West Coast Main Line

Debate between Maria Eagle and Lord Hammond of Runnymede

Monday 17th September 2012 Westminster Hall

[Mr Hammond]

My hon. Friend is right to make that point. As I said, my right hon. Friend the Member for Runnymede and Weybridge had made the announcement in May 2011 and set out the timetable. It was apparent from that time when the announcement of the bids would be.

A thorough examination of the bids was carried out over nearly three months. As soon as the winning bidder was identified, in accordance with existing practice and the published timetable, the Department ensured that announcements were made to the London stock exchange that it intended to award the inter-city west coast franchise to First West Coast Ltd, a subsidiary of First.

A number of Members talked about parliamentary scrutiny today. It is not unusual that the announcement was made during a recess. On two occasions, the previous Government made announcements to the market, quite properly, on days when the House of Commons was not sitting. To suggest that that is a new way of doing something—

[Maria Eagle]

I did not suggest that.

[Mr Hammond]

The hon. Lady comments from a sedentary position. She is quite right; she did not suggest that, but a number of her colleagues did. It is not a new way of doing things, provided that as soon as Ministers return to the House, they make a written ministerial statement. Following the announcement on 15 August, on the first possible date thereafter—3 September—my right hon. Friend the Member for Chipping Barnet took the opportunity to make a written ministerial statement to the House.

After the announcement, the Department received a legal challenge to the procurement from Virgin Trains Ltd, which had bid unsuccessfully. I intend to try to answer as many questions as possible, but I do not need to be reminded—I am sure that hon. Members do not either—that in cases where there is a legal challenge, it is difficult to answer all the questions that may be asked. As I said earlier, if I appear reticent, it is not any wish not to be transparent, but simply that when matters are subject to the judicial process, it is impossible to make broader comment.

It is right and proper, and the Department believes so, that our choices regarding new franchises and value for money for the taxpayer are subject to scrutiny by Parliament. However, there is a right and proper time for that to take place.

Many hon. Members paid tributes, quite rightly, to Virgin Group. Sir Richard Branson and Virgin have made an undeniable and tremendous contribution to UK rail. Let me try to assure hon. Members that the winning bid offers significant benefits to passengers. First West Coast Ltd has contracted to introduce 11 new electric trains of six carriages from December 2016. That will mean an extra 12,000 seats a day for passengers. First has also committed to retaining and fully refurbishing the trains already in the fleet.

In the speech by the hon. Member for Halton, his colleague the hon. Member for St Helens North (Mr Watts), who is not currently in his place, made a point about the leasing of trains. The short answer to his question is that commitment to lease trains is in the franchise agreement. To remove any part of the train fleet, the Secretary of State’s consent is required. I hope that that clears up that issue.

Subject to the approval of the Office of Rail Regulation, First will take advantage of the increased flexibility in the contract to introduce a number of new services from London Euston to Blackpool, Bolton, Telford Central and Shrewsbury. It will also introduce ITSO-based smart ticketing, which will benefit users across the country, bringing the sort of freedom that we have already seen in London with the Oyster system. It will not have escaped the attention of hon. Members that in its bid, alongside that investment, First West Coast Ltd has committed to reduce standard anytime fares by on average about 15% over the first two years.

There have been a number of questions on staff and morale. I reassure hon. Members that, as with previous franchise transfers, existing employees, including drivers, guards and back-office staff assigned to the part of the organisation transferred to First West Coast Ltd, will be protected by TUPE regulations. FirstGroup has also given a commitment to continued investment in front-line staff.

I reassure the hon. Member for Ynys Môn that all bids were assessed independently for deliverability, and all bids were assessed as deliverable. The Department believes that the winning bid is deliverable, provides value for money for taxpayers and passengers, and capitalises on the £9 billion already invested in the west coast main line and the £18 billion the Government are continuing to invest.

None the less, as the hon. Member for Garston and Halewood said, the Government can learn lessons from the mistakes of previous Governments on handing back keys and the failure of certain people on the east coast main line to deliver. There have been several comments on the procurement process, and we are acutely aware that we need to ensure we learn lessons from past franchise failures. In designing the franchise, some of those comments and recommendations, particularly the Public Accounts Committee’s recommendations, following the failure of the east coast main line have been taken into account. We therefore required First West Coast Ltd to provide a third party-backed guarantee, the largest guarantee ever required.

We have also removed the cap and collar system that was in place for the east coast franchise and introduced a GDP support mechanism—a question was asked about that. Indeed, the mechanism supports the Government because there is protection whether GDP goes up or down. I will happily write to the hon. Member for Halton with the full details of that mechanism when I am able to do so.

Oral Answers to Questions

Debate between Maria Eagle and Lord Hammond of Runnymede

Thursday 15th September 2011 Commons Chamber

[Mr Hammond]

I am grateful to the hon. Lady for her question. We are sensitive to the pressures that the UK train manufacturing supply chain—not just Bombardier but the component suppliers—are under, and the Department is urgently looking at some other projects that might be advanced. In particular, the industry proposed a project to modify the cross-country Voyager train fleet so that it could run under electric power, which would provide—if Bombardier were to win the contract—a substantial piece of work for the crucial design department in Derby. That is at the heart of securing the future of that business.

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

Yesterday, the Deputy Prime Minister told the right hon. Gentleman to speed up delivery of Crossrail. Will he update the House on the new completion date for the project, which will, I presume, now be earlier than December 2019, the date to which he pushed it back after the election?

[Mr Hammond]

The Deputy Prime Minister did not tell me to speed up the Crossrail project. The thrust of his speech was the need to ensure that committed capital funds are spent on their intended profile. The requirements to keep demand in the economy mean that we must get those vital capital programmes spent on programme, and the Crossrail project is spending on programme and will deliver the completion of the project from 2016, with full running from 2019.

[Maria Eagle]

So the Deputy Prime Minister was wrong—there is no plan to bring forward projects and no plan for growth. May I ask the Transport Secretary about the procurement of trains for Crossrail? After his disastrous decision to award the Thameslink train contract to a company that will build the trains in Germany, putting at risk Britain’s train manufacturing industry, he has said that he is reviewing the Crossrail contract. As he has just confirmed that Crossrail is still being delivered on his slower timetable, rather than reviewing it for six months, why does he not scrap the process and start again, and this time ensure that Bombardier has a fair chance to secure the work. Finally—

Coastguard Modernisation

Debate between Maria Eagle and Lord Hammond of Runnymede

Thursday 14th July 2011 Commons Chamber

[The Secretary of State for Transport (Mr Philip Hammond)]

With permission, Mr Speaker, I should like to make a statement on the Government’s intentions for taking forward the process of coastguard modernisation in the light of responses received to the consultation that ended on 5 May 2011.

The key drivers behind the modernisation proposals are the need to address the limited resilience of current arrangements, distribute more effectively the work load experienced by different coastguard stations and provide enhanced opportunities for coastguard officers to develop professional skills, with pay levels reflecting enhanced responsibilities. There is also a need to contribute to the wider deficit reduction agenda.

The consultation set out proposals to create a nationally networked coastguard system with two maritime operations centres—one in the Southampton/Portsmouth area and one in Aberdeen—together with a 24-hour centre at Dover and five daytime-only centres. In addition to delivering greater resilience and better career progression, the proposals identified ways of managing costs while still delivering high levels of service to seafarers and the public. The proposals also set out our commitment to increase by 32 the number of regular uniformed coastguards deployed to support the front-line volunteer coastguard.

These drivers for change and our strategic objectives in this exercise remain unaltered, but throughout the consultation process. I have been clear that we are willing to listen to the views of the public, coastguard staff and other interested parties on the best way to deliver the outcomes we need to achieve. More than 1,800 responses were received, including many from serving coastguards. Of the total, 27 submissions suggested specific alternative solutions, all with a reduced number of stations but with differing concepts of operations. We are very grateful to all those who responded to the consultation and to the Transport Select Committee for also looking at the issues. This has been a model consultation, with many serious and thoughtful responses recognising the need to deliver the overall objectives but proposing alternative ways of doing so.

A number of common themes emerged from the consultation responses: first, widespread acceptance, as illustrated by all the alternative solutions put forward, that change is necessary; secondly, concerns about the potential loss of local knowledge and local contacts with volunteer coastguards and other search and rescue partners; and, thirdly, concerns over how the detailed concept of operations for the MOCs and sub-centres would work in practice, particularly how a handover between a daytime centre and a 24/7 MOC would work in practice. A review of all the consultation responses has been produced under the leadership of a non-executive director of the Maritime and Coastguard Agency, involving a number of serving coastguard officers and members of the Public and Commercial Services Union, and has been placed in the Library of the House. A formal response from the Government to the report of the Transport Select Committee will be provided separately.

In the light of the consultation responses, the Government have now concluded that it remains right to continue with the proposals for a nationally networked system with the introduction of one MOC capable of managing incidents anywhere and ensuring optimum distribution of work load across the system. Establishing one MOC, rather than the two previously proposed, allows us to address concerns over local knowledge and the robustness of the future concept of operations by retaining one of each of the current paired stations, with the retained centres operating as part of the nationally networked system 24 hours a day rather than during the daytime only. Staff in each of the current pair of stations are already familiar with, and frequently experience, managing incidents in an adjacent area.

We have also decided that the Northern Ireland coastguard station at Bangor should be retained because of the specific requirement to manage the civil contingency arrangements unique to Northern Ireland and the relationship with search and rescue partners in the Irish Republic with whom we co-ordinate closely in air sea rescues in the waters around the island of Ireland. In the light of the decision to retain one station from each pair and concerns raised about Welsh language communication, it has been decided to retain the Holyhead station, rather than the one at Liverpool. In response to concerns expressed over the resilience of infrastructure and communication links within the Scottish islands and between the islands and the Scottish mainland, we have decided to retain coastguard centres in both Stornoway and Shetland. A further review of the potential costs of vacating the existing sites in Swansea and Milford Haven has shown that there are no financial or operational reasons to favour either location, and in view of my Department’s already substantial levels of employment in Swansea, we have decided to retain the coastguard centre at Milford Haven rather than at Swansea.

In summary, subject to consultation on the changes to the previously announced approach, we will now proceed with the creation of a modernised coastguard service providing a nationally networked system comprising: one maritime operations centre in the Southampton-Portsmouth area with a disaster recovery back-up facility at the Dover station, which will retain its responsibilities for the Channel Navigation Information Service and will also serve as a sub-centre; and a further eight sub-centres, all operated on a 24-hour basis, located at Falmouth, Milford Haven, Holyhead, Belfast, Stornoway, Shetland, Aberdeen and Humber. The stations at Clyde, Forth, Portland, Liverpool, Yarmouth, Brixham, Thames and Swansea will close progressively over the period between 2012 and 2014-15. The station at Solent will be replaced by a new maritime operations centre in the Portsmouth-Southampton area. The small London station is unaffected by these proposals.

These revised proposals will deliver the modernisation required, and they are capable of delivering the same level of savings in the longer term as our previous proposals. They are right for the future of the coastguard service. I recognise, of course, that they will none the less represent a huge disappointment to those hon. Members whose constituencies are affected by the proposed closures.

The additional costs generated by retaining a total of 10 centres overall, plus London, all operating on a 24-hour basis, and the higher coastguard numbers that will be needed to do so, will be offset by operating only one maritime operations centre, in the Southampton-Portsmouth area, with a back-up centre, equipped but not staffed, at Dover. By moving to more efficient watch patterns, we will still be able to offer higher pay across the service to reflect higher levels of responsibility, while ensuring that costs overall remain within our planned funding for the coastguard as a whole.

The changes to the original consultation proposal that I have announced today will be the subject of a further period of consultation. This will run for 12 weeks from today, ending on 6 October 2011. Specifically, this includes the decision to retain Holyhead rather than Liverpool; the choice of Milford Haven rather than Swansea; the decision to retain stations at Shetland and Stornoway; and the decision to operate a single maritime operations centre, rather than two. These changes to our original proposals will deliver the modernised and more cost-effective service that we need for the 21st century, while also responding to the genuine concerns raised during the consultation process. I therefore commend them to the House.

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

I thank the right hon. Gentleman for his statement today, and for giving me early sight of it. I also thank him for coming to the House today; this is the first time that a Minister has made a statement at the Dispatch Box on this issue at any stage of this process. I must also tell him, however, that it was wholly inappropriate for him to brief The Sunday Telegraph and the Sunday Mirror at the weekend, both of which reported a “senior Government source” as confirming the changes to the proposals. He has clearly given even more detailed information on the fate of specific stations to regional newspapers and broadcasters for use this morning. Does he not understand that it is outrageous that our brave local coastguards should be hearing about their future through anonymous briefings to the press from Department for Transport officials? This is not the way to treat those who work to make our coastline a safer place. The Secretary of State should not have sought to spin such an important announcement in advance in the way that he chose to do.

The changes that the Secretary of State has announced today are a partial victory for the tireless campaigning of coastguards up and down the country. They are the people who best know the level of provision needed to keep our coastline safe. It has been an honour to meet and hear from so many of them over the past few months and to see at first hand their dedication. The campaign that they have fought has been based entirely on their concern for the safety of the communities that they serve, and today’s changes are a tribute to their commitment and tenacity.

It is incredible to think that the Secretary of State believed that the majority of our coastguard stations should not provide round-the-clock cover. It is right that he has abandoned those plans and recognised the need for stations to operate 24 hours a day, and I commend him for doing so. However, today’s announcement will result in the loss of just under half of all of Britain’s coastguard stations. That will be a devastating blow to the stations that he proposes to close, to the coastguards, to their families and to the communities that they serve and in which they are held with such respect.

These closures are driven entirely by the Government’s decision to cut the transport budget too far and too fast. It is incredible that the Secretary of State’s statement today focused almost entirely on issues of cost, rather than on the safety considerations that should have driven this review from the start.

The chief executive of the Maritime and Coastguard Agency was very clear when he appeared before the Transport Select Committee on 8 February this year. He said that he had been

“required to find 22% budget reduction in my programme between now and 31 March 2015”.

He went on to say that the closure of coastguard stations was

“part of an overall strategy to bring my....expenditure into line with the budget provision I have been given now for the comprehensive spending review.”

These reforms are about cutting budgets, not about improving the safety of Britain’s coastline.

