Maria Eagle
Main Page: Maria Eagle (Labour - Liverpool Garston)Department Debates - View all Maria Eagle's debates with the Department for Transport
(12 years, 2 months ago)
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Maria Eagle (Garston and Halewood) (Lab)
I beg to move,
That this House believes that the rising cost of rail travel is adding to the financial pressures facing many households; and calls on the Government to restore the one per cent above inflation cap on annual fare rises for 2013 and 2014, and to ban train operators from increasing fares beyond that strict limit.
I begin by congratulating the right hon. Member for Derbyshire Dales (Mr McLoughlin) on his appointment as Secretary of State. He returns to a Department he left some 20 years ago—time flies—after serving for three years as the Minister with responsibility for aviation and shipping. Only three years thereafter—I hope not as a result of his experience—he took a 17-year vow of silence in the Government and Opposition Whips Offices, from which he emerges today, probably blinking into the light. I think I speak for the whole House when I say that we are all very keen to hear what he has to say. He is the third Secretary of State for Transport I have faced since taking up my role in opposition. I hope for his sake he lasts a little longer than his predecessors and I wish him well in the role.
I also welcome his new all-male team—of course, that is a matter for the Prime Minister, not the Ministers he appointed—including the Minister of State, Department for Transport, the right hon. Member for Chelmsford (Mr Burns), and the Under-Secretary of State for Transport, the hon. Member for Wimbledon (Stephen Hammond). Another Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), of course provides the continuity in the Department—something that he probably never thought he would do.
We are debating an Opposition motion, but there need be no disagreement in the House today. I hope that all right hon. and hon. Members, including Ministers, will feel able to support the motion in the Lobby later this afternoon. It is a straightforward motion with a simple proposition—that the rising cost of rail travel is now adding to the financial pressures facing many households. That is a fact, and I would hope that we will see agreement at least on that. It is something that we are all hearing from our constituents. I also hope that we can agree on a second basic proposition—that the level by which rail fares increase should not simply be left to the private train companies to determine. It is why we have the system of regulated and unregulated fares, with those tickets on which most people rely, including day returns and season tickets, having their annual increase capped.
There has always been cross-party agreement that there is a role for Government in the setting of fare levels and it is right that we retain the ability to protect our constituents from a profit-driven free-for-all on fare rises. The reality, however, is that the so-called cap on annual fare rises, even for regulated fares, is not a cap at all. So when the Chancellor stands up, as he does, and says that fares will not rise by more than 1% above inflation—or whatever percentage it might be—he cannot actually deliver that commitment at ticket offices across the country, because the cap is an average and train companies have the flexibility, as they like to call it, to increase fares by up to 5% above the so-called cap.
In January, just two months after the Chancellor had promised a 1% above-inflation cap on fare rises, what did commuters find when they went to buy their tickets? They found fare rises not of 1% above inflation but of up to 11% above inflation, because the train companies had exercised their flexibility to add up to another 5% on to some fares. That is what our constituents across the country face again in the coming new year—fare rises of up to 11%. We are kidding ourselves, therefore, if we think that what we are debating is whether the cap should be RPI plus 1 or RPI plus 3, because the train companies can game it to their advantage. That is why our motion proposes that if we are to have a cap on regulated fare rises—we believe that there should be one, and I think the Government do too—it should be a real cap.
Mark Lancaster (Milton Keynes North) (Con)
Given the hon. Lady’s concern about the impact of fare rises on families, will she join me in congratulating FirstGroup on its successful tender for the west coast rail franchise, given that it is committed to reducing by 15% the cost of a standard anytime return journey? Is this not a demonstration of an effective tender process by this Government?
Maria Eagle
Many questions have arisen from the announcement in the recess about the west coast main line. The hon. Gentleman is right to highlight that the winning bidder—we must remember that legal action is ongoing, so we are restricted in what we can say—has made that commitment, but issues have been raised over the deliverability and reality of the assumptions behind the winning bid. Those issues have been raised not only by some of the losing bidders but by other experts in the industry.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Given what my hon. Friend has said, does she understand my concern and that of many of my constituents about what might happen to the east coast main line franchise when it comes up for reconsideration? Does she agree that there is a strong case at least for considering keeping the east coast main line in the public sector, so that there is not this pressure on requiring payback in profits and payback for the Government, which was clearly one of the issues in the west coast franchise?
