Infrastructure Bill [Lords]

Mark Pawsey Excerpts

Monday 8th December 2014 Commons Chamber

[Mark Pawsey (Rugby) (Con)]

It is a pleasure to follow the hon. Member for Liverpool, Riverside (Mrs Ellman). I, too, will speak about highways, but I will also speak about land use planning and fracking. The link between the measures on all those issues is that they will improve the competitiveness of the UK economy and provide the conditions for growth, which will mean more jobs and will enable us to fund the many things that we want Governments to do.

Part 1 of Bill relates to road transport, which is massively important to businesses in my constituency because Rugby is, of course, at the centre of the UK and at the crossroads of the motorway network, with the M1, the M6 and the A14 meeting at Catthorpe. I want to put on record my gratitude for the recent announcement of new flyovers and underpasses on the A46 at Binley and Walsgrave, which will be of great help to my constituents who suffer from congestion in that area.

Rugby is in a strategic location, which has meant that the logistics industry has developed apace over recent years. We have the Daventry international rail freight terminal—DIRFT—where Eddie Stobart and Tesco are big occupiers, and where Sainsbury’s is developing the UK’s largest warehouse. Immediately adjacent to Daventry is the Rugby radio site, which will become a large housing development with 6,200 new homes and will provide the workers for the many distribution sites on the eastern side of Rugby. There is significant warehouse development adjacent to junction 1 of the M6, where Gap and Pearson Education have substantial units. Nearby, there is the Gateway site, the first occupier of which will be H&M, the clothes retailer, which will have a substantial site. At other sites, we have DHL, which delivers for the NHS, and companies such as Premier Foods.

The logistics industry is massively important to Rugby’s economy. It was previously thought of as a low-wage, low-skill industry, with big lads lifting boxes, but nothing could be further from the truth. I recently spent time at Premier Foods, which has had notoriety in recent days for other reasons. It is a big supplier to our major food retailers. At its distribution site in Rugby, it was introducing jobseekers, many of whom had been out of work for some time, to the modern workplace. It was preparing them for interview and for the environment that they would find on going to seek work. I saw forklift truck operators moving products around the warehouse using barcode readers. They had computer screens attached to the forklift trucks to provide maximum efficiency in the warehouse’s operations. Logistics is far from the low-scale, low-skill industry that many people paint it as.

Logistics is an industry that I am familiar with because I ran a small-scale wholesale distribution business that took advantage of Rugby’s excellent location and connections. In addition to efficiency in the warehouse, the logistics industry depends on an efficient trunk road network. I want to draw attention to two issues. The first is how the transport provisions of the Infrastructure Bill will assist us in dealing with congestion. It is believed that congestion will cost £10 billion by 2040. We need more capacity on the strategic road network to minimise bottlenecks and avoid congestion. The second issue is the need for prompt reopening of the strategic road network, whether it is an entire motorway or A road or lanes thereof, after catastrophic events.

On the first issue, if there is insufficient capacity, the logistics industry is able to make fewer deliveries per vehicle, which leads to an increased cost per delivery, a higher price for the customer and smaller profits being available to businesses for reinvestment. Often, the consequence of the slow reopening of a motorway or other road on the strategic network after an event that has caused it to close is that set-day deliveries cannot be made on the allocated day, leading to customers getting goods a day late, which can lead to problems with production processes that operate on a just-in-time basis. In businesses such as the one that I ran, if one day’s deliveries did not get out, it was necessary to hire a vehicle and employ a temporary driver for the following day to get the goods out. Of course, that adds to the cost of getting the product to the customer.

All those issues make improvements to the management of the strategic road network essential. It is for that reason that I support the creation of a strategic highways company in the Bill. The improvements need to take place at the right time to avoid the stop-start approach that we have had in recent years. I was interested to note the view of the Institution of Civil Engineers, which stated:

“Transforming the Highways Agency into a government owned company will facilitate a welcome shift away from the costly and inefficient stop/start pattern of investment that has plagued the development and operation of our road network.”