All along, the proposals have been ill thought out, careless and rushed. It was quite clear that Ministers had already decided exactly which stations were to close when the original consultation was published. The leaked early draft of the consultation that I was sent showed clearly that the public were to be asked for their views not on alternative options but on a decision that had clearly already been made in the Department. Only just before publication did Ministers decide to put in the choices between Liverpool and Belfast and between Shetland and Stornoway, making it clear that this was done for no other reason than to give the impression of a consultation when it was nothing of the sort.

Most incredible of all is the fact that no risk assessment was published alongside the proposals. The Select Committee found that

“by failing to publish a risk assessment of the current plans or an impact assessment of the previous round of closures until prompted, the MCA management has badly miscalculated. It has mishandled the consultation and made it appear opaque rather than clear and open-minded.”

It is clear that, had it not been for the campaign fought up and down the country, and the impressive expert work of the Transport Select Committee—I pay tribute to my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) for her chairmanship of that Committee—Ministers would have implemented these spending review-driven closures.

Throughout this process, there has been a failure by the Secretary of State adequately to ensure joined-up government with the Ministry of Defence, or even within his own Department, on the cumulative impact of the planned cuts. The coastguard station closures are compounded by the separate decision by his Department to end funding for emergency towing vessels. Let us not forget that they were a recommendation of Lord Donaldson’s inquiry into the Braer disaster. The Select Committee report found:

“The decision to cease the MCA’s provision of the Emergency Towing Vessels, which was made without consultation and against the findings of an independent risk assessment, is unwise and short-sighted. It is, quite literally, inviting disaster”.

The Secretary of State failed to consider the cumulative impact of the cuts being proposed by the MOD, not least the loss of the Nimrods and Sea King helicopters. The chief executive of the MCA told the Select Committee:

“It is fair to say that with the demise of the Nimrod we do not have the extent of search and rescue top cover that we had before.”

As a result of its own cuts, the MOD will be without maritime surveillance capability after 2015, leaving a massive capacity gap that will only compound the impact of the Secretary of State’s decision to close nearly half Britain’s coastguard stations.

May I ask the Secretary of State to tell the House exactly how many jobs will be lost as a result of the closures that he has confirmed today? What is the grade and post breakdown for the jobs that will be lost? What estimate has been made of the cost of redundancy payments? Will he agree to carry out and publish a new detailed risk assessment of the revised proposals, so that it can be considered before the period of consultation begins? It is difficult to see how a genuine consultation can take place without such an assessment being carried out first. Will he also ensure that this new risk assessment is carried out jointly with the MOD? It is essential that we have joined-up government when it comes to the safety of our coastline. Will he commit to coming back to the House in person, following this further period of consultation, rather than briefing any further changes to the media—out of respect for our coastguards, if for no other reason?

The excellent report of the Transport Select Committee into these closures concluded:

“The evidence we have received raises serious concerns that safety will be jeopardised if these proposals proceed”.

The confirmation that certain stations will remain open and the decision to retain 24-hour cover will be welcomed, but the revised set of proposals that the Secretary of State has set out today will not provide the reassurance that the public need and expect. The communities served by the stations that are to close in Clyde, Forth, Portland, Yarmouth, Brixham, Thames and Swansea, and my own local station in Liverpool, will be devastated at the loss of their local coastguard. The reality is that coastguards have seen their work loads increase in recent years, as our shipping lanes have become busier and they are called out to deal with more incidents. How can the answer be fewer operating bases? Improving the interoperability between the existing centres is surely possible without a reduction in the number of coastguard stations, with the loss of local expertise that this will entail. Axing one out of each paired station will lead to a considerable loss of local knowledge; it is incomprehensible that staff based in Belfast will have the same local knowledge about Liverpool bay as the existing local coastguards.

What the right hon. Gentleman must do now is not have a consultation on the changes announced today, but have a full new consultation on the entire set of proposals, following a fresh risk assessment and covering all of the proposals across government, including from the Ministry of Defence, that impact on the future safety of our coastline.

[Mr Hammond]

I do not remember the hon. Lady being quite so sanctimonious about briefing during the years that she was in government. She says that this is a victory for people who have protested up and down the country. I will tell her what it is: it is a victory for common sense and a victory for the consultation process. The Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead (Mike Penning), the shipping Minister, has been around coastguard stations up and down the country and received delegations from every coastguard station and every major seafaring community in the country and talked to them about their specific concerns. Working with the professional team at the coastguard agency, we have woven those concerns into the revised proposal that I have presented today.

The hon. Lady says that she cannot believe that the original proposals I presented included the loss of round-the-clock cover. That is a little strange, because the proposals I presented were those that my hon. Friend the shipping Minister found on his desk when he inherited the post in May 2010. The Labour party had failed to present those proposals publicly for fear of dealing with the fallout.

I recognise, of course, that the loss of a significant number of local stations is a blow to the communities that host them, but it is absolutely wrong for the hon. Lady to say that this process is driven only by the need to save costs, although there clearly is a need to save costs in the light of the chronic fiscal situation that we inherited from Labour. The fact is that the current structure of the coastguard does not reflect the technology or the concept of operations current today. We have to reinforce the ability to share work around the system, to deal with fluctuations in work load and variations in work load between different parts of our coastline.

I can tell the hon. Lady that risk assessments have been published and, in answer to her specific question, a further risk assessment relating to these proposals will be published. My hon. Friend the Under-Secretary tells me that he thinks that will be done within the next week.

I am somewhat bemused by the hon. Lady’s foray into the area of Sea Kings and Nimrods since we are talking here specifically about the coastguard control centres. I would be happy to talk to my right hon. Friend the Secretary of State for Defence, but I do not believe that he wishes to make any further input into this process.

The hon. Lady asked me specifically about the total job losses. The total number of uniformed coastguards will, as a result of these proposals, fall from 573 at present to 436 once the transformation is completed by 2014-15. That includes coastguards based in the operational centres, coastguards deployed to support the front-line volunteer coastguard and a small number at Maritime and Coastguard Agency headquarters. I cannot provide an exact breakdown of the grades of the jobs that will be lost, but I am happy to write to the hon. Lady and place a copy of my letter in the Library in the usual way. I am also quite happy to confirm that I will make a further statement, either written or oral, once the consultation process is over.

If the hon. Lady had looked a little more closely at what we are proposing, she would understand that we have responded very effectively to the central thrust of the responses that we have received, which was about the loss of local knowledge and concerns about handing over from daytime operations to the 24-hour marine operation centre. The retention of one centre from each pair does answer the local knowledge question, and the example the hon. Lady gave, relating to her own constituency, is ill informed since Liverpool is actually paired with Holyhead, which will now be retained. She will find that the coastguards at Holyhead routinely deal with operations in Liverpool bay and have a working local knowledge of conditions in the bay.

I believe that these proposals are a robust solution to deliver a future coastguard service that will be resilient, effective and affordable into the 21st century.

Oral Answers to Questions

Debate between Maria Eagle and Lord Hammond of Runnymede

Thursday 23rd June 2011 Commons Chamber

[Mr Hammond]

Once again, I am certain that the right hon. Gentleman will have submitted his views to the Chancellor in the consultation to which I just referred.

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

Britain’s business community finds it incredible that the Government have no intention of bringing forward a proper strategy for aviation and UK airports for the next two years. Opposition Members believe that any expansion in aviation must be sustainable, but is it not nonsense for the Government to rule out any expansion in the south-east, regardless of whether or not it can be demonstrated to be sustainable. Is not the chief executive of London First right when she warns that this failure is

“damaging our economy and enhancing that of our EU rivals”?

[Mr Hammond]

The hon. Lady is right that we have a big challenge in relation to aviation growth in the south-east. What I did not hear her do was repeat Labour’s policy to build a third runway at Heathrow airport. Perhaps at some stage she could tell the House whether that remains Labour’s policy. The coalition Government cancelled the third runway at Heathrow because of the unacceptable environmental burden that it imposed, but we are committed to developing a new and sustainable aviation strategy that will allow the growth of aviation in the UK—but only when it meets its environmental obligations.

McNulty Report and West Coast Rail

Debate between Maria Eagle and Lord Hammond of Runnymede

Thursday 19th May 2011 Commons Chamber

[The Secretary of State for Transport (Mr Philip Hammond)]

With permission, Mr Speaker, I would like to make a statement about the publication today of Sir Roy McNulty’s independent study into value for money in the rail industry, and to update the House about the west coast franchise process.

Sir Roy’s report notes that UK rail has enjoyed a revival in recent years, with strong and resilient growth in overall passenger numbers and in passenger satisfaction, and huge improvements in reliability and safety. The Government want Britain’s railways to continue to prosper and have demonstrated by their actions their commitment to them. Despite the difficult fiscal climate, we have allocated funding to complete Crossrail and Thameslink, and to support the upgrade of the London underground. We have announced electrification on the great western main line and in north-west England. We have resumed the intercity express programme to improve reliability, comfort and journey times on the east coast and Great Western main lines. We have given the go-ahead to the Ordsall chord project in Manchester and the Swindon to Kemble redoubling. We have confirmed the purchase of more than 2,000 new rail vehicles for Thameslink, Crossrail and other franchises, and the cascading of 100s more. Last but not least, we have begun the High Speed 2 consultation process.

But Sir Roy made another, less welcome, finding. Spending on the passenger railway has increased by 60% in real terms since 1996-97—that is more than £4 billion—and despite significant passenger growth, unit costs in 2009 were almost exactly the same in real terms as in 1996. Therefore, UK rail is now up to 40% more expensive per passenger mile than the railways of our European competitors. Allowing for unavoidable differences, Sir Roy estimates that UK rail costs are 20% to 30% higher than they should be, and that potential savings of between £740 million and £1.05 billion a year could be found by 2018-19 without any reduction in services. Those savings, added to the savings that Network Rail is committed to achieving up to 2014 and the savings that Sir Roy expects the regulator to seek from Network Rail over the period to 2019, should largely close the efficiency gap.

Many of Sir Roy’s recommendations are directed to the industry, and the open and inclusive process that the study adopted means that some of them are already being implemented. The industry has come together to form a rail delivery group to provide the leadership that Sir Roy noted was lacking in the past. Network Rail has announced its plans to devolve significant autonomy to route managers across the network, starting with the Wessex and Scottish regions.

Sir Roy’s remit, which was set by my predecessor and the Office of Rail Regulation which co-sponsored the study, was narrowly focused on the cost base of the railway. He makes a large number of recommendations. Over the coming months, the Government will consider the recommendations that are directed to them, and they will deliver their response later this year. Many of the recommendations on franchises reflect the changes that the Government have already announced. In addition, I can confirm today that my Department will accept Sir Roy’s recommendation that it should conduct a full review of fares policy, which will include addressing anomalies in the current system and the potential for much greater use of smart technology. In parallel, the Government are developing a wider rail strategy to ensure that we have an affordable, sustainable, safe and high-quality railway that delivers a better deal to taxpayers and fare payers. It will set out clearly the roles of central and local government, train operators and Network Rail in securing the future of the railway.

This is urgent and vital work. Let us be in no doubt that the excessive cost base that Sir Roy has identified is the reason that UK rail fares are the highest in Europe by some margin, even though our levels of taxpayer subsidy are also among the highest in Europe. Let us be clear about the potential prize. The successful delivery of cost reductions over the next few years on the scale set out by McNulty would enable us to reduce levels of taxpayer subsidy and, at the same time, put the era of inflation-busting fare increases behind us.

To achieve the challenging targets for cost reduction and industry-wide efficiency that Sir Roy has identified, all players in the industry will have to work together. The train operators, Network Rail, rolling stock companies, unions and the Government cannot avoid playing their part if we are to deliver a sustainable and affordable railway for the future.

Sir Roy makes it clear that the Department needs to step back from excessively detailed specification of train services and the micro-management of rail operations. I recognise that that will represent a major culture change, but it is one that I am determined to deliver. I would like to place on record my thanks to Sir Roy McNulty and his team for the excellent work they have done, and to welcome Sir Roy’s commitment to working with the industry on an ongoing basis.

I also wish to announce to the House the publication of the draft invitation to tender and stakeholder briefing document for the intercity west coast franchise, which lays out the train service specification that I am minded to procure for that route. As I have said, the Government have already adopted Sir Roy’s recommendation that franchise specifications should become less prescriptive. The proposed train service specification for intercity west coast represents a relaxation of the rigid timetable specifications of the past, while retaining obligations that protect the key elements of service such as principal first and last train services and minimum numbers of station stops per week and per day. That marks a significant shift from the micro-management under the current system that has prevented operators from maximising capacity and reacting to the changing demands of their passengers.

Among other proposed changes, we intend to replace the current cap and collar revenue-sharing system that has driven perverse behaviour by train operators with a gross domestic product-based risk-sharing arrangement and a profit-sharing mechanism that will ensure that the taxpayer benefits from any unexpected profits over the term of the franchise.

Because the relaxation of the full prescription of train services in line with Sir Roy’s recommendations was not signalled in the consultation document that we published on 19 January, I have decided that it is right and proper to consult on the proposals again, starting today and ending on 17 August. As a consequence of that decision, I can inform the House that the new franchise for the intercity west coast will now be awarded in August 2012, after a competitive process involving the four shortlisted train operators, and will commence operations on 9 December 2012. In making that decision, I have deliberately avoided a change of franchise immediately ahead of or during the Olympic period. I have also decided to take advantage of the short delay to complete the integration of the 106 new Pendolino carriages into the fleet prior to the commencement of the new franchise. The Department will seek to agree acceptable terms with the existing franchisee for a contract extension to 9 December 2012, but Directly Operated Railways Ltd, the Government-owned company that runs East Coast, will be ready to operate the franchise between April and December 2012 if necessary.

Copies of the rail value-for-money study and the draft invitation to tender for the west coast main line have been placed in the Libraries of both Houses and are available on the Department’s website. Our expectation is that future passenger franchises on UK rail will allow operators greater flexibility to meet passenger demand and pursue innovation, while protecting the key elements of service for passengers.

Longer franchises and a changed relationship with Network Rail will have a positive impact on the behaviour of train operators and their appetite for investment and risk taking. However, I want to send a clear message that the new culture of co-operation in the rail industry, and the focus on cost reduction, is here to stay and is mandatory, not optional. I can announce today that as a matter of policy for all future franchise competitions, a significant part of the assessment of bidders’ capability at the pre-qualification stage will be evidence of success in collaborative working and driving down costs.

