Rail Franchising

Maria Eagle Excerpts

Tuesday 26th March 2013 Commons Chamber

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

I thank the Secretary of State for advance sight of his statement. He inherited a Department in crisis and a rail franchising system in chaos. I acknowledge that he has had to work hard to try to put things back on track. He has rightly reversed many of the decisions of his two predecessors, not least by restoring some of the key posts in the Department that had recklessly been axed by them. We welcome the speed with which the right hon. Gentleman has worked with Richard Brown and his departmental officials to put together the plans he has set out today. However, it is also true that his revised franchising timetable has exposed the full impact of the failure of his predecessors, all of whom either remain in the Cabinet or have been promoted to it.

The Great Western contract will be awarded in July 2016—three years and three months later than planned. The west coast contract will not be awarded until April 2017—four years and four months late. Some competitions are to be delayed by as much as 50 months—not five months, but 50—yet instead of focusing on the chaos in franchising caused by his Government’s incompetence, the Secretary of State has decided to embark on an unnecessary and costly privatisation of the east coast inter-city services—a privatisation due to take place weeks before the date of the next general election.

The right hon. Gentleman hinted that investment was dependent on that happening, but will he acknowledge that the planned investment in the east coast main line, to be delivered by Network Rail, and the new generation of inter-city trains will happen regardless of this privatisation? Is it not the case that Directly Operated Railways has reinvested all of its £40 million profit in the east coast service on top of the £640 million paid to Government, with every pound of profit going back in for the benefit of passengers? That profit will, under the Secretary of State’s new plans, be shared with shareholders in future. Instead of talking down the current operator of the east coast, will he join me in praising the team there for the work they have done, and think again about his plans?

Will the Secretary of State update the House on the latest cost of the franchising fiasco, not least since his Department appears to be facing legal action from several more train operating companies? Will he correct the claim in his Department’s press notice today that this is the first time that a full franchise timetable has been published? I have with me the previous full timetable that was inherited from the previous Government and republished by his Government. Does he accept that what has changed is simply the fact that all the competitions have now been delayed?

The Secretary of State has also changed the proposed order of the competitions, leading in some cases to very long extensions to existing contracts. What is his thinking behind that decision? Will he clarify the role of the new franchising advisory board that Richard Brown recommended in his review and is now to chair? The first version of the written ministerial statement this morning stated that it would be a cross-industry body and that it would support bidders, but the corrected version appears to have dropped those claims. What, then, is it to do exactly?

What has happened to the Government’s previous enthusiasm for devolution? Will the right hon. Gentleman update the House on discussions with transport authorities covering the Northern and TransPennine franchises and services in the midlands? Does he still anticipate devolving responsibility at the revised start date for these franchises? Have the Government given further consideration to the calls from the Mayor of London and Transport for London for devolution of the remaining former Network SouthEast services?

For the sake of passengers, taxpayers and those working across the rail industry, the whole House wants to see us get beyond the problems of the past year. I wish the Secretary of State well in doing that, but I urge him to focus his efforts on getting back on track the bits of the system that need fixing, rather than those that do not.

[Mr McLoughlin]

I thank the hon. Lady for her response to my statement. It was not quite as warm as that of the CBI, Passenger Focus or the British Chambers of Commerce, which were much fuller in their acknowledgement of our putting the future for the rail industry so clearly.

The hon. Lady has obviously forgotten what the last Labour Secretary of State, the noble Lord Adonis, said on 9 February 2010:

“The Government believe that the ability of private sector operators to attract more passengers, grow the market, improve the service and receive revenue benefits of such actions is a key element in the current franchise model and one of the reasons for the significant growth delivered in recent years.”—[Official Report, House of Lords, 9 February 2010; Vol. 717, c. WA122.]

It is certainly true that we are talking about a huge growth in rail traffic and rail transportation, with people relying on the railways. I could go on to quote—but I know you prefer shorter answers, Mr Speaker—the right hon. Member for Tooting (Sadiq Khan), who occupied my position before the last general election, as he praised the role of franchising.

I believe that the east coast line should be the first under the new system. I pay tribute to the work done by Directly Operated Railways, which has operated it, but when the hon. Lady talks about figures, she should look at the track access charges paid in control period 3 by National Express when it ran the east coast line. It paid £210 million in track access charges, whereas DOR now has to pay its track access charges of £92 million. [Interruption.] I can tell the shadow Leader of the House that that was paid in the year to which I referred.

That explains why we have set out a very clear set of proposals about where we are going, notifying the industry about the future, which I think is a bright one, and setting out the huge investment that we—and, indeed, Network Rail—are putting into the rail industry.

--- Later in debate ---

[Mr McLoughlin]

The date of the new contract for East Midlands will be mid-way through 2017, and a direct-operated tender deal will come to fruition in 2015. I hope my hon. Friend accepts that the fact that electrification of that line is included in next set of Network Rail works shows our commitment to it. I know how important—

[Maria Eagle]

In the next Parliament.

[Mr McLoughlin]

The hon. Lady says that, but the process starts in 2014, which is in this Parliament. I can assure her that 2014 will be in this Parliament, not the next Parliament, in which case we will be electrifying that line.