That will deliver an upgrade to the important logistics businesses in my constituency, enabling them to operate more efficiently and keep costs to the consumer down.

The businesses in my constituency expect the Government agency to be more accountable, in the same way that they are accountable to their customers. I am therefore pleased that clause 5 gives the Secretary of State the power to impose fines when the strategic highways company fails to meet the requirements of the road investment strategy. I am also pleased that clauses 8 to 12 provide oversight through an independent road users’ watchdog, which is currently known as Passenger Focus. That will provide more transparency and accountability and drive costs down, which is of great importance to businesses in Rugby.

I am interested to note the Labour party’s criticism that there is a lack of any reference to local roads. Strategic roads make up just 2.6% of the road network, but account for 60% of freight and business traffic. It is therefore entirely right that the Bill focuses on them. Local roads are a matter for local authorities and local communities when they determine their priorities.

The second set of proposals that I want to refer to are those on planning, land use and buildings. The Communities and Local Government Committee is looking at the operation of the national planning policy framework to see how that revised system, which was introduced just three or four years ago, is bedding in. Members will have to await our report, but during the evidence sessions we found no evidence that an overhaul was needed. It is interesting that the Opposition have no proposal to change the national planning policy framework fundamentally. Clearly, the system is bedding in and needs more time. The introduction of further uncertainty would not be helpful at this stage.

There are two areas where the Bill introduces proposals to the national planning policy framework. The fundamental principles of the NPPF are localist, right down to neighbourhood plans where small communities have their say on the types of development that can take place in their areas, but there need to be processes for the developments that we would describe as bigger than local. Much of this is currently dealt with under the Planning Act 2008, and refers to nationally significant infrastructure projects. I was interested to hear a Member earlier referring to the Thames tideway tunnel and Hinkley Point C power station as the kind of development that would be dealt with through the national significant infrastructure projects. That does not mean a great deal for my constituency, but of course we all need roads, water and waste projects. Traditionally, we have been glacially slow in dealing with planning applications in this area, and there is no question but that we need to speed up the process in the interests of making our economy more efficient and our manufacturers and businesses better able to compete with their overseas competitors. The Bill proposes to speed up the existing powers by appointing inspectors more quickly and by reducing bureaucracy and the cost of inspection through fewer inspectors on a panel. That will enable the country to get on with it, once principles for development are established.

A second area where the Bill would help to enable development get under way more quickly is on the discharge of planning conditions. These are delays caused once the planning process has been gone through, once the principle of development has been given on a site. The NPPF gives developers more certainty by directing development to those areas where the local planning authority has determined that planning should take place. Often, however, that certainty is replaced by an uncertainty over when the regulatory burden, through conditions, might be discharged. Development has been agreed in principle, but the developer is unable to make a start pending conditions, such as the preparation of a report. I was interested to hear, I think, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) mention a builder who pointed out that a third of his land bank, a total of 5,000 plots, is currently awaiting reserve matters.

I am the first to acknowledge that planners are keen to see good development take place. Planning has a positive role, and the role of planning is not to frustrate developers. There are many good planning officers who hold regular meetings with developers, so that developers can understand well the priorities of a local planning authority. I single out as a very good planning department that of my local authority of Rugby borough council, which I know has a tradition of meeting developers. I am as keen as they are for good development to come to my constituency, because good development provides jobs and prosperity from which all my constituents benefit. I would expect a developer, faced with excessive conditions causing a problem with getting development under way, to meet local planners to resolve those conditions. That is the approach the Local Government Association, in its representation, is looking for.

Often, the local planning authority takes too long to respond to a request from a developer to be released from a condition. That can have the effect of delaying development from taking place, so I support the provisions for deemed discharge. I was interested to note the criticism from the Labour party that there are no garden city principles in the Bill. I think most of us can accept that the garden city principles are favourable principles, but it is a matter for local communities, if they wish to see them introduced in their area, to build them into their local plan to require that to take place.

