East Coast Main Line Franchise

Mark Lazarowicz Excerpts

Thursday 20th June 2013 Commons Chamber

[Sheila Gilmore]

I thank my hon. Friend for clarifying the position. Perhaps for the rest of this debate, unlike the one in Westminster Hall, we will concentrate on the main issues before us and the reasons why the Government made the decision they have.

In the Westminster Hall debate, a number of hon. Members questioned the Minister’s claim that East Coast’s performance had plateaued, noting the remarks the right hon. Gentleman made to the Select Committee on Transport on 24 April:

“If you look at the latest monthly figures for reliability and punctuality, it is the worst of the 19 franchises.”

That struck me as odd, because in my experience East Coast trains are, more often than not, on time. That was borne out in the debate, in which many speakers pointed out that the Minister was quoting figures from a narrow four-week period in which bad weather had caused flooding and brought down overhead wires. East Coast is powerless to prevent such incidents, and responsibility for subsequent delays lies with the infrastructure manager, Network Rail. In fact, according to the moving annual average punctuality figures, which offer a more balanced picture, East Coast is in the top three of the seven long-distance franchises.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

I congratulate my hon. Friend and neighbour and those who signed the motion on securing the debate. Is it not worth pointing out that, over the decades, a consistent cause of delays has been problems with the overhead wires? Is she aware that one of the main reasons those problems have arisen is that, back in the ’80s when the line was electrified under the previous Conservative Government, the overhead wires system was installed on the cheap? Ever since, we have suffered problems precisely because they did not do the good job they ought to have done.

[Sheila Gilmore]

Indeed. I am not saying, and I do not think any Opposition Member would say, that there is nothing that needs to be improved. Track and rolling stock can always be improved, and the current state of the track and overhead cables is a problem, but I would argue that it would be a problem for any operator. That is not what lies behind the Government’s proposal.

There is also the question of the premium payments. Again, I quote the Minister, this time at Transport questions on 25 April, when he said that

“the premium that the east coast main line pays to the Treasury is less than that paid by the west coast main line.”—[Official Report, 25 April 2013; Vol. 561, c. 995.]

In fact, a recent report from the Office of Rail Regulation suggests that, in 2011-12, the Government received £156 million in net franchise payments from the operator of the west coast main line and £177 million from East Coast—the opposite of what the Minister asserted.

--- Later in debate ---

[Andrew Jones]

No, I do not use first class—the hon. Gentleman is absolutely right. Extreme caution is required for any Member using first class, and I do not risk it.

The question is not whether the line should be in private or public ownership; it is about getting the franchise right. I want to see the franchise taken forward promptly, with customers right at the heart of the railway. That means listening to what they want and responding to it. For my own area, in the past three years we have seen the first direct London to Harrogate service for 30 years. I remind the House that this service was removed under nationalisation, alongside the downgrading of services for Hull, Bradford, Cleethorpes and Teesside. The new service is fantastic. Our area has an important visitor economy and is hosting part of the Tour de France next year.

[Mark Lazarowicz]

I might be wrong, but is the service to Harrogate not an East Coast rail service? Does that not show that the operator is able to be flexible and respond to customer demand and passenger needs?

[Andrew Jones]

Of course it is an East Coast service. In some ways the operator has responded and I am quite happy to reflect that. I just think that more can be done and the hon. Gentleman’s comment does not really address why our railways saw such a dramatic turnaround after privatisation. Opposition Members have had no comments whatever to make about how we have had decades and decades of decline in passenger numbers. Privatisation occurred and the situation changed utterly. I am sure the Minister has noticed that no Opposition Member has said a word about the change in passenger numbers from the mid-1990s onwards.

I would like to see the new franchise introduce more services for Harrogate. I am sure that representations will be made nearer the time. Flexibility will need to be built in so that we can allow the operator, whoever wins the franchise, to respond to demand. I hope there will be new rolling stock, as some of the trains on the service are from the 1970s, and line investment. It is worth noting that new rolling stock and line investment would change the cost base of the franchise, and start to change some of the numbers that Opposition Members have been keen to quote this afternoon. I urge the Minister to press on, because that will mean more innovation and more success for our industry.