Maria Eagle
I agree that there is a strong case for having a public sector comparator, at least when looking at franchising. That is how the current system operates.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Will my hon. Friend take it from me, as a Yorkshire Member, that these are extremely important issues? I am pleased that we have a Yorkshire MP as the new Transport Secretary—that is some consolation—but the east coast and west coast lines are vital to economic regeneration in Yorkshire and the north west. If we do not get it right, we will starve UK businesses in the regions.
Maria Eagle
My hon. Friend makes a strong point, even if his definition of Yorkshire is larger than everybody else’s. As somebody who was born in Bridlington, however, I understand that Yorkshire can be larger than one might think from looking at a map.
Mrs Anne Main (St Albans) (Con)
Does the hon. Lady not share my concern that under the previous Government, First Capital Connect, which runs the Bedford to St Pancras line, was obliged, because of its supported status, to claw back from the public? Imposing a cap now would put it in breach of its franchise. There were such obligations, entered into by the previous Government, on many of the franchises.
Maria Eagle
The hon. Lady makes a strong point. I agree that varying the fare cap on the basis of specific local investment promises in the rail network, which is what lies behind that issue, is not how we should set rail fares. Let us be clear, however: the Government are proposing a 3% above-inflation fare rise for the whole country, regardless of whether any additional investment is planned locally. Today’s motion, if supported across the House, would impose a clear national cap of 1% above inflation, so I hope that she will consider joining us in the Lobby to support it.
Caroline Lucas (Brighton, Pavilion) (Green)
I very much support Labour’s motion, although it is a bit timid. Given that privatisation has left us with a costly, fragmented and dysfunctional railway, and given that increasing evidence shows that reuniting railways under public ownership could save us up to £1 billion a year, would the hon. Lady not agree to go further and bring all the railways back into public ownership?
Maria Eagle
At this stage, that would go well beyond the motion before the House, but I hear what the hon. Lady says. Given that she is now no longer the leader of the Green party, however, I wonder whether it is Green party policy—no doubt we will find out in due course.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The motion calls for an increase of RPI plus 1 for fares. I am sure that the hon. Lady knows that the Scottish National party is the only governing party in these islands that has not raised regulated rail fares. Would she be so kind as to congratulate the SNP Government, who are practising what the Labour party preaches?
Maria Eagle
I am disappointed by that intervention.
One always has to balance rises with the issue of affordability on the basis of the public finances, but there ought to be agreement around the House that inflation plus 1 is a realistic way forward in this Parliament.
Maria Eagle
No, I have taken several interventions and I want to make progress; otherwise I will take up the entire debate with my opening speech, which is not what Members want.
If train companies were banned from increasing fares any more than the strict limit set by the Government, we could then have a political debate about what is the affordable level for that cap, rightly taking into account the state of the public finances, but that decision would at least be more transparent and enforced. My noble Friend Lord Adonis, when he was Transport Secretary, took such a step and banned train companies from increasing regulated fares beyond the cap set by the Government. He has been very clear about this in oral and written evidence to the Transport Committee. [Interruption.] The right hon. Gentleman for Ch, Ch—
The Minister of State, Department for Transport (Mr Simon Burns)
Chelmsford.
Maria Eagle
I knew it began with a “Ch”—that might be a way to remember it in the future. The right hon. Gentleman has not taken too long to get back into the habit of heckling from the Front Bench—perhaps he never got out of it in his role at the Department of Health.
My noble Friend Lord Adonis has made it clear in oral and written evidence to the Transport Committee, and on many other occasions, that he fully intended the ban on train companies flexing the fare cap to continue into subsequent years. That would be perfectly possible. I have said on many occasions that the previous Government should have taken action earlier, but the fact is that when times got tough they acted, but when times got tougher still this Government chose to give back to the train companies the right to fiddle the fare cap.