On fracking, many years ago I studied land law and I seem to remember the principle that, “He who owns land does so up to the heavens and down to the centre of the earth.” That broad principle cannot exist in a general environment. We need to put this issue in perspective. Most fracking takes place at a minimum of 300 metres deep, which is 10 times deeper than the deepest London tube station. This is an important issue, because we need to get our energy costs under control. In my constituency, we have a cement manufacturer, and the most expensive place in the world to produce cement is the UK. We need to address fracking to get our energy costs down and to allow our businesses to be competitive with those in the rest of the world.

Oral Answers to Questions

Mark Pawsey Excerpts

Thursday 4th December 2014 Commons Chamber

[Mr Hague]

I join my hon. Friend in placing on record the thanks of—I think—all Members to the staff of the House, who did a great deal to make the Youth Parliament possible. It is worth considering the idea of extending the time available to them by enabling some of them to sit in other parts of the House, and I am sure that we can look into that together, Mr Speaker.

[Mark Pawsey (Rugby) (Con)]

6. What the implications are of the Smith commission report for further discussions of devolution in the House.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

9. What the implications are of the Smith commission report for further discussions of devolution in the House.

[The First Secretary of State and Leader of the House of Commons (Mr William Hague)]

The Government are committed to publishing draft clauses based on the Smith commission report by 25 January 2015. I will report to the House in due course on further progress in relation to the devolution of powers within the United Kingdom, and on the consequences for England.

[Mark Pawsey]

As the House considers the report, there will be much talk about how combined city authorities can become the vehicles for devolution in England. That will make it increasingly necessary for authorities to come together in the west midlands, where there is still no agreement. Will the Leader of the House ensure that the position of shire counties and rural areas is fully taken into account, so that everyone in England has an opportunity to benefit?

[Mr Hague]

That is an extremely important point, and, as a north Yorkshire Member of Parliament, I am certainly very conscious of it. There is a huge opportunity for local authorities to take up the challenge that has been taken up by Manchester, and to reach the same agreement with the Chancellor. However, this does not only involve metropolitan areas or conurbations; there are also major opportunities for county councils and rural authorities in general to make such plans, and we should encourage them to do so.

A5 Trunk Road (M42/M69)

Mark Pawsey Excerpts

Tuesday 28th October 2014 Commons Chamber

[Mr Marcus Jones (Nuneaton) (Con)]

I am delighted to have been able to secure a debate about one of the busiest and most congested parts of our strategic road network. I am pleased to see that my hon. Friend the Member for Bosworth (David Tredinnick) is present—he, too, has a constituency interest in this busy stretch of the A5—and I thank my right hon. Friend the Minister of State for his time, and for the consideration that I hope he will give to the debate.

Let me explain why I am concerned about this stretch of the A5, and why I believe that there needs to be a fundamental rethink about the future of that busy highway for the sake of my constituents who live on the route, and for the sake of economic growth in the west and east midlands corridor.

The A5, or Watling street, which marks the northern boundary of my constituency, was built by the Romans, who originally built the road from Londinium to Deva—or London to Chester, as we know them today. I have not established the exact date when Watling street was built, but the fact that the Romans withdrew from Britain in 410 AD gives us a slight clue as to the longevity of the route. I am certain that the sheer volume of traffic that would use Watling street in the 21st century was never envisaged, even once the ownership of cars became commonplace after the second world war. That is why so many other sections of the busy road, which now stretches from London to Holyhead, have been substantially changed to reflect the volume of vehicles that use it.

Today, the A5 between junction 10 of the M42 and junction 1 of the M69 is one of the most congested routes on the strategic road network, particularly between the Longshoot junction and the Dodwells roundabout. That section is considered to be the 15th most congested section of road on the network. Many of my constituents live along Watling Street and on feeder roads such as the Longshoot, Higham lane, Weddington road and Woodford lane. They live every day with the imposition of queuing traffic, high levels of noise and massive pollution.