--- Later in debate ---

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

The hon. Member for Argyll and Bute (Mr Reid) made a robust defence of privatisation—it must be unusual for the Conservatives to hear a Liberal Democrat robustly defending Government policies for a change—but it is not unfair to point out that he represents a constituency in the west of Scotland. Although I am sure some of his constituents use the east coast service from time to time, he will not have had my experience of regularly meeting constituents on the train or at the station. If he had, he would know that his defence for putting the east coast service back into private hands would not find great favour among users of that line, because the service provided since East Coast was brought in has been good. It has not always been perfect, but customers and passengers are generally satisfied and, as has been said, when there are problems—particularly delays—they are mostly not down to factors over which East Coast has, or is expected to have, any control.

It is pretty outrageous of the Minister, who is generally a fair person, to use poor punctuality over some selected periods to justify putting the east coast service back into private hands. Some of his colleagues suggested that the private sector might be able to offer infrastructure improvements or offers for long-term planning, but for the last few years, East Coast has been operating the service, not on a day-to-day basis but certainly not on a long-term basis with any security. Surely we should now give East Coast the chance to see what it could come up with if it were given long-term security similar to a franchise period.

The Government should approach the issue in a non-ideological way. As has been said in this debate, East Coast provides a good return to the taxpayer, in contrast to previous operators, and surely success should be rewarded, not punished as the Government seem intent on doing. I would like the service to be retained and continue to be operated by Directly Operated Railways. That would be the simplest way forward. If the Government are not prepared to do that, could they not allow Directly Operated Railways to come forward with an alternative bid and a proposal that could be put against whatever comes in from private tenderers, to see who offers best value for the Government and for passengers? Then we can judge who has the best offer on the table. The Government should at least do that, if they are not driven purely by an ideological bent, as they appear to be.

I wonder whether the way the Government have timetabled the franchise process—presumably partly to comply with the Brown review and obviously in order to have the east coast main line back in private hands before the 2015 election—will result in a fair bidding process. I say that because with Virgin operating the west coast route until April 2017 and providing a service that is popular with many passengers, and with another branch of the Virgin empire operating flights to Edinburgh and Aberdeen, competition issues would surely arise if it was to bid for the east coast main line as well. It would not leave many alternative bidders, certainly from within the UK. The 2015 date has clearly been driven by the date of the general election, but I wonder whether the franchise process, instead of giving the Government a successful policy to sell to the public, might not in fact give them a huge headache just before May 2015. If that is the case, it will serve them right. I say give DOR on the east coast main line a chance at least to put forward an alternative bid to show what it can do, to show what its management team can do and to show what alternative offer can be put into the process to see which would bring the best value for money.

I want to raise a point that has not been raised so far, but which is important to the future of the east coast main line and the franchise. We will be having a separate debate next week on High Speed 2, which I support—although I think it should be going all the way to Scotland—but whichever option is adopted for the future of high-speed rail in the UK, under the present plans the services operating the high-speed system will reach points near Manchester, York or Leeds, and will then be run on the existing rail network up to north-east England and Scotland—along what are endearingly called in the HS2 prospectus the “classic routes” to Edinburgh and Glasgow. It is reasonable to ask, therefore, how many more trains we can fit into the existing east coast main line network north of York.

For those reasons, we need to plan for the future services, network and infrastructure on the east coast main line on a long-term, secure basis. Let us not forget what has happened before with the franchising process on that line. Twice the operator has been forced to give back the service to the Department, and most recently DOR was forced to operate the service at the last minute to ensure that the public continued getting a good service, as indeed they have.

If DOR cannot continue operating the east coast service, the Government—whoever is in power in 2015—might find themselves in a difficult situation. At the moment, if a privately operated franchise collapses, DOR has the infrastructure, staffing and structure to move in quickly and take over the service. If we take away the DOR service on the east coast main line, we will take away a valuable alternative operator and comparator for the rail network. That is another reason why the Government should be rethinking this proposal and approaching it on a non-ideological basis. They need to consider what is best for the customer and passenger, and that must surely be to allow the current East Coast service to continue, rather than yet again to force it into private hands in the way suggested.