Maria Eagle
No.
What is the consequence? It is that the Government and the House do not have the ability to enforce the cap on fare rises they think they have approved. I therefore hope that we can all agree today that the cap should be precisely that—a cap, a maximum allowable increase.
Our motion also calls on the Government again to reverse their decision to increase the cap from RPI plus 1 to RPI plus 3 for 2013-14. This should not be a contentious proposal, and I hope that Members on both sides of the House will feel able to support it. I know that it is slightly devalued today, but Government Members might like to look back at the commitment they made in the coalition agreement:
“We are committed to fair pricing for rail travel”.
It simply is not credible to square that pledge with the decision taken to increase the annual cap on fares from RPI plus 1 to RPI plus 3.
Let us be clear who is benefiting from these excessive fare rises: the private train companies. I urge the new Secretary of State to ask his civil servants for a copy of a very good report—on his Department’s spending settlement and its progress in implementing it—recently published by the National Audit Office. It warns that the Department for Transport has failed to demonstrate that higher fares translate into payments back to taxpayers:
“There is a risk that the benefit of the resulting increase in passenger revenues will not be passed on to taxpayers fully, but will also result in increased train operating company profits.”
So there we have it. We know who benefits from fare rises: the private train companies.
Maria Eagle
I am seeking to make some progress. If there is time, I will give way a little later.
I know that some hon. Members may think, “All well and good: these private companies should be able to make these very large profits for running our rail services.” However, I wonder whether Government Members have been keeping track of who has actually run our rail services since privatisation. For example, the Chiltern and CrossCountry franchises are run by subsidiaries of Deutsche Bahn, the German state railway. Southeastern, London Midland, TransPennine and Southern are all run in partnership with subsidiaries of SNCF, the French state railway, while Greater Anglia and Northern rail services are run by a subsidiary of Ned Rail, the Dutch state railway. Let us be clear: the ability of so-called private train companies to hike fares beyond the cap does not just mean additional profit, as the National Audit Office has warned; it means additional dividends from those profits going back to the state railways of France, Germany and the Netherlands. The consequence is that fares on their domestic rail networks are, on average, a third lower than those on ours.
Maria Eagle
I will give way again in due course, but not at present.
I know that Government Members—those who are not serial rebels, and the Secretary of State knows who they are—may still want to ensure that they are in line with their Chancellor’s position on this issue. Let me therefore remind the House what the Chancellor himself said on the level of fare rises in last year’s autumn statement, when he performed one of his many post-Budget U-turns and bowed to pressure, not just from this side of the House, but from his own MPs, as well as rail passengers up and down the country. He said:
“RPI plus 3% is too much. The Government will fund a reduction in the increase to RPI plus 1%. This will apply across national rail regulated fares, across the London tube and on London buses. It will help the millions of people who use our trains.”—[Official Report, 29 November 2011; Vol. 536, c. 810.]
The real question today is: what has changed? Why is a 3% above inflation increase acceptable this year, when it was, in the Chancellor’s words, “too much” last year?
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
Is not the timeliness of today’s debate emphasised by the analysis of fares in the south-east conducted by the Campaign for Better Transport? Its chief executive, Stephen Joseph, pointed out just last month that commuters in the south-east routinely spend up to 15% of their salary on getting to work in London and that unless there is a change in fare policy by the Government, the cost of journeys to work is likely to rise by some £1,000 when fares next go up?
Maria Eagle
My hon. Friend makes an important point. We are all now hearing from constituents who are paying out significant parts of their salary in the mere effort to get to and from work. There comes a point when, with other pressures, it is not acceptable for fares to rise at the level that the Government are contemplating.
Maria Eagle
The hon. Gentleman is right that there is a choice to be made about where to pitch the figure for RPI plus or minus whatever it is. Today’s motion is based on our current policy as it is—something I think the Government could agree with—which retains credibility in terms of deficit reduction, but which would also bring significant relief—[Laughter.] I do not know why Liberal Democrat Members are laughing. Despite their alleged policy to cut rail fares, they have voted repeatedly in this Parliament for Budgets, autumn statements and comprehensive spending review measures that increase rail fares by RPI plus 3%, so we are not going to take any lessons from them about how to implement policy on rail fares.