The facts are clear: our railway costs too much, and in consequence fares are rising faster than inflation and taxpayer subsidy has reached unsustainable levels. To secure the future of the railway, we now have to tackle that problem after a decade of ignoring it and get costs into line with those of our European comparators, bringing relief to taxpayers and the prospect of an end to the era of above-inflation fare increases to passengers. I commend this statement to the House.

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

I begin by thanking the Secretary of State for early sight of his statement. May I place on record the thanks of Labour Members to Sir Roy McNulty for the detailed and thorough work that he has carried out? As the right hon. Gentleman acknowledged, that work began under the previous Government.

I have said before that we would look seriously at the conclusions of the value-for-money review and support any sensible proposals to take costs out of the industry. I promise again today that we will study the details of Sir Roy’s report, and that it will inform our own transport policy review.

I agree with the Secretary of State that we should reduce the public subsidy to the rail industry, and we need to be clear about why much of that subsidy exists if we are to address it effectively. It is partly the result of the enormous structural fragmentation within the industry, and let us be clear that that fragmentation is the legacy of the botched privatisation carried out in the dying days of the last Conservative Government. The Secretary of State should have apologised today for the shambles of that privatisation and the staggering sums of money wasted as a result. Unlike him, I take our share of the responsibility for being too timid about addressing that fragmentation during our time in government.

Closer working between train operators and Network Rail makes sense, and I support the internal reorganisation that is going on at Network Rail and many of the proposals that have been made to ensure that costs are removed through greater partnership. I am pleased that the Secretary of State appears to have stepped back from his earlier plans for the wholesale breaking up of our rail infrastructure, which would have been a costly mistake and added yet more fragmentation to the industry. Can he confirm that he does not intend to proceed with an experiment of handing track over to train operating companies within any of the franchise areas? Previously there has been briefing that the East Anglia franchise would be used for that experiment. Can he reassure the House that that is no longer the plan?

I welcome the Secretary of State’s decision to establish a proper review of fares. Despite the efforts that we made, the current system is too complex and leaves passengers frustrated. However, does he understand why passengers will have very little faith that he does not intend to impose yet further hikes in ticket prices? At a time when families are feeling the squeeze on their household budgets, he has imposed fare rises of more than 30% over the next three years. I believe he was wrong to give back to train companies the right to average out the cap across their fares, rather than apply it to each fare individually as we insisted when we were in government. He was also wrong to increase the cap on regulated fares from 1% to 3% above inflation.

In opposition, the current Minister of State said that fare rises of such a level would

“price people off the railways”,

and the Under-Secretary of State, the hon. Member for Lewes (Norman Baker), promised below-inflation fare rises—more broken promises from the two Government parties. Will the Secretary of State reject proposals to give the train operating companies greater freedom to set the level of fares? Will he listen to his own consumer watchdog, Passenger Focus, which has today described the suggestion of reducing regulation on off-peak tickets as a “leap in the dark”? Does he share its concern, as I do, that if the plans go ahead, we might end up with affordable, flexible travel for longer journeys being confined to a brief window in the middle of the day?

Will the Secretary of State also reject the suggestion to remove any role for politicians in the setting of fares, which would effectively remove any public accountability for fares through the ballot box? The link between the fare box and the ballot box should not be broken.

May I urge the right hon. Gentleman to approach reform to staffing levels and pay and conditions within the rail industry in a spirit of partnership, not confrontation? That is something that we have not seen in the language and tone of briefings by his Department in recent days. I urge the trade unions to work with the Government as they look to carry out reforms within the industry, but will he ensure that he includes those who represent staff on the high-level group that he is establishing to take forward these reforms? As he considers staffing, will he understand the value that passengers place on staffed trains and open ticket offices, and the fact that women in particular feel safer in properly staffed stations, particularly late at night?

We have heard today the extent to which the right hon. Gentleman’s policy on rail franchising has descended into chaos and confusion, with his decision to delay the awarding of the west coast franchise. Can he confirm that First Group is to hand back its Great Western franchise three years ahead of schedule? Is the reason that it has given for that decision, as reported in the press, that it has calculated that it will make losses in the final years of its franchise period? Does he agree that that is unacceptable?

Will the Secretary of State confirm that there is a possibility that the east coast main line, the west coast main line and the Great Western franchises will all be run by the Government while he decides what his franchising policy is? Does that not make a mockery of the whole franchising system?

Does the Secretary of State understand why commuters in East Anglia are dismayed at the cost and chaos of his decision to award a contract for less than two years, risking three owners in as many years, with only the companies that supply the paint to redo the liveries benefiting? Are not the future of franchising, the massive public subsidies that go to the private train operating companies, and the vast sums that leave the industry in profits the big missing pieces of the work of looking at costs in the industry?

I welcome the Secretary of State’s decision to replace the current cap and collar revenue-sharing system, but does he agree that we will not get the costs of the industry under control until we look seriously at its structure and the future of franchising? The public want a simplified industry—one in which the driving force is less maximising profit and squeezing every last penny out of the fare payer and the taxpayer, and more the delivery of a world-class service. That is why I have committed Labour’s policy review to look at alternative models for the future of the rail industry, including not-for-profit models. I urge him to do the same.

Finally, the right hon. Gentleman’s statement was not the only announcement to be widely spun and briefed to the media in advance of his coming before the House. Several newspapers are reporting that he has abandoned his plans to close more than half the UK’s coastguard stations, yet the Opposition understand that far from abandoning the plans, he has simply put them on hold. Those plans were never agreed by Ministers in the previous Government, and I would not have approved them. Will he now take this opportunity to end the huge uncertainty facing coastguard stations and agree to abandon those reckless proposals?

[Mr Hammond]

I might get some guidance from you, Mr Deputy Speaker, on whether it is appropriate for me to respond to the hon. Lady’s comments on coastguards—I would be happy to do so if you indicate that that is in order.

Oral Answers to Questions

Debate between Maria Eagle and Lord Hammond of Runnymede

Thursday 5th May 2011 Commons Chamber

[Mr Hammond]

The hon. Gentleman makes two good points. First, the fare system is incredibly complex and, secondly, passengers face high fare levels—we fully appreciate that. The only way in which we can tackle high fare levels is to make the railway more efficient. We are determined to do so, and we will receive and publish shortly the report by Sir Roy McNulty on value for money on the railways, which will make proposals to achieve that objective.

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

I am glad that the issue of fares has come up, because on 9 March the Secretary of State attended a presentation on the findings of the rail value-for-money review, which he will publish later this month. I have a leaked copy, which includes a recommendation that in future rail franchises should have

“more freedom to set fares”.

Does he stand by what he told the House on 27 January, when he said that the objective of the review was

“to reduce the burden on both the taxpayer and the fare payer”?—[Official Report, 27 January 2011; Vol. 522, c. 426.]

[Mr Hammond]

Yes, absolutely—that is the key objective of the McNulty review. The hon. Lady will know, if she wants to look at this objectively, that we have severe crunch-points on our rail system, where the current pattern of fares is driving perverse behaviour. The 18.59 train north from Euston on a Friday evening is virtually empty, but the 19.01 train is packed, with people standing, and the police preventing others from joining the train for safety reasons, and that is because of the way in which the fare structure works. We must be able to use the pattern of fares to address crowding, and to avoid the perverse incentives that have been created.

[Maria Eagle]

Can the Secretary of State explain some quotes in the document that suggest that he will allow franchisees to do what they want with fares? For example, the document states that he needs

“to consider in letting future franchises: more freedom to set fares”

and should

“encourage TOCs to take a more commercial approach to fare setting”.

There are other such quotes in the document, which seems to suggest that he will allow train operating companies to charge whatever they want.

[Mr Hammond]

The hon. Lady is confusing herself. The document from which she has quoted is, I think, Sir Roy McNulty’s presentation to the seminar to which she referred. It is not a Government document.

--- Later in debate ---

[Mr Hammond]

I absolutely agree with my hon. Friend that the series of strikes is highly irresponsible. As I said last night, no one in the Government is spoiling for a fight with the unions, but the unions appear to be spoiling for a fight with London. I say to the RMT and other unions that that sort of irresponsible strike action, when an alternative, proper remedy—an ongoing employment tribunal—is available, only strengthens the hand of those, including the Mayor, who call for tougher industrial relations laws.

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

As the Secretary of State will know, today marks the closing of the consultation on his plans to axe more than half the UK’s coastguard stations, leaving just three offering 24-hour cover. Yet, in a letter to me this week, the Maritime and Coastguard Agency stated that the consultation,

“will be reopened in the Summer”.

Will the right hon. Gentleman confirm that the consultation closes today, as the letter says, “for the first time”? Given that it is increasingly clear that the policy is a shambles, why does he not just abandon the ill-thought-through proposals, which will leave our coastline a more dangerous place?

Intercity Express and Rail Electrification

Debate between Maria Eagle and Lord Hammond of Runnymede

Tuesday 1st March 2011 Commons Chamber

[The Secretary of State for Transport (Mr Philip Hammond)]

With permission, Mr Speaker, I shall make a statement on the Government’s plans for extension of the electrification of the Great Western main line and for the procurement of a replacement for the existing diesel inter-city trains. The two issues are closely connected. First, I shall address the provision of a new generation of inter-city 125 mph trains to take advantage of the electrification of the Great Western main line and to allow the phasing out of most of the ageing diesel InterCity 125s.

In February 2009, the intercity express programme, launched by the previous Government, identified Agility Trains, a consortium of Hitachi Rail and John Laing plc, as the preferred bidder to provide a new fleet of inter-city trains. Subsequently, the previous Government placed the process on hold and ordered a review of the procurement by Sir Andrew Foster. Last summer, recognising the fiscal challenges that the UK faces and the impact of the new Government’s plans for high-speed rail to Leeds and Manchester, Agility put forward an improved, lower-cost proposal to provide the required service through a mixed IEP fleet with some all-electric trains and some with a combination of electric and diesel power, allowing it to operate through services beyond the electrified railway. The proposal retained the more modern electric InterCity 225s on the east coast main line, as the previous Administration had proposed.

We have reviewed the proposal against the alternative of an all-electric fleet, with purpose-built diesel locomotives coupled to trains to haul them beyond the electrified railway. Either way, it would represent a multi-billion pound investment for this country, underpinning the operation of inter-city services on the conventional railway for many years to come, and it is imperative that the right choice be made.

As I said at the time of my statement to the House on 25 November, there were complex legal, technical and commercial issues to be addressed and both the Government and Agility Trains, as preferred bidder, recognised that. Over the past few months, we have worked together on these issues and I can now announce that I am resuming the IEP procurement and proceeding with the proposal that Agility Trains has put forward as preferred bidder. We will now work with Agility Trains with a view to reaching financial close by the end of this year. That is, of course, subject to the Government’s continuing to be satisfied that the proposal offers value for money as the commercial negotiations are concluded and that the final arrangements are compliant with the United Kingdom’s European Union obligations. This deal will allow us to provide better, faster, more comfortable services and to continue providing through journeys between London and parts of the rail network that are not electrified. In total, there will be over 11,000 more peak-time seats each day on the Great Western main line and the east coast main line post-IEP compared with today.

Hitachi is today confirming its plans to locate its European train manufacturing and assembly centre at Newton Aycliffe in County Durham. That investment is expected to create at least 500 direct permanent jobs, as well as hundreds of temporary construction jobs. Thousands more job opportunities will be created in the UK manufacturing and service supply chains. Coming just days after the news of the reopening of the Redcar steelworks, this is a massive and very welcome shot in the arm for the skilled work forces of the north-east’s industrial heartland.

I turn now to the related issue of electrification of the Great Western main line. I announced to the House on 25 November that, over the next six years, Network Rail will electrify the commuter services on the Great Western main line from London to Didcot, Oxford and Newbury. I recognise that this announcement, although welcomed in the Thames valley, left unanswered the clear aspirations of rail users further west for the extension of electrification to Bristol and into Wales. I and my right hon. Friend the Secretary of State for Wales have subsequently considered the options for extending electrification, alongside the Government’s consideration of the proposals for replacement of the current diesel InterCity trains, and in close consultation with the Welsh Assembly Government.

We have concluded that there is a case for extending electrification westwards to Bristol and Cardiff, and I am today asking Network Rail to add that major extension to its electrification programme immediately. This is good news for Wales and the south-west against a backdrop of public spending constraint as we deal with the legacy of debt that we inherited. Bringing electrification to Cardiff will mean that we are linking, for the first time, the capital cities of England, Scotland and Wales by electrified rail. These measures will deliver a London to Cardiff journey time of 1 hour and 42 minutes and will shave 22 minutes off the London to Bristol journey.

I have received representations calling for the electrification of the Great Western main line to be extended as far west as Swansea and we have looked carefully at the arguments. The business case for electrification is heavily dependent on the frequency of service. Services between London and Swansea currently operate at a frequency of only one train an hour off-peak. There is no evidence of a pattern of demand that would be likely to lead imminently to an increase in this frequency. Consequently, I regret to have to say that there is not, at present, a viable business case for electrification of the main line between Cardiff and Swansea.

However, because of the decision to proceed with Agility’s proposal for a bi-mode train, journey times from London to Swansea will be shortened to 2 hours and 39 minutes—20 minutes faster than today—with trains switching automatically to diesel power as they leave Cardiff. As the constraining factor on the south Wales main line is speed limitations dictated by the geometry of the line, there would be no time-saving benefits from electrifying the line from Cardiff to Swansea. However, the policy of the Government is to support a progressive electrification of the rail network in England and Wales, for environmental reasons among others. My right hon. Friend the Secretary of State for Wales and I will therefore keep under active review the business case for future electrification of the Great Western main line between Cardiff and Swansea in the light of developing future service patterns.

I have a further announcement to make to the House. In the course of the examination of the case for electrification in south Wales that I and my right hon. Friend have undertaken, we have established, at an initial high level, that there appears to be a good case for electrifying the key valley commuter lines north of Cardiff via Pontypridd and Caerphilly to Treherbert, Aberdare, Merthyr Tydfil, Coryton and Rhymney, as well as the lines to Penarth and Barry Island to the west. My Department will therefore work with the Welsh Assembly Government to develop a full business case for the electrification of the Cardiff valley lines during the next rail investment control period beginning in 2014. The Welsh Assembly Government will need, in parallel, to consider the case for specifying suitable electric trains for those routes when the Wales and Borders franchise is re-let in 2018. That would, of course, be a prerequisite for electrification proceeding, and the timetable for franchise re-letting and re-specification necessarily dictates the time scale of the proposed electrification.

