The underlying objective we are trying to achieve is the end of inflation-busting fares. We also want to cut down on the level of public subsidy, as we would prefer that money to go towards reducing the deficit or into investment in other areas.

I am pleased that the hon. Lady welcomes the flexible season tickets. If we are able to push forward on smart ticketing across the country, people will be able to use that sort of ticketing not only on the railways but potentially on buses too. The Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), who has responsibility for buses, will be producing a strategy that includes all those opportunities in the coming weeks.

The hon. Lady mentioned ticket offices. I understand that many passengers strongly value the face-to-face channel that a ticket office provides, as can be seen in the documents. However, I remind her that when her party was in office there were large-scale reductions in ticket office opening hours. In 2009, Labour Ministers approved cuts to opening hours at 70% of South West Trains ticket offices. The Command Paper has a section on how we want stations to improve, including by having crèches at stations where that is a sensible idea. Face-to-face channels are important for people buying tickets, which is why one of the ideas in the paper is to investigate whether people could buy tickets at their local post office, library or shop, as people can with Oyster in London. All those things should mean that people have more, rather than fewer, opportunities to buy tickets face to face.

In the rest of the fares and ticketing consultation—and I stress that it is a consultation—there are some really good ideas for moving ticketing into the 21st century, including on how we can make sure that the approach to ticketing reflects working practices today and the fact that people work flexibly and part-time, rather than expecting them to fit into a ticketing approach that would be better placed in the 1980s.

I am pleased that the hon. Lady asked about devolution and decentralisation because that is possibly one of the most exciting parts of all this in the long term for local communities. It opens up an important debate about how franchises might be more spec’d up in the long term and controlled by local communities. I assure her that this is about giving local communities opportunities, not about passing on some underlying problem. Indeed, the Government are absolutely clear that we need to tackle the underlying problem of inefficiency in our railways. That is what the document is all about.

The hon. Lady raised concerns about alliancing. I think that getting the industry to work together is a common-sense approach to tackling some of the inefficiencies that exist, which are directly funded in the end by fare payers and taxpayers. Today, when asked, she was not able to rule out her party wanting to renationalise the railways, but I think that we need to make the pieces of the jigsaw fit together better. Simply throwing them up in the air again would only waste time and make it harder for the industry to take the responsibility that we want it to, and I do not think that that would be the right way forward.

Finally, I understand the hon. Lady’s concerns about freight and we are absolutely committed to making sure it is a core part of the network going forward. One of the underlying reasons for high-speed rail is to make sure we have capacity on the core network for freight. We need to make sure there are safeguards in place regarding any of these changes so that the freight industry can continue to do what we want it to, which is to re-mode on to trains.