Maria Eagle
No, I will not.
Why is a 3% above inflation increase acceptable this year, when it was, in the Chancellor’s words, “too much” last year?
Mark Reckless
The hon. Lady asks why an RPI plus 3% increase might be acceptable, but this Government have not increased any rail fares yet by RPI plus 3%. The only RPI plus 3% increase happened on the Southeastern franchise under the last Labour Government, because we were used as guinea pigs.
Maria Eagle
The hon. Gentleman is simply wrong about that. RPI plus 3% was cut last year to RPI plus 1%, but the year before it was RPI plus 3%, so what he says is simply inaccurate.
If anything, pressures on household budgets have increased in the past year. Families are finding it even harder to make ends meet, get through the month and pay all the bills. We are in a double-dip recession made in Downing street. More than 1 million young people remain out of work. Energy, food and fuel prices are all up, adding to the pressures facing our constituents. The rate of inflation—the RPI figure that will be used to calculate January’s fare rises—went up to 3.2% in July. With flex, the formula for January’s fare rises, as it stands, is 3.2% plus 3% plus 5%, which means fare rises of up to 11.2%. We should get rid of flex, but we should also—as the Chancellor said less than a year ago—set the cap at 1% above inflation.
I know that the Secretary of State has been appointed to change some of the policies pursued by his predecessor—at least that is what the newspapers say. However, I hope that on this issue he will agree with the right hon. Member for Putney (Justine Greening), who told the Financial Times last month:
“I am keen to see what we can do to keep fares down to something affordable. I will be looking at whether there is a way of doing this in the autumn.”
She added that
“she did not know if the Treasury would make funds available to do this,”
but said:
“If you don’t ask, you don’t get, so I’ll make sure to ask.”
If the Secretary of State has not already done so, I hope that he will be asking the Chancellor to agree to the lower cap on fares, because as his predecessor rightly said, “If you don’t ask, you don’t get.”
Rehman Chishti (Gillingham and Rainham) (Con)
Will the shadow Secretary of State clarify whether she accepts that her Government were wrong to impose RPI plus 3% on Southeastern, when the rest of the country had RPI plus 1%? That meant that from the Medway towns to London there was an increase of over 33%. Does she accept that that was wrong?
Maria Eagle
I am not sure that the hon. Gentleman listened to what I said earlier, but I have already said that I did not think it was right to tie such increases into specific improvements on specific lines, which is what happened in that case, and I have said that before. Perhaps if he listens a little more carefully, he will not have to intervene. I said that I did not think that was right, but the current Government—
Maria Eagle
I am in the middle of answering the hon. Member for Gillingham and Rainham (Rehman Chishti).
The current Government are proposing an across-the-board increase of RPI plus 3% on everyone, whether or not there is any improvement in investment or any increase in service. At a time like this, when people’s incomes are being squeezed badly, it is not easy for them to cope with that. We should not continue with those levels of increases.
Maria Eagle
I will give way to the hon. Member for Cambridge (Dr Huppert), because he is clearly very keen.
Dr Huppert
I thank the shadow Secretary of State for finally giving way—it has taken some effort. While she is in the mood for apologising for errors made under the last Government, will she apologise for the fact that rail fares went up in cash terms by 66% in that time? That had a huge impact on people across the entire country and made fares completely unaffordable for many people.
Maria Eagle
The hon. Gentleman, who purports to be the transport spokesman for the Liberal Democrats, even though the Liberal Democrats have a Transport Minister in the Government—the Under-Secretary of State for Transport, the hon. Member for Lewes—is going round the country saying that his party is in favour of cutting fares, when he and his hon. and right hon. Friends are voting for Government measures that increase them. If he starts to apologise for some of that, I am sure we can sit down and talk about mutual apologies that may or may not be possible.
Maria Eagle
I will not give way to the hon. Gentleman again.