On the basis of our preliminary evaluation, the valleys electrification represents the best value for money rail electrification investment that can be made in Wales. It promises to bring all the benefits of electric commuter trains—faster acceleration, greater comfort, cleaner and greener travel, and greater reliability—to rail users in south Wales. It would have a significant effect on the economy of Cardiff and the valleys by deepening labour markets, improving connectivity and significantly enhancing the attractiveness of the area to investors. Coupled with the electrification of the Great Western main line, it would represent a major boost to the economy of south Wales as a whole. These three decisions—on the intercity express programme, on Great Western main line electrification and on building the business case for electrification of the valleys commuter lines—represent a major further investment in UK rail infrastructure. They follow the announcements that I have already made on Crossrail, Thameslink, tube upgrades, Thames valley and north western electrification and additional rolling stock.

The decisions sit alongside the Government’s proposals for high-speed rail, the consultation on which I announced to the House in a written statement yesterday, as testimony to this Government’s commitment to investment in the future of Britain’s railways. They represent excellent news for passengers on the Great Western main line and the east coast main line, for commuters on the Cardiff valley lines and for the economies of south Wales and north-east England as a whole. I commend this statement to the House.

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

I thank the Secretary of State for the early sight of his statement—he actually sent me two statements, although they appear to be the same. I will begin by welcoming the much delayed green light that he has today given to the new intercity express programme, which was launched by Labour before the last election. That this programme is now to go ahead, with the significant boost for jobs that he referred to, is testament to the tenacity and tireless campaigning of my hon. Friend the Member for Sedgefield (Phil Wilson), The Northern Echo, the local community trade unions, particularly Unite, and the local work force. I congratulate them all on what has been an incredible triumph for their campaign.

Can the Secretary of State confirm when passengers will first be able to enjoy these new trains? Have the delays in making the announcement had any impact on the delivery date for the trains? Will he confirm whether he has made any other changes to the contract, for example to the number of trains or the cascading plan for the existing rolling stock, as a result of today’s announcement?

The Opposition obviously welcome the decision to go ahead with the electrification of a further stretch of the Great Western main line to Cardiff. It is the result of the commitment we made in government and also the efforts made since the Secretary of State’s last statement in November by my right hon. Friend the Member for Neath (Mr Hain), my hon. Friend the Member for Pontypridd (Owen Smith), the First Minister of Wales, Carwyn Jones, other MPs and Assembly Members, and the business community across south Wales. I am glad that the Secretary of State has listened to them about the vital need for modernisation, which will speed up the journey time between our capitals from 2 hours five minutes to 1 hour 40 minutes, which has to be welcome. It is a real boost to business, with the potential for investment and jobs, and to Wales.

However, does the Secretary of State understand the deep upset that will be felt by people in Swansea and across Wales at the St David’s day disappointment that the electrification will not continue as far as Swansea, as Labour had intended? He has broken his manifesto commitment to

“support the electrification of the Great Western line to South Wales.”

The Secretary of State for Wales, who I am glad to see is in her place, was pretty quiet yesterday when the Transport Secretary confirmed plans for a high-speed rail route through her constituency, which she previously said she could not support. The people of south Wales will expect her to be more vocal today in explaining why the Government have let down the people and businesses that are further south and west than Cardiff.

The Transport Secretary has just extolled the virtues of electrification, including, in his own words, its “significant effect on the economy of Cardiff and the valleys—deepening labour markets, improving connectivity and significantly enhancing the attractiveness of the area to investors.” Why cannot the people of Swansea, and of west Wales beyond Swansea, also have that advantage? Can he confirm when the electrification of the line to Cardiff will be completed, and why, as far as he is concerned, electrifying just 40 more miles of track to Swansea appears to be such a bad idea?

Is it not true that the case for electrification was previously approved by the Treasury? Anybody who has dealt with the Treasury, as we now all have, knows that the rate of return would have had to meet its tough criteria, so why does the right hon. Gentleman continue to suggest that there is no proper business case for electrification all the way to Swansea? Does he accept that, if Swansea is not a part of the single roll-out construction programme, the Government will incur 20% additional costs to stop construction and then take it up again? He is in fact saying that the stretch of line from Cardiff to Swansea will not be electrified at all—except by incurring unnecessarily high extra costs.

I welcome in the right hon. Gentleman’s statement the part about looking at further electrification in Wales on the valleys train lines, but he is holding out the promise of potentially producing a post-dated cheque at a later date, because there is no funding available in this spending review period. He says that he has made a decision about the matter, but his only decision has been to look at whether there is a business case, so there is no guarantee of his carrying out the project. Perhaps he is trying to deflect attention from the fact that he is failing to meet his manifesto commitment to take electrification all the way to Swansea.

Will the right hon. Gentleman update the House on where his Department is with the procurement of the 1,200 new carriages for Thameslink? We still have not heard about that major project, in which many UK jobs are at stake, and it would be good if we did not have to put up with Thameslink being hit by the same delays that have beset the IEP project. Does he have an updated time scale for when the new Thameslink and Crossrail trains will benefit passengers by actually being in service? Will he explain what impact the delay will have on the plans for cascading the existing rolling stock?

Why, when the right hon. Gentleman must have known that he was making a statement today, did he choose yesterday to slip out by written answer—without informing the media or the House—a decision to end all funding for local rail schemes that local authorities and integrated transport authorities develop? His decision means that no new schemes will be able to go ahead between now and April 2015. Can he explain why that decision was not made in the comprehensive spending review, and why he put it out yesterday under cover of his publication of the high-speed rail consultation?

As I have made clear, I welcome today’s confirmation of the investment in the rail network that Labour planned and announced when in government. The additional electrification and the major project to replace our outdated inter-city fleet will significantly improve the passenger experience on our rail network and bring economic benefits to the country. However, the unnecessary delays in bringing forward those plans, and the decision to bring disappointment to south Wales on St David’s day, are just further evidence of the dither and delay that seems to grip the right hon. Gentleman’s Department. Both of his announcements today imply more delay than the original plans. His third announcement on further electrification in Wales is another example of jam tomorrow but no money today, and no guarantee of progress. In the end, he will be judged on what he delivers, and Labour Members will be looking closely at that.

[Mr Hammond]

We have been treated to a classic rant. There are two types of people in this world: the glass-half-full brigade and the glass-half-empty brigade—and let us guess which one the hon. Lady belongs to. She is determined resolutely to find bad news even in a statement about massive investment at a time of constrained public spending.

The hon. Lady, apart from treating us to a read-out of her contacts book, which was fascinating, had the nerve to accuse us of unnecessary delays. I would like to remind her that it was the previous Administration who pulled the IEP procurement and asked Sir Andrew Foster to review it, reopening the issues. I can tell her today that trains will start to be delivered to the Great Western main line from 2016 and on to the east coast main line from 2018.

On the question of electrification, the hon. Lady mentioned the right hon. Member for Neath (Mr Hain), the man who talks a good talk about electrification but was, if I remember rightly, Secretary of State for Wales in the previous Administration—an Administration who, in 13 years, did not manage to electrify a single inch of railway in the Principality. A couple of weeks ago, the hon. Lady, who is now so keen on electrification in Wales, was telling us that Labour had no commitment to electrification in Wales because it was conducting a spending review and everything was up for grabs. That was until the very same right hon. Member for Neath came along and slapped her down, and made her change her tune.

The hon. Lady talked about our manifesto commitment at the last general election. I can tell her—[Interruption.] I have it right here; I will quote it back to her in a minute if she wants. Our manifesto commitment at the last general election was to electrify the railway into south Wales. I know that she is not shadow Secretary of State for Wales, but even she should know that Cardiff is in south Wales. We have delivered today on the commitment that we made.

The hon. Lady made a plea for electrification to Swansea. I understand that people in Swansea will be disappointed by the announcement that I have made today because of the expectations that the previous Government raised without bothering to establish that there was a sound business case for the proposed expenditure. However, she has not, at any point, made a logical argument for the electrification that she pleads for. I have told her that the bi-mode trains that we are procuring will deliver a journey time saving of 20 minutes to Swansea—the same journey time saving that the previous Government were promising through electrification. We will deliver the benefits to the people of Swansea from electrification to Cardiff and continuing bi-mode train operation onward from Cardiff to Swansea. She asked me about the electrification to Cardiff. That will be completed in 2017.

On the valleys electrification, the hon. Lady says that there is no funding in the spending review. I am disappointed that she has not yet grasped the complexities of rail capital funding. Network Rail funds electrification through its regulated asset base. The investment programme is set in control periods, the next of which starts in 2014. What I have announced today is that we have established that there is, on the face of it, a strong business case for this investment in the valleys electrification. We will work it up with Network Rail and the Welsh Assembly Government, with a view to including it in the next investment programme period.

Oral Answers to Questions

Debate between Maria Eagle and Lord Hammond of Runnymede

Thursday 27th January 2011 Commons Chamber

[Mr Hammond]

My right hon. Friend the Minister of State has published a consultation on franchising reform, in which she referred specifically to considering passenger satisfaction as one of the metrics. My hon. Friend will no doubt have been as delighted as I was to see the Passenger Focus survey this morning which shows that 84% of rail passengers are satisfied with the service that they receive on the railway.

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

I welcome the right hon. Gentleman’s decision to continue the rail industry review that was started by the Labour Government. When Sir Roy McNulty publishes his final report in April, the Opposition will support any sensible proposals that take cost out of the industry without reducing the quality of service for passengers. However, does the Transport Secretary agree with me—and with some Conservative Back Benchers, from what I heard in earlier exchanges—that as the cost to the Government of running the railways comes down, the cost to the public of travelling by train should come down as well?

[Mr Hammond]

I am grateful to the hon. Lady for her expression of support for Sir Roy McNulty’s review and I am happy to acknowledge that that process was set in train by my predecessor. I look forward to taking the review forward on a consensual basis. Of course, the objective of driving efficiency in the railway is to reduce the burden on both the taxpayer and the fare payer. I am glad that she recognises that the only realistic way to do that is to reduce the cost base.

[Maria Eagle]

In view of that, does the Secretary of State understand the anger felt by hard-pressed commuters up and down the country who are facing big fare hikes—record fare rises of over 30%—over the next three years, and often worse overcrowding on services that will not really improve over that period? The initial findings of Sir Roy’s review suggested that savings of £1 billion could be found without cutting services, so will the Secretary of State now commit to sharing the benefits of those savings with passengers, and rethink his plan to impose record fare rises?

[Mr Hammond]

Sir Roy McNulty’s suggestion that £1 billion a year could be found refers to 2017-18. It will take some time before we get to that level of achievement, but it must remain our aspiration. In the meantime, the hon. Lady has answered her own question. Overcrowding is a key issue, and if we are to address it we must continue to invest in additional rolling stock and infrastructure on our railways, as we have committed to do. I am afraid that means that the relief that passengers seek will not come in the next couple of years, although it will come.

Severe Winter Weather

Debate between Maria Eagle and Lord Hammond of Runnymede

Monday 20th December 2010 Commons Chamber

[The Secretary of State for Transport (Mr Philip Hammond)]

With permission, I would like to make a statement on the continuing severe winter weather. We are facing exceptional conditions. It looks set to be the coldest December since 1910 with average temperatures 4°C to 5°C below the norm for December. Many areas have had record low temperatures, and snowfall has been the most widespread since 1981. The forecast is for continued severe cold and further snowfall through the coming week and over Christmas and the new year.

Transport services have suffered extensive disruption in the past few days, and there is a likelihood, I am afraid, of further disruption through this week. I recognise that this is particularly stressful just a few days ahead of the Christmas break, and I understand the frustration of those who are trying to get away or, indeed, trying to get home.

Transport services were also disrupted in the first spell of winter weather that came unusually early, at the end of November. That period tested the systems which, in some case, had performed so very poorly earlier this year. The then Government asked David Quarmby, chairman of the RAC Foundation and a former chairman of the Strategic Rail Authority, to conduct a review of last winter’s resilience. His initial report was issued in July and a final report was published in October. It made 28 recommendations, some of them directed at central Government, some at local government, and some at transport operators. Many of those recommendations have already been implemented, although some will necessarily take longer.

On 2 December I asked David Quarmby, in the light of the weather conditions that we were then experiencing, to conduct an audit of the implementation of his recommendations and to make any further observations that he felt necessary. This is an independent report and I understand that David Quarmby intends to publish it tomorrow.

One of the principal recommendations of the first Quarmby report concerned salt—levels of stocks that local authorities should hold, dosage rates for optimum use of stocks and the acquisition of a strategic stockpile by central Government. Local authorities went into this period with significantly better salt stocks than last winter and the Highways Agency, on the Government’s behalf, had purchased 300,000 tonnes of salt to form a strategic stockpile, of which over 150,000 tonnes is already at UK ports, with the remainder scheduled for delivery through December and early January.

Over the past few days, highway authorities across England have been focused on delivering their planned salting and snow clearance to keep their local strategic road networks open. Together they had ready some 1.25 million tonnes of salt at the start of the winter. As hon. Members would expect, salt usage has been significantly above the norm for the time of year and so my Department decided two weeks ago to procure, as a precautionary measure, up to an additional 250,000 tonnes of salt, to replenish the strategic stockpile as salt from it is released to local authorities. Last Friday the Department for Transport offered 30,000 tonnes from the strategic stockpile to local authorities to provide reassurance over the holiday period. That allocation has been taken up and will be delivered over the next few days.

The strategic road network inevitably suffered severe disruption in the wake of heavy snowfall this weekend, but recovered reasonably rapidly and, with isolated exceptions, has operated effectively since Saturday afternoon. Similarly, heavy snow and the formation of ice at very low temperatures caused some disruption on rail networks on Friday and Saturday, but the rail industry has pulled together to keep essential services running, using special timetables where necessary, and I am pleased to report that commuter services into main conurbations this morning are close to normal. Transport for London has successfully followed its winter weather plans and has been able to run a near-normal service across its network. However, issues with Eurostar are ongoing and have been well reported today, including the impacts of very severe weather in northern France.

Disruption due to weather conditions of this extremity is inevitable, and the measure of resilience is the networks’ speed of recovery from such events. On that measure, the strategic road network and the rail network have performed broadly satisfactorily, in view of the exceptional circumstances. The experience at airports, and at Heathrow in particular, has however been different. Conditions have been difficult throughout north-west Europe, with Frankfurt, Charles de Gaulle and Schiphol airports all struggling to cope at times. This afternoon, just before I came into the Chamber, it was being reported that Brussels airport will close until Wednesday because it has run out of de-icer. But, yesterday’s whole-day virtual closure at Heathrow, coupled with continued substantially reduced capacity, presents a very real challenge from which the system will struggle to recover quickly.