The pressure on the route is often compounded when traffic shifts from the M6 to the A5. There are regular closures on the M6. As my right hon. Friend knows, I have expressed concern in the House before about the safety of junctions 1 to 4 on the M6, where there are regular accidents. My constituents are affected by the way in which the traffic shifts from the motorway through my constituency to the A5 in order to reach the M42 and the M69. You probably think that that is a subject for a debate on another day, Mr Deputy Speaker, but I am sure that my right hon. Friend will give my comments some consideration tonight.

Over the decades, this section of the A5 has undergone numerous redesigns to deal with safety issues and to mitigate the growing number of vehicles on our roads. For many years my constituents have suffered from the disruption of regular roadworks that are intended to improve the situation. At this very moment, work is taking place from the Dodwells roundabout to the Royal Red Gate junction, where the A5 meets the A444. Just tonight, I was interviewed on BBC Radio Coventry and Warwickshire about the issue, along with a very disgruntled lady who was less than happy about the current disruption. I think that that disruption is extremely unfortunate, but it is quite necessary. Much of the work that is being undertaken between the Royal Red Gate and Higham lane junctions is facilitating the new Motor Industry Research Association technology park, which is creating more than 2,000 new jobs. As well as the new jobs, that part of the route will have a very positive effect on the local area because it is being turned into dual carriageway. Inevitably, that progress will put greater stress on the Longshoot junction and the Dodwells roundabout east of MIRA, but that will largely be mitigated by the current pinch-point scheme now under construction. The changes now taking place on the A5 will have a positive effect and there will be gain for the pain that my constituents and the many users of this busy route are experiencing.

I am also convinced, however, that we need a longer-term solution and we must seek it now. We cannot wait five, 10, 15 or 20 years before we consider the future. That would not be right for my constituents or the wider west and east midlands economy.

A substantial amount of development is planned along the A5 corridor both in my constituency and in that of my hon. Friend the Member for Bosworth. As my constituents know, I do not agree with all the development plans being promoted by the local planning authority in my constituency. However, it appears from the approach it is taking that these developments will go ahead whether I or my constituents like them or not. We must therefore think about substantive solutions for this section of the A5 to deal with the future issues.

My right hon. Friend the Minister will also be aware of the significant partnership-working currently taking place on the issue between the Highways Agency, the Coventry and Warwickshire local enterprise partnership, the Leicester and Leicestershire LEP, Warwickshire county council, Leicestershire county council, and the Nuneaton and Bedworth, Hinckley and Bosworth and North Warwickshire borough councils. The Minister will know that those agencies have jointly started to conduct some very embryonic work on a strategic enhancement of this section of the A5. They are looking at the issues and constraints that affect that busy section of highway.

That work has been conducted by the partnership, which has been formed because there is a strong business case for a long-term solution to the problems we face on that section of highway. It is thought that a long-term solution for that section of the A5 could bring savings of £680 million through better travel times, lower vehicle operating costs and a reduction in the accident rate on what is a busy stretch of road. That proposal aligns with the strategic growth aspirations of both the public sector and the private sector in the area. This evening I am asking the Minister to look at the detail of the embryonic work that has already been conducted and that I am sure his Department has seen.

[Mark Pawsey (Rugby) (Con)]

My hon. Friend is making a very strong case for the A5, which is an important route from the M1 at junction 18 to the north-west, avoiding the M6. I wonder whether we might persuade the Minister to look at the southern part of the A5 as well, from the M69 down to the M1. There will be very substantial housing and commercial development at the junction 18 end, and we could use that as an opportunity to improve that thoroughfare.

[Mr Jones]

I thank my hon. Friend, who represents Rugby. I completely agree with his request in relation to the section further down the A5, which can only help the situation further up the A5, to the benefit of my constituents and the constituents of my hon. Friend the Member for Bosworth. I would also say in that regard that the work currently going on at the Catthorpe interchange, where the M6 meets the M1-A14, will have an extremely positive effect for our constituents in addressing, hopefully, some of the issues—not all, but some—that I referred to earlier: the A5 and Nuneaton get so clogged with traffic due to accidents on the M6.