As the Secretary of State’s predecessor rightly said, “If you don’t ask, you don’t get.” That is the first thing that he can do in his first Cabinet meeting—well, not his first, but his first in this role. [Interruption.] Oh yes, the Chief Whip attended, but this time he will be able to vote, if there are any votes—there are occasionally votes at Cabinet, although perhaps not in this one.
We now know that many Government Members agree with us on this issue, because they have been busy telling their local newspapers that the fare rises are too high. The hon. Member—soon to be the right hon. Member—for Sevenoaks (Michael Fallon), who is now the Minister of State at the Department for Business, Innovation and Skills and who is, we are told, even now parked in a tank on the lawn of the Business Secretary, has gone so far as to present a petition to the House on the issue. He writes on his website:
“At a time of rising energy bills, and high inflation more generally, many of my constituents are having to make painful savings in their household budgets. Southeastern need to understand this and reduce the size of the rail fare increase”.
Our motion today would not only prevent train companies from imposing the eye-watering fare rises that the Business Minister rightly opposes; it would also cap his constituents’ fare rises at 1% above inflation.
The hon. Member for Harlow (Robert Halfon) has told his local newspaper:
“Harlow people are already struggling to make ends meet against a backdrop of rising petrol prices and wage freezes…They cannot be expected to pay massive rises in rail fares on top.”
The hon. Member for Chatham and Aylesford (Tracey Crouch) told her local paper:
“At a time when household budgets are stretched, the Government and Southeastern have a responsibility to ensure the cost of rail travel remains affordable. I will continue to make representations on behalf of my constituents”.
Good for her! Her neighbour, the hon. Member for Rochester and Strood (Mark Reckless), has said:
“What I have found with prices going up this fast is that many of my constituents have to get up at 5 am or 6 am to take a coach to London because they cannot afford to take the train whereas others have been priced out completely because they are spending almost all their take-home pay on a season ticket. I just think that is counter-productive. I think it is a question of fairness to people who are working hard and just doing their best.”
I agree with all those hon. Members’ representations.
I should also like to quote one or two Liberal Democrats. It will not be a great shock to the House to learn that many Lib Dem MPs have been sending out press releases to their local papers opposing their own Government—we all know that they do that. The hon. Member for Leeds North West (Greg Mulholland), who is not in his place, has said:
“I am very concerned at the proposed fare rises…At a time when the cost of living remains a big issue it’s not acceptable to ask rail users to pick up extra costs”.
The hon. Member for Manchester, Withington (Mr Leech) has actually claimed credit for last year’s U-turn, saying:
“I hope George Osborne and the Treasury will cut the train commuter some slack in the upcoming budget...Last year, Nick Clegg and Danny Alexander negotiated a RPI+1% fare rise for 2012, much lower than planned by some Conservatives. I hope they will do at least as much this budget.”
That is not very collegiate, but it is rather typical. I must not leave out the hon. Member for Cambridge, because he gets upset if I do. I can reassure the House that he has also spoken out, in his rather confusing role as co-chair of the Lib Dem transport committee. He has assured his local paper:
“I wrote to the Secretary of State for Transport earlier this summer to remind her of Liberal Democrat policy, and highlight our opposition to the RPI+3% rate.”
Putting out a press release is one thing—and it can be useful—but I hope that Members will follow their words up with action this afternoon and vote for this very straightforward motion, which proposes that the cap on annual fare rises should go back to the 1% above inflation cap that existed before the last election—which even the Chancellor conceded was right last year when he performed a U-turn—and that we should strictly enforce that cap, it being the will of the House, and not allow private train companies to add up to another 5% on to some fares. The result would be clear. Instead of 11.2% being the highest possible fare increase in January, no fare would rise by more than 1% above inflation. That would benefit our constituents considerably.
If we do not act, passengers are likely to face three years of double-digit fare rises on some routes, and many ticket prices will have risen by a third during this Parliament. We have reached a point at which increasing numbers of households are paying more on their season ticket just to get to work than on their mortgage or rent payments. For too long, Governments have let the train companies get away with treating passengers in a way that would not be permitted in other industries.