I spoke this morning to BAA, the airport operator, and to British Airways, its principal user. I am clear that BA made the right call on Saturday to cancel its flights in anticipation of the airport’s closure. Had it not done so, the scenes of the terminals on Saturday night that we witnessed on our TV screens could have been much worse.

Heathrow operates, at normal times, at some 98% of full capacity, so when there is disruption caused by snow or by the need repeatedly to close runways or taxiways for de-icing, capacity is inevitably lost and a backlog builds up. There is still a large amount of work to be done to restore Heathrow to full capacity, and further snow and severe icing is anticipated over the next few days.

The immediate focus at Heathrow must therefore be on maximising the number of flights with the available infrastructure, and in order to do that I agreed with BAA this morning to a relaxation of restrictions on night flights for the next four days. Operating hours will be extended until 1 am, and arrivals for repatriation flights will be allowed through the night. None the less, BAA advises that, with further severe weather forecast, Heathrow is likely to be operating at reduced capacity until Christmas.

Conditions in the terminals overnight on Saturday were very difficult, with some 2,000 passengers stranded. Once the airport has returned to normal operation, my officials will work with BAA to understand how that situation arose and what it plans to change to ensure that we do not experience a repeat. It is clear from my discussions this morning that some preliminary conclusions have already been drawn.

We recognise that the cost, both economic and social, of this level of disruption can be great. Winters such as this year’s and last have been rare in modern Britain, but we need to consider whether we are now seeing in our weather a step change that might justify investment in equipment and technologies to reduce the impact of severe weather. I will assess advice on that subject from the Government’s chief scientific adviser, Professor Sir John Beddington, and we will work with transport operators to examine the business case in each sector for increased investment in winter resilience where that makes sense—recognising always that spending more on winter preparedness inevitably means that there will be less to spend on other priorities.

This is not just about making sure that people can travel and goods can be delivered. Disrupted transport links, combined with cold weather, increasingly impact on other essential services. In particular, they threaten the vulnerable in our communities. To help those most in need to stay warm in the coldest parts of the country, the Government have so far this winter paid out some £355 million in cold weather payments, through an estimated 14.2 million payments to affected households. In addition. winter fuel payments for pensioners have been protected at the higher rate for this winter, with 12.9 million payments made to those older people who meet the qualifying conditions. We have also taken precautionary steps to ensure that the health services are well prepared, with local plans in place to deal with the extra demands that this type of weather brings.

Despite those steps, weather of this severity can cause unexpected problems for many people, including those who would not normally consider themselves vulnerable, but who might be in serious difficulty if, for example, their boiler breaks down or they cannot get to the local chemist to collect their medication. With support from the Government, the Local Government Association will therefore work closely with local authorities in England to ensure that appropriate arrangements are in place across the country. Individual local authorities will publicise information locally on how to access those advice services ahead of the Christmas holiday period.

Severe weather poses significant challenges to the energy supply industry. Difficult driving conditions have affected fuel oil and coal suppliers’ ability to make deliveries, particularly to more remote areas away from the strategic road network. That has resulted in delivery backlogs, which suppliers have been working hard to reduce in difficult circumstances. Distributors are doing all they can to prioritise deliveries to vulnerable customers and to people who are running short of fuel. Working with the Government, the Federation of Petroleum Suppliers has issued a code of practice to its members to help them prioritise orders to those most in need and to alert local authorities when they are aware of a risk of potentially vulnerable households running short of heating oil.

The severe weather has also led to a very high forecast of demand for gas, which is expected to be more than 26% above the normal for this time of year. As a result, the National Grid issued a gas-balancing alert yesterday to provide a signal to the market to bring on additional supplies and to reduce demand from large users on interruptible contracts. There is no reason to expect any disruption to domestic customers, or to commercial customers unless they have interruptible contracts. My right hon. Friend the Secretary of State for Energy and Climate Change has today issued a written statement that provides more information on that issue.

Nationally, we will continue to do whatever is necessary to support essential services and provide advice to businesses and householders on steps they can take to help themselves and others. So, for example, we have published a snow code to give common-sense advice to householders and businesses to help them clear snow and ice safely from pavements and public spaces without fear of legal action. As an emergency measure, we have relaxed the enforcement of EU drivers’ hours and working-time rules to mitigate the effect of the severe weather on critical parts of the supply chain that have been badly hit by the weather. We published guidance for local highway authorities on the range of actions that can be taken to ensure optimum use of salt stocks, and over the next few days we will publish updated technical advice based on the latest research findings, so that all authorities can adopt best practice. We have also confirmed to farmers that they can use red diesel in tractors and other equipment to help salt and clear snow from public roads during extreme weather.

We are not yet through this period of extreme weather. My priority at the moment remains working with the transport industries to allow us to return to normal as fast as the continued freezing temperatures this week permit. I will also be working with ministerial colleagues and officials from other Departments, with whom I have been in contact daily since Friday, to continue monitoring the situation, assessing the risk of further disruption and taking whatever action is needed. Those arrangements will continue for as long as necessary through the holiday period. I can assure the House that wherever Government action can help to ease the impact of severe weather or mitigate its effects, we will not hesitate to take such action. I commend this statement to the House.

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

I thank the right hon. Gentleman for updating the House. After a weekend of chaos across the country, during which there have been severe transport problems on our roads, railways and runways, families struggling to get together for Christmas are furious that they have spent hours stuck in their cars at stations or airport terminals. What has really frustrated people has been the total lack of information available. They understand that things will go wrong when we experience such severe weather and no one—not even me—is suggesting that the Government can, or ought to be able to, control the weather. However, the Government should be able to control how prepared we are for that weather, and they can co-ordinate information so that those travelling can make and alter their plans accordingly.

Right from the first hit of severe weather at the start of this month, the right hon. Gentleman and his Department have seemed woefully ill-prepared for winter, despite the fact that the report on winter resilience that we ordered in government has been sitting on his desk since July. The 17 recommendations in the interim report and the 11 recommendations in the final report have clearly not been put into action with the urgency that they demanded. At the last Transport questions, he said that those recommendations had been implemented, yet in his statement he said that some of them will necessarily take longer. Well, which is it?

The reality is that Transport Ministers were caught off guard by the arrival of winter early this year, and failed to keep the country moving at a time when so many people need to travel to be with their family and friends. I am afraid that some of the right hon. Gentleman’s words today still sound complacent. Why was only 100,000 tonnes of salt for the roads in place at the start of the month, when the report said that 250,000 tonnes was needed? Can he confirm which local authorities currently have salt stocks below the new benchmark of 12 days’ worth of salt? What conversations has he had about services to deal with the abandoned cars and jack-knifed vehicles that have caused much of the delay? What steps has he considered to manage traffic flows better—for example, by not letting people join a motorway such as the M5 when it is already blocked, so that they will end up sitting in their cars not going anywhere? He said in his statement that the strategic routes have operated effectively since Saturday afternoon or evening: tell that to the people who were stuck for 13 and a half hours on the M40 trying to travel towards London.

On our railways, why does the update report that the Secretary of State has received in the past few days contradict the claim that the rail industry has sufficient equipment? Why are essential measures such as anti-icing capability on trains and new hot fluid distribution on to tracks not going to be in place until February, according to the most recent update—a little bit too late?

Does the Secretary of State accept that the most frustrating thing for passengers is lack of information? Why is it, therefore, that the new unified national real-time passenger transport information system to allow passengers to find out where their trains actually are, not what the timetable says, will not be in place until 2014? He said that the railways had kept essential services running and that commuter services were running well and close to normal, but people were stuck at Peterborough and King’s Cross last night with very little information about when the east coast main line was going to get back to normal.

The chaos that we have seen at our major airports is not only unacceptable but risks damaging our international reputation. It is just not good enough to pass this off as a private sector problem, as the Secretary of State did earlier. Passengers stuck at Heathrow and Gatwick for days on end have every right to feel abandoned by this Government. Other countries have kept planes flying and airports open, yet here passengers have been left on planes for hours on end without food and drink, and others have been forced to sleep on terminal floors with no blankets and poor information. The winter resilience report found that those in the aviation sector

“anticipate and manage the effects of severe winter weather to a very high standard of resilience”.

That is surprising given what we have seen in the past few days. Will he examine whether there has been any complacency among those at our airports? He referred to some preliminary conclusions following his conversations today, but he has not told us what they are. It might be useful to know.

Is it not the case that the chaos that we have seen has as much to do with this Government’s values as their competence? The Prime Minister’s close ally, the hon. Member for Grantham and Stamford (Nick Boles), gave the game away this weekend when he said:

“I mean, bluntly, there comes a question in life…Do you believe planning works…or do you believe it can’t work? I believe it can’t work, David Cameron believes it can’t, Nick Clegg believes it can’t. Chaos therefore in our vocabulary is a good thing.”

The right hon. Gentleman has obviously volunteered his Department to pilot this new approach to government and become the official Department for Chaos. He is doing quite well, actually. No wonder he has been dubbed the “No Transport Secretary” this morning.

People want competence from Ministers. They want good-quality information when disruption happens. They want co-ordination of recovery and mitigation across the entire system. They want help when they need it; they do not want to be left to fend for themselves as though there were no such thing as society. Will the right hon. Gentleman now learn the lessons of the past month and finally get a grip on the transport chaos that threatens to see Christmas cancelled for families up and down the country?

[Mr Philip Hammond]

After a heavy dump of snow, we have had a heavy dump of political opportunism from the hon. Lady. She talks of chaos, but does she remember the chaos last year when the Government of whom she was a member ran out of salt and had to stop gritting the roads because they had not bought enough of the stuff? They had not prepared at all. I will take no lectures from her on preparedness. Local authorities, the Highways Agency, rail operators and Network Rail have all entered this winter better prepared than they were last winter.

The hon. Lady talked about Quarmby’s interim report and final report, and the implementation of his recommendations. Of course action on some of the recommendations has not been completed yet—it requires capital investment and the procurement of new equipment, such as de-icing equipment for trains in the south-east. The first of that equipment has been delivered and fitted, and is undergoing proving trials. As soon as the proving is complete, the remaining 20 units will be rolled out. She cannot sit here with no plan, no suggestion and nothing constructive to offer, simply lobbing rocks from the sidelines, and expect to be treated seriously. As for our delivery on Quarmby’s recommendations, I suggest that she wait to see his report on the audit that he has carried out. He is their man, he was appointed by their Government, and he is now auditing our response to his recommendations. She should wait and see what he has to say before making such ridiculous points.

We were not caught off guard by the onset of winter, but we were caught off guard by the severity of the weather, as was everybody in this country. The hon. Lady asked about the recommendation that a strategic stockpile of 250,000 tonnes of salt be built. The Highways Agency has purchased 300,000 tonnes of salt, 156,000 tonnes of which has been delivered. The remainder is scheduled to be delivered over the next three weeks. If one is building a strategic stockpile, there is no need to replenish local authority stocks throughout the length of the winter, nor for every last ounce of it to be sitting in place on 30 November.

The hon. Lady asked how many local authorities are below the 12 days’ resilience level recommended by Quarmby. That threshold was recommended for the beginning of winter. Of course, many local authorities that were operating at or close to the threshold are now considerably below the 12 days’ resilience level, although some local authorities have much more substantial stocks. If they wish, local authorities will be resupplied from the strategic reserve that we have built. In turn, the strategic reserve will be replenished from the salt that we are currently sourcing from locations across the world, including south America, the middle east, India and Australia.

The hon. Lady asked about vehicles joining motorways. The police have powers to prevent vehicles from entering a motorway, if they deem it appropriate to do so.

The hon. Lady also mentioned the situation at the airports, and I am happy to agree that what has happened at Heathrow airport is not acceptable. We have to work with the airport operators and the airlines to work out how to avoid such situations. I can give her further clarification on the early conclusions that have been shared with me by the airport operator. It recognises that it was a mistake to continue trying to operate the schedules that it was using on Saturday, and that it should have made a decision earlier to cut severely the number of flights departing and arriving, so that the airport would not be congested with aircraft when the snow came in. That is the kind of practical lesson learning that must be done. We will work with the airport operators to ensure that next time such lessons are learned and implemented.

Finally, the hon. Lady had the audacity to ask why the rail equipment that Quarmby recommended in his October report is not in place and operating. The answer is clear: Labour did not order it when it was in government. We have ordered it, but it does not appear by magic, simply by snapping your fingers; these things have a lead time and must be done properly. The equipment will be in place by the end of the winter, and it will make our railways operate more effectively.

High Speed Rail

Debate between Maria Eagle and Lord Hammond of Runnymede

Monday 20th December 2010 Commons Chamber

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

I thank the Secretary of State for early sight of his statement. Today, he is facing a rising tide of criticism over the transport chaos gripping the country, so it is unlucky that he is scheduled to update the House on high-speed travel on a day when most people would settle for travel at any speed at all. As he knows, it was Labour in government which set out a vision for a high-speed rail line running from London to Birmingham from 2026, and on to Leeds, Manchester and Scotland in phases during the following years. I pay tribute to the tenacity and determination of his predecessor, the noble Lord Adonis, whose exhaustive work on the scheme has allowed the right hon. Gentleman to pick up and run with the vision he has set out today for high-speed rail.

I recognise the importance of increasing rail capacity and connectivity, particularly in respect of the west coast main line and the Chiltern line beyond 2020. I assure the Secretary of State that Labour remains committed to investing in a world-class rail system, and that high-speed rail could have an important role to play in delivering it. That is why we began the planning process when in government—in fact, I suspect that his proposals probably have more support on the Labour Benches than on the Benches behind him. He is the one sitting in a divided Government, although for once the divisions do not involve the Liberal Democrats. No doubt, he will find out in due course whether he has done enough today to persuade the Secretary of State for Wales, who is in her place, not to resign in protest at his plans.

We have just embarked on a fundamental review of our policies, just as the Conservatives did after the Prime Minister became leader of his party—and just like the leader of the Liberal Democrats, who appears to have looked again at all his party’s policies since joining the Government. It would be ridiculous for our future support for high-speed rail not to be at the heart of that review—and it will be at the heart of it—given that it is a £30 billion commitment on future Parliaments. In the meantime, however, the Secretary of State has the support of Labour Members as he moves forward with the next stage of planning the route he has set out today.