This evening, I am asking the Minister to speak to my right hon. Friends the Secretary of State for Transport and the Chancellor about this issue, which is a matter of major concern for my constituents and many other people living in the region. He will know that the embryonic work has been carried out. I am now looking for a sympathetic ear in the hope that he will put forward my argument that funding for a further in-depth investigation and feasibility study of this busy stretch of the strategic road network should be made available. The investigation needs to include all stakeholders, particularly the people who live on and are affected by the current route.

I know how diligent the Minister is. He has helped me personally with other issues in my constituency, including the fallout following the closure of Daw Mill colliery. I remember the assistance that he gave me at that time, and I am confident that he will try to help in whatever way he can now. We have an autumn statement coming up, and I am sure that he will make a strong case to the Secretary of State and the Chancellor so that we can look at the long-term future of this busy section of the A5, which needs urgent consideration. I hope that the points that I have put on record tonight will go some way to enabling the case to go forward, so that we can do the right thing for my constituents. That has not been achieved under numerous Governments over the decades, and my constituents have had to put up with absolute mayhem on that section of this busy route.

--- Later in debate ---

[The Minister of State, Department for Transport (Mr John Hayes)]

I congratulate my hon. Friend the Member for Nuneaton (Mr Jones) on securing this debate on the A5 trunk road between the M42, junction 10 and the M69, junction 2. As has been said, he has been a tireless campaigner on the need for future investment in this road, and I recognise his continuing courageous determination in that respect. He has raised this issue on behalf of his constituents, local businesses and the local economy. C.S Lewis said that

“courage is not simply one of the virtues, but the form of every virtue at the testing point”.

My hon. Friend’s courage has been in evidence once again tonight in raising these matters.

This Government recognise the crucial role that transport infrastructure plays in facilitating growth across the country and creating a more balanced economy, but that alone would not be justification, of itself; I take the view, and have increasingly evangelised it in the Department and more widely, that improving transport is also about well-being, communal opportunity, individual chances to gain employment and new experiences, and good civil society. I see transport and communications in that broader perspective, which I know my hon. Friend shares. In connecting communities and in enabling people to access jobs, services and leisure, transport can play a vital role in regenerative efforts. That is why we have been determined to reverse the effects of the previous Administration’s neglect by securing significant levels of investment in our strategic road network.

All Governments make mistakes and all Governments do things well. As you know, Mr Deputy Speaker, I like to be generous in these matters, but one of the previous regime’s mistakes was to allow their approach to roads to be driven by the piecemeal, the ad hoc and the reactive. By contrast, this Government are taking a strategic, long-term, lateral view of the importance of investing in roads, which is why we have committed five-year funding to strategic road investment. Hon. Members will know that the detail of that investment in strategic transport infrastructure was set out by the Chancellor in last year’s spending review statement. The Treasury Command Paper “Investing in Britain’s future” set out that this Government will invest more than £28 billion in enhancements and maintenance of both national and local roads over the period up to 2020-21. That long-term vision, backed by funding, will build consistency and coherence into the approach we take to road development. It means that existing roads will be improved—we are resurfacing about 80% of the nation’s roads— and we will invest £10.7 billion in major national road projects, as well as £6 billion in the maintenance of strategic roads.

On the future investment in the strategic network, my hon. Friend will be aware that the Highways Agency is currently conducting its route strategy process. Route strategies will provide a smarter approach to investment planning across the network, through greater collaboration with local stakeholders to determine the nature, need and timing of those investments. The process has been hallmarked by two stages, the first of which has been completed. It identified performance issues on routes, future challenges and growth opportunities, taking full account of local priorities and aspirations, with the finalised evidence made available on 23 April. The second stage is well under way; utilising the evidence, we are establishing outline operational and investment priorities for all routes on the strategic road network, and we will take forward a programme of work to identify indicative solutions, which will cover operational, maintenance and, if appropriate, road improvement schemes to inform future investment plans.