Maria Eagle
I am just coming to the end of my remarks; I think I have spoken for an appropriate length of time.
Today, we in this House have a chance to say, on behalf of our constituents, that enough is enough. I urge the House to put aside party differences and vote for the motion. It is something that we all agree on. Let us deliver for our constituents the guarantee that their rail fares will not rise by more than a strict annual cap of 1% above inflation.
Mr McLoughlin
I shall come on to some of the things we are going to do to improve the railway line that I use, which were announced before I became Secretary of State. I am very pleased about them, one of which is electrification. The last Government had a particularly poor record on that. There was a change in the franchise owners during the period of the last Government and certain changes were made to the service on that line.
Soaring demand meant that our ageing rail network was struggling to cope. There are now many more people travelling on the railways than at any time since 1929, but on a much smaller system. What does that mean? It means more overcrowding, more standing on trains, and rail consumers demanding a better service. We had to find a way to invest in the railway to support the economic recovery and to deliver the quality of service that passengers have the right to expect. That was the reality we faced, and we are meeting it head on by investing in the biggest rail modernisation programme since the Victorian era, while at the same time reforming the railways and reducing costs.
Maria Eagle
Does the right hon. Gentleman accept that during this Parliament and this spending review period, his Government have cut investment in the rail industry? Yes, they have announced a lot of investment for the next Parliament, in control period 5, which will go ahead some time in the future, but in this Parliament investment and infrastructure have been cut.
Mr McLoughlin
I was just coming on to say that this July, we announced £16 billion of public support for the existing rail network between 2014 and 2019—I expect 2014 to be during this particular Parliament—which will support over £9 billion of enhancements, meaning more services, more seats and more capacity, especially for commuters to our largest cities. The tap cannot simply be turned on as far as the rail industry is concerned. Passengers will also benefit from the completion of the northern hub in Manchester, £240 million of investment in capacity and connection improvements on the east coast main line, and a further £300 million for high-value, small-scale schemes in other parts of the country.
We are delivering a rolling programme of rail electrification on the Great Western main line to Swansea, on the valley lines into Cardiff and on the trans-Pennine route connecting Liverpool, Manchester, Leeds and York. We are creating a new “electric spine” for freight and passenger services stretching from the south coast to the east and west midlands and south Yorkshire.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I thank all those who have contributed to this debate, and I recognise the strong feelings that rightly exist about rail fares across the House and in all parties.
Reforming and modernising Britain’s railways is one of the Government’s top priorities. We are already delivering the most ambitious rail investment programme since the Victorian era to boost capacity and improve services. In July, we announced £9.4 billion of network upgrades across England and Wales for the period between 2014 and 2019, and a £4.5 billion contract to supply Britain with its next generation of nearly 600 intercity trains. As we heard earlier, we have committed to 861 miles of electrification—not nine miles, but one in nine miles of the entire network.
New tracks and trains are only one part of our blueprint for a better railway. We are also taking a fresh look at fares and ticketing to reflect the latest technologies and meet the changing needs of passengers. Such a review is long overdue. Many rail users find the current system archaic and impenetrable—we have recently concluded a public consultation inviting views on how we might make it more transparent, more accessible and more flexible.
One of the key drivers of change will be smart ticketing technology. In London, the Oyster smartcard has transformed public transport, providing passengers with a more efficient and convenient alternative to paper tickets, and accelerating the flow of people through busy rail and tube stations. Smart ticketing could pave the way for a new fares system offering discounts for passengers who avoid the busiest services. As well as benefiting individual rail users, it would help us make better and more efficient use of train capacity so the savings realised can be ploughed back into keeping fares affordable.
The Government’s ambition is for all public services to become digital by default. That means helping as many people as possible to switch to digital channels, while continuing to provide support for the small minority who cannot make the switch. Buying a train ticket should be no different. The hon. Member for Rutherglen and Hamilton West (Tom Greatrex) referred to the complexity of tickets and the difficulties people can have with ticket machines. Those two matters are being addressed fairly and squarely by the fares and ticketing review that the Department is undertaking.