It would be good if the Secretary of State were to show the same determination and commitment to other critical investment in our rail industry—investment needed now, not in future Parliaments. He has cut and delayed the vital investment we had planned for this Parliament; he has delayed the new generation of inter-city express trains and cut our plans for 1,300 new carriages; he has delayed much of the electrification that we planned and cut Great Western line electrification beyond Bristol and into Wales; and he has delayed the Thameslink and Crossrail schemes, which will not now benefit passengers until 2018—or is it now 2019? It keeps slipping.

We have set out an additional £7.5 billion of capital investment from which significant sums would have been invested in our rail networks in this Parliament. Does the Secretary of State realise that because he has cut so much spending in this Parliament while post-dating a £30 billion cheque for a high-speed rail scheme, the cost of which will fall in future Parliaments, people may well be sceptical about the extent of his commitment to Britain’s railways today? Does he understand how he puts at risk public support for future investment such as high-speed rail, given that he cannot even get the investment to keep our trains and other transport infrastructure running during severe weather?

Does the Secretary of State also understand the anger that will be felt in communities across the country when people hear him claim that his support for high-speed rail is due to concern about the north-south divide in Britain? His party’s support for high-speed rail is a fig leaf to disguise the fact that it has no strategy for investment, jobs or growth in the north. If he were really bothered about the north-south divide, he would not be supporting the scrapping of the regional development agencies, the future jobs fund and the education maintenance allowance, or the trebling of student fees, the delaying of broadband roll-out or the increase in VAT to 20%—another broken promise from both the Conservatives and the Liberal Democrats. If he were really bothered about the north-south divide, he would not be loading the largest cuts on to councils in the midlands and the north. If he were really bothered about transport links beyond the south, why is it that authorities in the north are facing the biggest cuts in their road maintenance and local travel projects, with Merseyside facing cuts of 49% and Manchester cuts of 42%, while midlands and southern counties are doing much better?

Let me ask the Secretary of State some specific questions about the scheme that he has announced today. What impact will the changes to the route, the additional compensation and hardship payments, and the other commitments that he has made today have on the £750 million that he has allocated in this spending period? Can he offer an assurance that that will not have a knock-on effect on other rail schemes already facing cuts and delays, and that it will not set a precedent for compensation in other cases where infrastructure is driven through people’s homes and businesses? He has previously referred to the construction costs for major projects in the UK being significantly higher than for comparable projects elsewhere in Europe. What progress has he made, working with Infrastructure UK, to find ways of bringing down the cost of the scheme to the taxpayer?

Will the Secretary of State confirm whether the cost of the trains to run on the high-speed line has been included in the figures used for the cost of the scheme; or, as with other schemes, such as Crossrail, do they constitute separate expenditure yet to be identified? One of the things missing from the debate on high-speed rail to date has been the likely cost of using the service. Does he agree that if all taxpayers are to contribute so significantly to the cost of constructing the route, it cannot be a service with ticket prices outside the grasp of most people? Does he agree that many people will question his commitment to take the line beyond Birmingham, when he is restricting his proposed legislation to the first part of the route? Why is he not taking powers in the hybrid Bill to build the line to the north of Birmingham?

The Secretary of State’s party has no credibility when it comes to investing in our railways. We remember the 18 years of Tory under-investment in Britain’s railways, and the botched privatisation, which resulted in years of instability and uncertainty. It was Labour that delivered years of sustained investment, leading to a doubling of passenger numbers. He is right to continue the work, which Labour began, to prepare for high-speed rail in the UK. However, we must also see investment in rail schemes that will benefit the country and assist growth and economic recovery now, not just in 15 to 20 years’ time. We must see investment in technology to improve the resilience of the network to severe weather, and we must see passengers protected from the spiralling cost of fares. If the Secretary of State is really serious about maintaining a consensus on high-speed rail and building public support for his plans, he should think again about some of the decisions that he has taken in his first few months in the job. He should think again about cuts to new carriages, the delays to electrification and the massive hike in fares.

[Mr Hammond]

I will start with the good bits. I thank the hon. Lady for what I think was her support for the next stage of the process—going through the consultation and introducing a Bill later in this Parliament, if that is what we decide as a result of the consultation. I am also happy to pay tribute, as she did, to the work of my immediate predecessor in developing the case for high-speed rail, although it is worth noting that not all his predecessors seemed to have been quite so committed to the project.

I am afraid that it is the hon. Lady who lacks credibility, in talking about our failure to invest in the railway. She can talk about a decade of Labour investment as much as she likes. What most people will have noticed is a decade of driving us towards the brink of bankruptcy. What we have done is salvage a substantial programme of investment in rail infrastructure—a programme the scale of which neither she nor many commentators outside this place predicted we would be able to continue with—in the context of the extreme fiscal constraints that we face. We have gone ahead with Crossrail and Thameslink, and with a programme of additional rail vehicles—gone ahead with, not merely announced unfunded promises, which is her legacy. We will go ahead with the inter-city express programme, as I have already announced. We will announce to Parliament the details of that programme, along with the electrification associated with it, in the new year. The hon. Lady can go on all she likes about proposing £17 billion of additional investment. Her party has no economic plan, no policies and no credibility.

Turning to the specifics of the hon. Lady’s response, the high-speed rail investment that we are proposing will be approximately £2 billion a year over a period of 16 years. That is roughly what we are spending now on Thameslink and Crossrail, so large infrastructure projects can be funded while the investment in the mainstream main line railway is funded as it is now.

The hon. Lady asked about our commitment to high speed rail as a means of addressing the north-south divide, and she reeled off a string of tried and failed mechanisms for addressing that persistent problem. We have decided to take a new approach to closing the gap between economic growth rates in the north and south, and the experience of other countries suggests that investment in strategic infrastructure is the best way to deliver that outcome.

The hon. Lady asked whether the change of route and the exceptional hardship scheme will impact on the £750 million that has been set aside for HS 2 during this Parliament, and the answer to that is no. She also asked whether there would be an impact on other rail schemes’ budgets, and the answer is again no. The HS 2 budget is ring-fenced; other rail schemes are typically funded through Network Rail and through support to train operators.

The hon. Lady asked about the compensation scheme. I have indicated that we will seek to go further than has happened with previous such infrastructure schemes in the UK, because it is right and proper that individuals who suffer serious financial loss in the national interest should be compensated. She also asked whether we will be setting a precedent in that regard. She should be aware that developing European jurisprudence in the area of property rights and the need for Governments to compensate is pointing towards more generous compensation becoming the norm, and I suspect that that will be the case for future projects.

On construction costs, yes, we are of course anxious to get such costs down to something closer to European norms. The hon. Lady will know that Sir Roy McNulty is carrying out a review, one element of which relates to the cost of UK rail construction, and Infrastructure UK is also engaged in that issue. A report will be published in April. She asked whether the cost of the trains is included in the total figure, and I can confirm that it is.

The hon. Lady also asked about the assumption with regard to ticketing and to the prices of tickets. I can tell her that the business case modelling assumes the same ticket pricing structures as those that are now in place on the west coast main line. In practice, however, the west coast main line and High Speed 2 will be in competition with each other. The operator of High Speed 2 will have a very large number of seats to fill, and we anticipate that the processes of competition in the marketplace will create opportunities for passengers who are prepared to buy advance tickets and to shop on the internet to get bargains for travel between London, the midlands and the north.

Finally, the hon. Lady asked about the strength of our commitment to going beyond Birmingham. With respect, when her party was in government, its position was always focused on a line from London to Birmingham. It was us who took the debate beyond Birmingham and made the case for Manchester and Leeds. Indeed, the business case for this railway, for the connection to Heathrow airport and for the connection to HS 1 depends on a railway that forms a complete network linking Britain’s four principal population centres, so I can assure her of that commitment.

I put it to the hon. Lady, however, that if we had sought to carry out the detailed work required for a hybrid Bill that covered the entire route, including the legs to Manchester and Leeds, it is unlikely that we would have been able to introduce such a Bill until the end of this Parliament. Our decision was therefore to introduce a hybrid Bill to deal with the London to Birmingham section—which is already a massive undertaking—in 2013, and that, while that Bill is going through Parliament, we should continue our detailed work on the legs to Manchester and Leeds, so that they can be included in a further hybrid Bill in the next Parliament.

Winter Weather

Debate between Maria Eagle and Lord Hammond of Runnymede

Thursday 2nd December 2010 Commons Chamber

[Mr Hammond]

Most of the strategic road network across the country has been kept open, and most of it is open today. Some strategic roads have been closed, particularly on higher ground, either because of exceptionally heavy and drifting snow or because they have been blocked by accidents or abandoned vehicles. Individual decisions will have been made by the Highways Agency or, in some cases, by the police. I will write to my hon. Friend and tell him precisely the reason for the A5 closure.

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

I am afraid that the Secretary of State is demonstrating a remarkable—indeed, breathtaking—degree of complacency. Unfortunately, he is not filling the House with any confidence that he is dealing with his responsibilities adequately. He may recall that, on the publication of the interim report on winter resilience in July, he said:

“For two winters in a row, severe weather has caused significant disruption for transport in this country. The cost to the economy and the disruption to the public has been significant, and there has been a level of dissatisfaction and confusion about the response by Government at both local and national level. This is unacceptable and must be resolved before the next winter season.”—[Official Report, 26 July 2010; Vol. 514, c. 72WS.]

Is he really arguing that it has now been resolved?

Earlier today, during Transport questions, the Secretary of State said not only that the final and interim reports on winter resilience had been studied and not only that action had been taken—which he has just said again—but that the reports’ recommendations had been implemented. He appeared to row back from that statement in his response to the urgent question. Will he make clear in what way the 17 recommendations in the interim report and the 11 further recommendations in the final report have been implemented? Has the salt cell been activated, and, if not, can he tell us why not? Have the 250,000 tonnes of salt actually been stockpiled? The Secretary of State said that the salt had been ordered, and then said that there were 100,000 tonnes in the stockpile. The report which he told us earlier had been implemented called for a stockpile of 250,000 tonnes. Can he make the position a bit clearer?

This winter weather was forecast well in advance. It is not as if it suddenly came on us. The Met Office gave us plenty of warning. Does the Secretary of State believe that a grit audit is an adequate response from the Government to the current suffering of motorists forced to sleep freezing in their cars, of train passengers dropped off at stations with no way of being rescued, and of half the population who struggled to get to work and had to turn up late yesterday? Does he believe that the complacent attitude that he has demonstrated today is anywhere near good enough from people who purport to be the Government of this nation?

Oral Answers to Questions

Debate between Maria Eagle and Lord Hammond of Runnymede

Thursday 2nd December 2010 Commons Chamber

[Mr Hammond]

We have no plans to review the rule.

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

Local transport and the bus service, in particular, is essential for many people, and of course it needs to be sustainable, but does the Secretary of State agree that cuts of 20% to the bus service operators grant will not only lead to fewer bus services and higher fares, but push people back into their cars and, therefore, do nothing for sustainability?

[Mr Hammond]

No, I do not. The hon. Lady will recall that prior to the spending review there was a great deal of speculation that the bus service operators grant would be abolished altogether, and the bus service operators warned of significant fare increases and cuts to services if that were to happen. I am pleased to say that we were able to achieve a cut of only 20% in the BSOG, and the operators indicate to us that that should not lead to a loss of services or to significant fare increases.

--- Later in debate ---

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

The winter resilience review commissioned by the previous Government has produced its final report and recommendations, yet the country is in chaos, with passengers forced to sleep at stations, freezing all night on broken-down trains or getting trapped in their cars, all at a cost to the economy of up to £1.2 billion a day. Why are not the findings of the review being implemented? The public do not want the Secretary of State to announce another review by the person who has already set out the blueprint for improvements. They want him to get on and implement the recommendations and improvements. When is the Secretary of State going to get a grip?

[Mr Hammond]

First of all, the hon. Lady fails to recognise the scale of the weather event that is occurring. It involves a significantly bigger snowfall than the one that occurred earlier this year, which gave rise to the events that caused my predecessor to commission the review. The findings and recommendations of the review have been implemented, and I have asked David Quarmby to come back and audit their implementation so that we can see the extent to which they have been consistently implemented and whether there are any lessons that we can learn from the last few days. I hope that the hon. Lady will support that approach.

Rail Investment

Debate between Maria Eagle and Lord Hammond of Runnymede

Thursday 25th November 2010 Commons Chamber

[The Secretary of State for Transport (Mr Philip Hammond)]

With permission, Mr Speaker, I should like to make a statement on the Government’s plans for investment in rail infrastructure and rolling stock.

These plans build on the announcement by my right hon. Friend the Chancellor of the Exchequer of the outcome of the spending review. As we have consistently said, tackling the deficit is our top priority, and by taking the tough decisions on current spending we are able to secure our future growth by making vital infrastructure investments. Over the next four years, we will provide £14 billion of funding to Network Rail to support capital maintenance and infrastructure investment, and £750 million for high-speed rail. We will also fund the Crossrail project, the tube upgrade programme and light rail projects in Birmingham, Tyneside, Nottingham and Sheffield, and provide additional funding to franchisees for extra rolling stock.

I can also confirm today that we will fund and deliver the Thameslink programme in its entirety, virtually doubling the number of north-south trains running through central London at peak times. This huge investment will link Sussex, Kent and Surrey, through central London, with Hertfordshire, Bedfordshire and Cambridgeshire. But the original programme for the rebuilding of London Bridge station to increase through-running as part of this project was always ambitious, with substantial risks in respect of delivery and operation of existing services during construction. To reduce these risks, we have re-profiled the delivery of the programme to achieve completion in 2018. This will enable Network Rail to make the further efficiencies in the design and delivery of the programme that we require to ensure value for money. Passengers will start to benefit from incremental improvements on the Thameslink routes from the end of 2011. As part of the Thameslink programme, we will procure a new fleet of trains—up to 1,200 new carriages. That is in addition to about 600 new carriages that will be provided for the Crossrail project.

Together with the tube upgrades, these projects represent a step change in rail capacity in London, providing a significant boost to economic growth potential in the capital. New Thameslink and Crossrail rolling stock will enable the redeployment of hundreds of serviceable electric carriages currently used on Thameslink services. These carriages belong to rolling stock leasing companies, but we expect they will be available at competitive leasing prices for re-use elsewhere, thus justifying further electrification of our network.