[Mark Pawsey]

Will the Minister acknowledge the importance of the improvement of such roads to the road haulage industry—many of its firms are based in my constituency—and the important part that logistics plays in our national economy?

[Mr Hayes]

Indeed, and it was for that very reason that I met the representative body of road hauliers just last week, in the spirit that my hon. Friend personifies. In congratulating and applauding the work of my hon. Friend the Member for Nuneaton, I must also pay tribute to my hon. Friends the Members for Rugby (Mark Pawsey) and for Bosworth (David Tredinnick), who have been tireless campaigners in the defence of and, moreover, in their aspirations for their constituents. They have all taken a particular interest in the A5.

High Speed Rail (London – West Midlands) Bill

Mark Pawsey Excerpts

Monday 28th April 2014 Commons Chamber

[Mark Pawsey (Rugby) (Con)]

First, I wish to apologise for not being present for the early part of the debate: I was on a Select Committee visit.

I regret that I am unable to support the Government tonight. Like many hon. Members, I have constituency interests and many people opposed to the project have made representations to me.

My principal objection is that HS2 is not the right project for the UK as a whole. I accept the need to develop our infrastructure. My constituency is the fastest growing in the west midlands and we recognise that it is necessary to build homes and factories. I support good development, and we can ensure that we get good development by mitigating the effects of development when it takes place. As an example, the west coast main line runs through several villages in my constituency and new homes are being built in the village of Long Lawford either side of the railway line, showing that the building of a new railway line need not cause a massive environmental impact. Some of the mitigation measures the Government have proposed have simply added to the cost of the project—and that cost is another of my principal concerns. The country cannot afford this project.

The case has not been made. The case for speed has been dropped and we are told this is an issue of capacity. If speed is no longer important, why can we not use the existing corridors—for example, the M40? The original argument was that that corridor deviated too much to allow a high-speed line. The issue of capacity assumes that the west coast main line will be full. Its capacity grew enormously following the upgrade, but we have seen a relatively modest increase in traffic on the line since. I travel on it regularly on a train that leaves Rugby in the middle of the day, and the carriage is little more than a quarter full. Like many railways, it is busy early in the morning and at the end of the day. The west coast main line has become a commuter line, and if we simply decrease the transport time between London and Birmingham, all we will do is move commuters further north—they will travel a greater distance.

Much could be done with the existing line, such as reconfiguring the Pendolino trains so that an empty 44-seat first-class carriage can be substituted by a 76-seat standard-class carriage. The number of carriages on each train has been increased from nine to 11, and I see no reason why, with modest additional expenditure, we could not increase it to 12 or more carriages.

Above all, I do not believe that HS2 would have any benefits for my constituency of Rugby. I have already asked the Secretary of State what will happen to the legacy line—the west coast main line—once the high-speed line has been constructed. The Government will have massive incentives to ensure that the high-speed line is used to its maximum. Members of Parliament will ask why we spent £50 billion on the project if it is not fully utilised. Other hon. Members have voiced the concern that the west coast main line will be downgraded. My constituency currently benefits from good access to London, with a 50-minute journey time from Rugby to Euston, which is massively important in attracting new businesses to our area. My concern is that, post high-speed rail, the operator of the legacy line will need to have trains stopping at every station on the route to maximise its revenue, because it will no longer benefit from the city-to-city business. My example for that is the town of Épernay in west France, which used to have a regular service to Paris, but no longer does because the TGV travels to the north to accommodate the city of Reims.

I recognise that the Bill is likely to receive a Second Reading, but I ask the Government to ensure that the project is completed in its entirety. The worst outcome would be if we built between London and Birmingham and failed to build the second part.