The challenge for train companies, therefore, is to make buying a ticket online or from a machine just as easy as from a station ticket office. Purchasing a rail ticket should be a straightforward transaction, not an obstacle course. So as part of our reform programme, I want to ensure that when passengers buy tickets, they can navigate the choices available and find the best ticket for their journey, quickly and clearly. Train companies need to improve their machines so that they sell the full range of tickets and guide passengers through each step of the process. As I said, that is all part of the fares and ticketing review that is now under way.
As I mentioned, we are all concerned about rail fares and we all want an end to above-inflation fare rises, but it is important to put the Opposition’s motion in context. Under them, rail fares increased by 1% below inflation, but that was changed to 1% above inflation in 2004. Under the previous Government, therefore, we had years of above-inflation rises, and it appears from the motion that it would still be Labour’s policy, were it to come to power, to have years of above-inflation rises. We want to end these above-inflation rises, not continue them indefinitely, as the motion suggests doing. It looks a little opportunistic to talk about fares being capped, given that the record of the previous Government was one of continual year-on-year above-inflation increases.
We have heard about the issue of flex, which is the ability not only to increase fares above inflation, but—the Opposition did not mention this—to increase a lot of fares below inflation. The previous Government introduced flex in 2004, and it ran through until 2010, so it was in operation for several years. A 2010 deed of amendment introduced by the then Transport Secretary reads:
“With effect from 00.00 on 1 January 2010 Schedule 5.5 of the Franchise Agreement will be amended as set out in the Appendix to the Deed… From 00.00 on 1 January 2011”,
which is just after the general election, Members may note,
“the amendments to the Franchise Agreement set out in this Deed of Amendment shall be reversed”.
So there was a deliberate policy from the previous Government to end flex only for one year, and over a period that happened to cross the general election.
Maria Eagle
My noble Friend Lord Adonis made it clear that it was his policy to put an end to flex full stop and that it remained his intention to do so. The deed to which the Minister referred was a one-year way of dealing with it, but of course we were running into a general election, and there are rules about binding successors. Is he asserting that my noble Friend has been misleading the Transport Committee about his policy intentions?
Norman Baker
I am merely reading out the legalistic words that the previous Transport Secretary put in place stating that the policy was to be reversed on 1 January 2011. The facts speak for themselves. I have to ask, however, if the Opposition’s policy is now to end the flex, why the Welsh Assembly Government, run by the Labour party, continue to operate it. I have not heard any words from the Opposition condemning the Welsh Assembly Government. Or is it all right to have flex in Wales, where Labour is in control, but not in England, where we are determining policy for rail matters over here?
I am interested in a point that several Members made about the split of the responsibility for paying for the railways between passengers and taxpayers. The point about where that balance should lie is very important. The Opposition spokesman will know that Labour’s plan was for a 70% passenger and 30% taxpayer split. In 2010, the percentages were 64% passenger and 36% taxpayer, so one assumes that Labour wants to increase the percentage in order to reach its 70% figure. Our policy priority does not include worrying about the split per se, but is about getting efficiencies into the rail network—a point that my hon. Friend the Member for Northampton South (Mr Binley) rightly made. I can assure him that we are taking great steps to improve the efficiency of the rail network, and by and large we have adopted the report from Roy McNulty, which was a helpful contribution to the debate on the rail network, in order to bring down our costs.
Roy McNulty indicated that costs were about 40% above what they should be, and we are determined to make those savings. We have identified savings of £1.2 billion in control period 4—the present control period—and up to £2.9 billion of further savings in control period 5. There are further savings to be made through genuine efficiencies—not cuts—in how the railway is run. One, for example, is the alliance project between Network Rail and South West Trains. I am not quite sure whether the Opposition support that trial, but it is delivering real savings and efficiencies, eliminating duplication, reducing the cost of the railway and providing a better service for the people who use South West Trains. That is an example of how efficiency savings can improve services. I am happy to say that it is now happening on South West Trains.