As a first step, I can announce today that Network Rail will electrify the commuter services on the great western main line from London to Didcot, Oxford and Newbury over the next six years. Electric trains will speed up journeys, improve reliability and reduce the impact on the environment on these busy routes.

The Chancellor also announced on 20 October the electrification of the lines between Liverpool, Manchester, Preston and Blackpool, representing an investment of up to £300 million. I expect work in the north-west to begin next year and to be completed at about the same time as work on the Thames valley commuter lines, in 2016. Some sections will be completed well ahead of this, notably Manchester to Newton-le-Willows in late-2013, allowing new electric trains to operate from Manchester to Scotland. As with Thameslink, we will require Network Rail to keep a tight rein on costs. The redeployment of electric rolling stock to these routes will, in turn, free up hundreds of diesel units, which will be available to train operators to lease as they become available in the period after 2015.

This will all be welcome news to passengers. The Public Accounts Committee recently found that many services are unacceptably overcrowded, and I understand the frustrations of rail travellers who have to travel on packed trains. More investment is clearly needed. That is why I argued for additional rail investment in the spending review, and it is also why I have taken the difficult decision to allow regulated fares to rise by 3% above inflation for the three years from 2012, to help us pay for these investments.

In January 2008, the previous Government published a plan to bring 1,300 additional carriages into service by March 2014. That plan was never deliverable. In total, only 206 of the 1,300 carriages had entered service by May this year. My predecessors quoted a grand total of rail carriages, but never referred publicly to the fact that delivery of that total was subject to so many caveats and qualifications as to render it effectively meaningless. According to their published plan, the 1,300 was not fixed and subject to

“value for money, affordability…linkages with other interventions or with other rail projects…infrastructure constraints…supply chain constraints”

and “credibility”. The document went on to say that

“the final outcome could well be different”.

In other words, it was not so much a plan as a press release.

So let me set the record straight. I can today confirm that an additional 650 carriages will have been delivered to the network between 6 May 2010 and March 2014. That is in addition to the Thameslink and Crossrail carriages I have already mentioned.

But it is not just about rolling stock. Network Rail has already started work on station improvements, with funding confirmed for developments at Reading, Birmingham, London King’s Cross and Gatwick airport. Investments on the east coast main line and midland main line and improvements in Yorkshire, on trans-Pennine routes, around Manchester and in south Wales will improve line speed, reliability and capacity of services.

Beyond these investments, there are far-reaching decisions to be made about inter-city services. In February 2009 the intercity express programme, launched by the previous Government, identified the Agility Trains consortium as preferred bidder to build a new fleet of inter-city trains. Then, this February, my predecessor invited Sir Andrew Foster, former head of the Audit Commission, to provide an independent assessment of the programme. Sir Andrew presented his report to me at the end of June, recommending further work on the Agility Trains proposal and a detailed study of the alternatives. I can now tell the House that we have narrowed down the options, from the four Sir Andrew identified to two. I have ruled out the option of requiring passengers to change from electric to diesel trains at a point in their journeys, recognising the value to passengers of preserving through-journeys. I have also ruled out the option of a wholesale refurbishment of the existing diesel InterCity 125 fleet, some of which dates back to the 1970s.

The remaining options are, on the one hand, a revised, lower cost proposal from Agility Trains envisaging a mixed fleet of some all-electric trains and some electric trains equipped with under-floor diesel generators, and on the other hand, a fleet of new all-electric trains which could be coupled to new diesel locomotives where the overhead electric power lines end. Both of these options would allow us to preserve through-journeys between London and parts of the rail network which are not electrified. Both of them would deliver faster journey times too. For example, we expect to see time savings of at least 15 minutes for the journey between Cardiff and London, bringing it below 2 hours. This is a major decision that will affect inter-city rail travel for decades to come, and we must get it right.

To address the outstanding issues on choice of train type and further electrification on the great western main line, additional work will be required within the Department, with Agility Trains, and with the Welsh Assembly Government on the business case for electrification into Wales. When this work, and discussions with the Welsh Assembly Government and my right hon. Friend the Secretary of State for Wales, has concluded, I expect to announce a final decision on the IEP and on further great western electrification in the new year.

The package I have confirmed today has been possible only because this Government have been prepared to take the tough decisions to protect investment in Britain’s future. This is a commitment to our railways that will benefit Britain for generations to come, and I commend the statement to the House.

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

I thank the right hon. Gentleman for early sight of his much-delayed statement. We first read the details of the statement in the Sunday papers three weeks ago, we read them again two weeks ago and we saw much more detail in the press this morning. I know that he tabled this statement as a written ministerial statement today so that he could get away with spinning it on the “Today” programme, but his whole handling of this announcement is an insult to this House, which should be the first to hear about major Government policy decisions, not the last.

Despite all the spin and the re-announcing of decisions taken by the previous Government, many passengers will be bitterly disappointed by the right hon. Gentleman’s announcement today, because it amounts to delaying investment but bringing forward massive fare hikes. The real losers of today’s statement are commuters, who already suffer some of the highest fares in Europe and the worst overcrowding. Because of the cuts he has had to make to his budget, their fares will rise by 3% above inflation from next year and they now face waits of up to a decade for the new trains that will ease overcrowding and speed up journeys.

The statement delays the completion of Thameslink by two years to 2018, following the right hon. Gentleman’s previous decision to delay the completion of Crossrail by a year. His Department is already missing its targets for extra spaces by 15% at peak time in London and 33% in other major cities. Does he not understand the frustration there will be at his decision to delay the delivery of the new carriages that are vital to addressing this overcrowding?

On new carriages, the right hon. Gentleman tries to claim that the plans that Labour announced in government for 1,300 carriages were somehow a work of fiction. Perhaps I could remind him that his permanent secretary told the Public Accounts Committee in September that

“it was a commitment of the previous Government to deliver 1,300 carriages, for which they had a £1.2 billion budget.”

He made it clear that

“we had plans—clear plans—that we could evidence to the National Audit Office…to have acquired around 950 carriages and spent around £900 million.”

He also said that he had plans in place that

“would enable us to get to probably around 1,300 carriages and to develop the full capacity, using the full budget of £1.2 billion.”

Will the right hon. Gentleman now accept that he has cut the number of new carriages that we planned to be delivered in this spending review period, and that he must stop spinning? Why are commuters going to face overcrowding, which will not be substantially alleviated for almost 10 years, when the fares hikes that he says are to end overcrowding start this January?

People in Wales will feel most betrayed by the right hon. Gentleman’s announcement, following his decision to delay giving the green light to electrification of the great western line beyond Bristol. His manifesto was very clear on this, so let me remind him that it said:

“We support…the electrification of the Great Western line to South Wales.”

Perhaps no Welsh MP was in the room during the coalition negotiations, because that commitment was subsequently downgraded to a general statement of support for

“further electrification of the rail network.”

Today, we see why: it was because there was clearly never a commitment to Wales.

We are told that the Secretary of State for Wales is threatening to resign if high-speed rail goes through her English constituency. She does not seem to be threatening to resign over the fact that Wales, whose interests she represents in the Cabinet and is supposed to champion, is to remain the only European country other than Albania and Moldova with not a single metre of electrified track. Will the right hon. Gentleman reconsider his decision not to approve the electrification of the great western main line to Swansea, as was planned by the previous Labour Government?

The right hon. Gentleman has also today ducked giving the green light to the intercity express programme. We are used to this Government going back on things they promised to do in their manifesto, but today’s statement sees him going back even on what he promised in his Department’s comprehensive spending review statement this October. I remind him that he said:

“Because aspects of Thameslink and HLOS rolling stock programmes, as well as projects to electrify the Great Western Mainline, and the rail routes around Manchester and Liverpool, are interdependent with the IEP decision, a full announcement on all these programmes will be made at the same time.”

Will he tell the House what has changed? Will he now tell us the real story behind the repeated delays to today’s statement and the real reason he has had to push so many of his decisions into next year? Is it true, as some believe, that by changing the specification of the IEP carriages after a preferred bidder was announced he now risks a legal challenge from other bidders?

Finally, does the right hon. Gentleman understand the anger felt by passengers up and down the country at his decision to allow rail fares to rise by such a large amount? His coalition agreement said:

“We are committed to fair pricing for rail travel”.

Can he tell hard-pressed commuters up and down the country why he thinks that allowing rail fares to rise by 3% above inflation after next year demonstrates his commitment to fair pricing? How does driving people off the railways and back into their cars help either our economy or the environment? Does he accept, as his Department has admitted, the very big impact on road congestion that is likely to be caused by his decision?

Is not the reality that he has come to the House today only because he said in his departmental plan that he would do so by the end of November 2010 and because his repeated briefings to the media have created an expectation that a statement was imminent? Does he not accept that his departmental plan commits him not to a statement, but to decisions? Has he today not just missed the first of his own targets in the departmental plan, which was supposed to be the Prime Minister’s way of keeping Secretaries of State on track to deliver Government promises?

Is not the reality of today’s statement that beyond re-announcing a whole series of investment decisions taken by the previous Labour Government and put on hold by him after the election, he has delayed the completion of Crossrail by a year, delayed the completion of Thameslink by two years to 2018, delayed giving the green light to electrification of the great western line beyond Bristol—that is a real betrayal of people in Wales—delayed giving any indication of when electrification of the midland main line will take place and delayed giving the green light to the intercity express programme? His statement pushes the delivery of projects into the next spending review period and ducks decisions on some of the country’s most vital transport infrastructure projects. His delayed statement is itself nothing more than one long series of delays.

[Mr Hammond]

In her second response to me at the Dispatch Box, the hon. Lady adopts a rather churlish tone. She talks about wanting decisions to be made. She will get decisions from this Government, but they will be properly thought through decisions based on value-for-money cases and proper consideration of all the matters that need to be dealt with; they will not be press releases made up on the spur of the moment by a Government who have gone on a regional junket and need something to announce to keep the regional press happy.

The hon. Lady complains that we issued a written ministerial statement this morning, but she ought to be able to understand that the content of this statement, because it touches, in particular, on the procurement of the intercity express programme, is market sensitive, so it was essential that we made a statement this morning before the markets opened.

The hon. Lady talks about fares, and I readily acknowledge that nobody in the commuter fraternity will welcome the increase in the cap on regulated fares that we have proposed for 2012 to 2015. But that is one of the tough decisions that we have had to take to protect the programme of investment in our railways. I have to say to her that I see no sign that anybody on the Opposition Front Bench is prepared to take tough decisions or to understand that without the ability and the willingness to do so they will simply have no credibility in the difficult debates on how we prioritise limited public expenditure.

The hon. Lady criticises the delay in delivering the complete Thameslink project—the 24 trains an hour in both directions. I do not apologise to her or to the House for taking a decision that the programme, as originally set out, contained too many risks—there were risks of cost overruns and risks to existing commuter services into London Bridge station. With Network Rail, we have revised the schedule to create a lower-risk alternative that is both less costly and less disruptive to existing commuter services.

The hon. Lady talks about the midland main line—she seems to have discovered it this morning. There was not a word about the electrification of the midland main line during the 13 years for which the Opposition were in government, but today she wants to bring it up as though it were some Labour priority we are abandoning. For the record, the case for electrification of the midland main line remains strong and we will consider it as a project for control period 5, which begins in 2014.

The hon. Lady attacks me for describing the 1,300 rail carriages to which her predecessors apparently committed as a work of fiction. She is new to the job, I understand, and these are difficult numbers—[Interruption.] I am quite new to this, too, and I can tell the House that they are difficult numbers. If she drills down and has a look, she will see that the figure of 1,300 was maintained early this year only by the inclusion of 400 of the 1,200 Thameslink carriages in the total—a complete and ongoing fabrication to avoid abandoning a number that was never sustainable. The Opposition could not have delivered them because they are not prepared to support any of the decisions that have allowed capital investment to continue. They do not support the fare increase, they do not support cuts in welfare expenditure and they do not support cuts in public expenditure to allow prioritisation of capital investment.

The hon. Lady has the audacity to raise the issue of Wales, but, as she says, Wales has not one metre of electrified railway—after 13 years of a Labour Government. We will take no lectures from her on electrification in Wales.

Oral Answers to Questions

Debate between Maria Eagle and Lord Hammond of Runnymede

Thursday 28th October 2010 Commons Chamber

[Mr Hammond]

As I said in my opening remarks, we have a problem with the cost base of our railway and in the medium term there is no doubt that the challenge for us is to get that cost base under control, so that we can ease the pressure on passengers and at the same time ease the pressure on taxpayers. However, in the short term, the decision that had to be taken was simple: do we go ahead with investment in additional rail vehicles to ease overcrowding and improve the passenger experience or do we not? We have taken the decision that investing for the long term is the right answer for the United Kingdom economy.

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

It is good to be facing the right hon. Gentleman across the Dispatch Box for our first Transport questions. He again spent the last week all over the media, from “Newsnight” to “The Daily Politics”, pretending to be Chief Secretary to the Treasury, so I apologise to him for dragging him back to his day job. Why did he tell The Times that fares would rise by 10% over the spending review period when commuters are actually facing a hike in fares of 30% plus?

[Mr Hammond]

I welcome the hon. Lady to her place. Perhaps I cannot tell her and her sister apart and that is why I was responding to the shadow Chief Secretary earlier this week. She refers to a quote. On my arithmetic, RPI plus 3% for the last three years of the spending review period, with RPI plus 1% for next year equates to a 10% real-terms increase in the regulated average fare over the period of the spending review.

[Maria Eagle]

I have the quote in front of me. The right hon. Gentleman used a figure. He said this; it is in quotation marks, so he can tell me if he was wrongly quoted:

“If you are paying £1,000 for your season ticket now, it could cost you £1,100 at the end of the period”.

That is not saying that it is a real-terms increase of 10%. That is saying that it is an increase of 10% in total. His Government's own Office for Budget Responsibility predicts inflation of at least 3.2% from 2012. That will mean a rise of at least 6.2% a year, meaning that by 2014, fares will rise by over 30%. I would have expected better standards of arithmetic from someone who would rather be in the Treasury.

Let me try the right hon. Gentleman on another question. Why has he scrapped the cap on individual fares that we introduced? Does he understand that that will mean many fares rising by more than the 3% above inflation that he has allowed? Therefore, for the sake of hard-pressed rail users, who are already struggling thanks to other measures that the Government are taking, will he now abandon that stealth tax on commuters?

--- Later in debate ---

[Maria Eagle]

It’s a stealth tax.