High Speed Rail (Preparation) Bill

Mark Pawsey Excerpts

Thursday 31st October 2013 Commons Chamber

[Mark Pawsey (Rugby) (Con)]

Does the hon. Lady think that the Spanish economy has benefited from Spain’s investment in high-speed rail?

[Mrs Ellman]

I am here to talk about the United Kingdom and an amendment concerning networks.

--- Later in debate ---

[Lilian Greenwood]

The Minister rightly talks about the capacity constraints we already face on the west coast main line, and it is vital that everyone in the country is consulted on how the additional capacity is used when it is created by the high-speed line.

[Mark Pawsey]

The hon. Lady has moved on to the question of capacity on the west coast main line. Does she accept that the heavy growth that took place on that line occurred immediately after the upgrade in 2008, and that since that upgrade the rates of increase have slowed tremendously and that, therefore, there could be additional capacity on the existing line? Does she also accept that we can create more capacity by having longer carriages, and by changing the mix between first and second class?

[Lilian Greenwood]

It is well known that on the west coast main line the additional capacity created by the upgrade is already starting to run out and that the line will be full. Of course we can create additional capacity on a train by converting some carriages from first class to standard class, but that does not create extra space on the line for additional trains. As the Minister acknowledged, places such as Shrewsbury and Blackpool want to have an additional direct service but cannot because the capacity is just not available. I am sure that the hon. Member for Rugby (Mark Pawsey) would like to have directed his question to the Minister.

--- Later in debate ---

[Mark Pawsey]

Being given the opportunity to speak now feels like winning the lottery, Madam Deputy Speaker.

I will make one quick point on the impact on my constituents in Rugby. We currently benefit from a fast and frequent service on the west coast main line, so with Virgin Trains we can be in London in 50 minutes and with London Midland we can be there in just under an hour. That is attractive to businesses coming to Rugby, which we can present as a great location. My fear is that, if the Bill goes ahead and the money is given to build High Speed 2, the legacy line will become a stopping line, with trains stopping at every station as the operator seeks to maximise revenues, because the city-to-city business will have been lost—

Cycling

Mark Pawsey Excerpts

Monday 2nd September 2013 Commons Chamber

[Mark Pawsey (Rugby) (Con)]

One of the objectives of today’s debate is to increase the proportion of journeys that are made by bike, and to persuade people to use their bikes more regularly. That makes me part of the target market. Unlike my hon. Friend the Member for Carlisle (John Stevenson), I am not a regular cyclist. I would describe myself as a fair-weather cyclist who cycles infrequently on country lanes for the purpose of exercise or enjoyment.

[Bob Stewart (Beckenham) (Con)]

Let me make this announcement immediately: I am going to dust off my old bike and get cycling. That will help me to live for two more years.

[Mark Pawsey]

The debate has already achieved part of its objective, Madam Deputy Speaker. We have a new cyclist on our Benches. However, if we are fully to realise the objectives set out in the motion, people such as me must be encouraged to ride their bikes more.

The inspiration that led me to use my bicycle more came during the recess. A couple of weeks ago, on a Thursday, I read an article in The Times by Dame Kelly Holmes, encouraging Members of Parliament to ride our bikes before participating in the debate. I had intended to drive the six miles or so from my home to the constituency office, but that day I decided to cycle. I should add that the weather was very good during August, and that the sunshine made my decision a great deal easier.

I have a number of observations to make following that experience. Travelling down Dunchurch road in Rugby in a cycle lane, I noticed that other cyclists were still on the road. I asked myself why those guys were still on the road when I was going down the cycle lane, which is half on the footpath. Then I realised that there were “Give way” lines on the side roads, and that I was having to give way to the cars that were coming out of them. Had I been on the road, I would not have had that problem. The other cyclists were making much faster progress than I was. Perhaps the Minister will explain why cars coming out of a side road have priority over the cyclists on a cycle way.

[Kate Green (Stretford and Urmston) (Lab)]

Could local authorities perhaps be given more discretion to depart from national guidance and come up with imaginative solutions that will work in their own areas?