[Mr Hammond]

It is not a stealth tax because companies are only allowed to increase regulated fares by a weighted average of 1% above RPI in the coming year across all the regulated fare pool.

Transport (Investment)

Debate between Maria Eagle and Lord Hammond of Runnymede

Tuesday 26th October 2010 Commons Chamber

[The Secretary of State for Transport (Mr Philip Hammond)]

With your permission, Madam Deputy Speaker, I would like to make a statement on the Government’s investment plans for our transport networks. During the course of my remarks, hon. Members might find it helpful to refer to the documents that I placed in the Library of the House and the Vote Office a few minutes ago.

As my right hon. Friend the Chancellor explained last week, the decisions that we have taken to cut waste, end lower-priority programmes and reform the welfare system allow us to invest in Britain’s long-term economic growth and to prioritise transport infrastructure to support that growth. We have already announced a green light for Crossrail and for tube upgrades, plans for investment in low-carbon vehicles and recharging infrastructure, and work on a high-speed rail network. Work is continuing on the evaluation of additional investment in major rail projects, and I expect to be able to make an announcement to the House on that in the next few weeks.

Today, I can confirm a programme of investment in our crucial strategic road network, managed by the Highways Agency, and in our local transport networks. We will continue to invest in capital maintenance, spending £5.9 billion over the next four years on unglamorous but important works to maintain the integrity of the network, both strategic and local.

We have also allocated more than £180 million over the four-year period for high-value minor enhancements to the strategic road network. We are taking action to reduce the cost of proposed Highways Agency schemes by re-specifying, renegotiating with suppliers and improving governance and control. Thanks to those decisions, I can confirm that funds will be available for sustainable upgrades to the strategic network to tackle congestion hotspots, delivering network-wide benefits that provide very high returns on investment.

I can confirm today that the eight Highways Agency major schemes currently under way will be funded to completion and open to the public in the next two years. I can also announce today funding for 14 new projects, including the schemes announced by my right hon. Friend the Chancellor last week, to commence on site by April 2015. These are: the A11 Fiveways dualling; the M4 and M5 junction north of Bristol; the M6 between junctions 5 and 8 in Birmingham; the M62 between junctions 25 and 30 near Leeds; three schemes on the M1 between Derbyshire and Wakefield from junctions 28 to 31, 32 to 35A and 39 to 42; four schemes around Manchester from junctions 8 to 12 and from 12 to 15 on the M60; junctions 18 to 20 on the M62 and from Knutsford to Bowdon on the A556; improvement of the A23 between Handcross and Warninglid; the completion of the upgrading of the M25 with a managed motorway scheme for peak time hard-shoulder running between junctions 23 and 27 and between junctions 5 and 7. Those essential investments will cut congestion, improve journey times and, most importantly, support economic growth. Every pound we spend on these schemes will generate on average £6 of benefits.

I can also confirm that work will continue on developing a further set of Highways Agency schemes ready to start in the next spending review period if funds become available. A detailed list is included in the documents I referred to earlier. There is also one last group of four current Highways Agency schemes that will be reviewed to see if they still represent value for money and can be progressed for the next spending review period.

Important as strategic roads are to the national economy, many of the highest value-for-money proposals are those that address the needs of the local road and public transport infrastructure that supports the economies of our cities, towns and rural areas. That is why, last week, we announced our commitment to completing major local projects worth more than £600 million—including measures to improve access to Weymouth in time for the Olympics and acceleration of work on the Tees Valley bus network, and, I can confirm, the intention to invest up to £350 million to complete the upgrade of the Tyne and Wear metro.

We have also announced our intention to proceed with private finance initiative schemes to extend the Nottingham tram network and deliver sustained improvements in highways maintenance in Sheffield, Hounslow and the Isle of Wight. My Department will work urgently with the four local authorities concerned to ensure that we can deliver these schemes within the available funding.

My right hon. Friend the Chancellor also announced last week that we will invest more than £900 million over the next four years on new local authority major schemes: including a new bridge over the Mersey at Runcorn, partly funded by tolls; improving access to Leeds station; and extending the Midland Metro tram line from Snow Hill to New Street through Birmingham city centre.

I can confirm today that a further seven major local authority projects have also been given the green light, subject to planning and other approvals. They are: a new bus interchange and associated transport improvements in Mansfield; a new bypass, which will take traffic away from communities in Sefton; an integrated package of sustainable transport improvements in Ipswich; major improvements to the M5 at junction 29 east of Exeter, providing access to new housing and employment areas; a bypass to the north of Lancaster, improving connections between the port of Heysham and the M6; improvements on the A57 east of the M1 junction 31, near Todwick; and a new northern distributor road in Taunton to provide additional cross-town capacity and access to areas of brownfield land.

Those schemes, worth about £300 million in total, have been selected from a pool of projects with proven business cases. They are listed as supported schemes and shaded green in the list to which I referred earlier. Our duty, however, is to ensure that every pound that is spent is essential. Even with those priority schemes, I expect the local authority promoters to work with my Department to ensure that every opportunity for cost saving has been taken and every source of alternative contributions has been fully explored before funding is confirmed in January next year.

Although the House will welcome the decisions, Members on both sides of the House will want to know how we propose to handle the remaining schemes. The £600 million plus remaining for additional new projects, after the announcements already made, demonstrates the importance that we attach to local authority major schemes, but it will not be enough to fund all the schemes proposed by local authorities. In the list that I have placed in the Library, I have included all currently submitted schemes, including three that previously had conditional approval and that we will now seek to progress to full approval, showing how we propose to categorise each of them.

For 22 schemes, for which my Department has completed a value-for-money assessment in the past four years, we will invite best and final funding bids from the development pool—the schemes shaded amber in the list. Promoters will be challenged by my Department to consider the scope of the scheme, its cost, lower-cost alternatives and their ability to contribute more locally. Those who can make the best case are the most likely to receive funding, which will be confirmed by the end of 2011.

Further analysis will be carried out on another 34 schemes, for which the Department does not currently have an up-to-date assessment, to determine whether they can go forward to join the development pool and bid for a share of the £600 million plus of funds available. Those schemes are shaded blue on the list. A decision will be made by January 2011.

This competitive process will ensure that the greatest possible number of schemes, with the best value for money, will be able to proceed, facilitating economic growth and creating jobs across the country. Under regional funding allocations, regional and local bodies were encouraged by the previous Government to identify a large number of schemes for longer-term prioritisation. Many of those were in the early stages of development, with no business cases submitted to the Department for Transport before the cut-off that we announced on 10 June this year.

In the longer term, I want such decisions on local transport priorities to be taken out of Whitehall and placed in the hands of local people. My Department will work with the emerging local enterprise partnerships and local authorities to identify the best approach to local decision making on future transport priorities.

I have set out our decisions and what they mean for our strategic and local transport networks. The measures will help to deliver long-term, sustainable and affordable economic growth in this country. The difficult choices made by the Government have allowed us to invest in the future. I commend the statement to the House.

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

May I begin by thanking the right hon. Gentleman for sending my office a copy of his statement in advance? Helpfully, he also placed a copy of the document to which he has been referring in the Vote Office. On my way in, I saw what looked like a bus queue there, because the document was late—a bit like some buses. None the less, it is better late than never. Members on both sides of the House will be grateful to have had sight, at least before he began his statement, of a copy of the document showing what has happened to the schemes.

This is the first time that the right hon. Gentleman and I have faced each other across the Dispatch Box, and I look forward to further such exchanges. We have at least one thing in common: he does not want to be in his current job because he would rather be the Chief Secretary to the Treasury, and I do not want to be in my job, because I would rather be in his job—in a Labour Government of course. We will see which one of us gets what we want first.

I welcome the confirmation of the projects that the Secretary of State listed in his statement. They were planned by the last Government, and I am pleased that he has recognised the need for that vital investment to be protected. Let me say at the outset that we have pledged to be a responsible Opposition, and that when I agree with the Secretary of State, I will support him and work with him. Transport is critical to our national interest, and investment in infrastructure is vital to our construction industry and the rebalancing of our economy from financial to real engineering. To the extent that we can find common ground, I certainly intend to ensure that we work together.

As a north-west Member of Parliament, I especially welcome the confirmation of much of the funding that the last Government agreed for the second Mersey crossing between Runcorn and Widnes and the electrification of rail lines between Lime Street, Manchester, Preston and Blackpool, which will mean more reliable, greener services with more capacity and reduced journey times. Those projects are vital to the regional economy, and it is absolutely right for them to proceed.

While Members on both sides of the House will welcome the commitments made today to a wide range of important transport infrastructure projects, the statement raises a number of questions. The main purpose of the schemes is to tackle congestion, yet at the same time the Secretary of State has announced hikes in rail fares that may well drive people on to the roads. Indeed, I believe that they will. Does the Secretary of State accept that lifting the cap on regulated rail fares and allowing them to rise to 3% above inflation from one year to the next will further squeeze hard-working people who commute? Many have already been hit by cuts, including cuts in child benefit, and they are about to face a increase in the VAT rate to 20%, an increase in employees’ national insurance contributions, and, if they are in the public sector, an increase of 3% in their pension contributions. Just how much more can commuters be expected to take?

Does the Secretary of State accept that, according to the assumptions on inflation by the Office for Budget Responsibility, the increase means that commuter fares will rise by 33.6% by 2015? That will simply drive people off the railways and back on to our already congested roads. His predecessor as spokesperson in opposition, the Minister of State, Department for Transport, the right hon. Member for Chipping Barnet (Mrs Villiers)—who is present—said that a 3% rise in fares would be enough to

“price people off the railways”.—[Official Report, 17 July 2007; Vol. 463, c. 149.]

What does he think that a 33.6% increase will do?

Why did the Secretary of State argue in an interview with The Times on Saturday that the fare rises would be 10% over four years? He said:

“If you are paying £1000 for your season ticket now, it could cost you £1100 at the end of the period”.

I know that, as he told The Times, the Secretary of State loves his Jaguar—I love Jaguars as well, especially as they are built in my constituency—but let me tell him that a season ticket from Weybridge to London costs £2,272 today, and that, as a result of these fare rises, it could cost £3,035 by 2015. Someone who aspires to be Chief Secretary to the Treasury should be able to tell that that increase is much more than 10%.

How many of the schemes that the Secretary of State has announced today will, under the revised plans, be completed later than was originally intended? What percentage of the cost of those schemes will now be covered by the current spending review, and how many will see their completion delayed until the next? What assessment has the Secretary of State made of the economic impact of the delays on jobs, growth and competitiveness? How many of the schemes have been approved on the basis of the original proposals that he inherited, and which of them have been scaled back? What are the implications of that for each scheme?

What consultation has been carried out with local government and local communities about any changes to the schemes? What percentage and amount have been moved from Government expenditure to PFI? Has the Secretary of State completed any assessment of the impact of the reduction in transport capital expenditure on our wider transport networks? What assessment has he made of the impact on our road network, and likely increases in congestion, of the significant increases in train fares and the cuts in local bus services that the comprehensive spending review set out? What assurance can he give us that these schemes will lead to high-quality manufacturing jobs in the United Kingdom, with contracts being secured by British industry?

Finally, does the Secretary of State agree that it was quite wrong of him to spin his comprehensive spending review settlement as a huge victory? Is not the reality that he over-spun his settlement? I have here an analysis by the Institute for Fiscal Studies of the impact of the CSR on Government Departments. Helpfully, it has listed Departments as winners and losers, and I am sorry to have to tell the Secretary of State that the IFS says he is a loser.

The impression given by the Secretary of State is that cuts in his budget have no impact on capital investment. However, on top of the 21% reduction in resource spending, there is to be an 11% cut in spending on capital. That is 11% less spent on vital infrastructure, so it is quite wrong for the right hon. Gentleman to suggest that he has somehow secured a great victory or that spending is not being cut. No doubt we will have many more exchanges across the Dispatch Box, not least when the right hon. Gentleman announces his rail investment proposals.

The Labour party aspires to have an integrated transport policy. Perhaps the right hon. Gentleman can in future have an integrated transport statement and tell us about all the investment on the same day.

[Mr Hammond]

I thank the hon. Lady for her comments and welcome her to the Dispatch Box. I welcome the tone of her initial remarks at least; I am sorry it degenerated a bit towards the end. I am also sorry to have to tell her that I cannot write as quickly as she can ask questions so I am not sure that I took them all down, but I will try to deal with some of the issues she raised.

On the departmental settlement, frankly I think it is a bit rich for the hon. Lady to say that an 11% reduction in transport capital expenditure is a disastrous settlement, because when her Government were in office they were planning a 50% cut in total public capital expenditure. In the comprehensive spending review, the Government had to take difficult decisions about what to prioritise. The Department for Transport faced the smallest reduction in capital expenditure of any Department and it now has the second largest capital budget in the Government. I would have thought that the hon. Lady would welcome that as a way of protecting transport infrastructure investment.

The hon. Lady asked about rail fares, and although today’s statement is not primarily about railways I am happy to deal with that issue. Of course I would have preferred not to raise the cap on regulated fare increases, but we faced a choice between going ahead with the investment in additional capacity to reduce overcrowding and improve the attractiveness of the railways to passengers or increasing fares, and I took the decision that the right long-term solution was to increase fares for a period of three years. But let me be clear: I agree with the hon. Lady that fares cannot increase indefinitely, and the medium-term solution to the challenge on our railways has to be getting the cost base down so that the railways are affordable for both passengers and the taxpayer, who supports the railways through subsidy.

The hon. Lady asked whether the schemes announced today would be completed later than originally planned. Most of these schemes did not have a specific timetable, but I can tell her this: over the next four years transport investment will be greater in cash terms than it was over the last four years, so we are not talking about some massive rescheduling of the programme.

The hon. Lady asked about consultation with local government. All the local authority schemes I mentioned today were, of course, proposed by local authority sponsors, and there is constant dialogue between local authorities and my Department. In line with Mr Speaker’s recommendations, we have made this statement first to the House of Commons, but local authorities will be informed during the course of today of what I have said about their schemes, and we will now engage in intensive dialogue with them as we take these proposals forward.

We believe that investment in highway infrastructure and local transport schemes is crucial to making the UK an attractive place for manufacturing investment, both indigenous and inward. As the hon. Lady knows, I cannot promise her that the jobs created directly by this investment will go to UK providers because the schemes will be subject to the European procurement directive rules and will have to be tendered in an open and transparent way, but I am sure that our announcements today will support the revival of the UK manufacturing base, which is critical to this country’s future.