[Mark Pawsey]

I should certainly like cyclists to be given more encouragement to use cycleways when they are provided.

I encountered another problem on that occasion. I had some constituency duties to fulfil. It was a warm day, and it occurred to me that I ought to carry an extra shirt, so I put one in a rucksack which I carried on my back. I still arrived soaked in sweat, not looking much like a Member of Parliament. I tweeted about the experience and received some useful advice on Twitter, namely that I should put some panniers on my bike so that I need not stick a rucksack on my back which would make my back wet. I now know that if I am to use my bike regularly, I shall need to invest in some panniers.

I also found that, in many instances, the cycleway was in pretty poor condition, with very unclear markings. It had probably been constructed three or four years earlier. Local authorities need to invest in ensuring that the markings on cycleways are clear. On more than one occasion, overgrown trees rendered the cycleway useless and forced me out on to the road.

One or two Members have mentioned vehicles parked in cycleways. Again on more than one occasion, I was forced on to the road by an illegally parked car or van. I agree with what has been said about the need for flexibility on the part of car users who are currently causing difficulties for cyclists.

I took my life in my hands on a slip road on a dual carriageway. There was fast traffic to my right, and as I progressed along to the slip road, to my left, coming up on the inside. Fortunately it was a quiet day, but I should hate to be on that road in different circumstances. Provision should be made for cyclists on slip roads off dual carriageways. I also felt very uncomfortable on roundabouts, which I know have caused concern to the all-party group. I hope that the debate will result in better designed road schemes that make allowances for cyclists.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

Will my hon. Friend give way?

[Mark Pawsey]

I have already given way twice, so I shall continue, if I may.

There has been some discussion today about the use of helmets. I made my decision about whether to wear one when I hired a bike in the Lake district. When I told the young gentleman who served me that I should be more than happy not to bother with a helmet, he said “Sir, how many brains have you got?” I know that there is a Member who goes by the nickname “Two Brains”, but it is not me, and I found the sales assistant’s case very persuasive.

If we are to make progress towards achieving the aims of this debate, the targets should be not people making my journey of six miles or so, but people making journeys of up to three miles in towns such as the one that I represent. It is far too easy—indeed, instinctive, for people who need to travel from a suburb such as Hillmorton or Bilton to the centre of Rugby, a journey of no more than a couple of yards, to get into their cars. Those are the people whom the cycling campaign needs to target. We have already heard about the health and cost benefits that accrue to those who decide to cycle, and the benefits to the environment if more people do so more generally.

Planning has also been mentioned. Rugby borough council has launched a green travel plan. During the recess, I visited a business that had been forced by the plan to include a cycle shed in the development that it had built recently, but regrettably there was not a single bike in it. It is clear that the policies need to be “joined up”.

There are, however, some fantastic cycleways in my constituency. Last Thursday, the mayor officially reopened a 173-year-old railway viaduct that had previously been derelict. It had been 60 years since trains last travelled on the route. It was opened by Sustrans, using a grant from the Big Lottery Fund, as a new cycleway linking northern parts of the town to the railway station and town centre. That is a fantastic initiative that supports Rugby’s regeneration strategy, and I am sure that the route will be used by many more cyclists.

We have heard about cyclists sharing their road space with other users, and in particular about the problems created by heavy goods vehicles. One Member asked whether something could be done about them. Their impact on cyclists is taken seriously by the logistics industry and the country. I draw the attention of hon. Members to Cemex, a company in my constituency that ships cement around the country. At last year’s Conservative party conference—I hope it was at other conferences, too—Cemex parked one of its vehicles and allowed people to get into the cab so that they could see exactly the blind spot that lorry drivers suffer from when driving. I hope that more and more logistics companies will do precisely that; another one did it at a fête I attended.

I thank the all-party group for bringing about this debate and I look forward to progress on cycling in the years to come.

Rail Franchising

Mark Pawsey Excerpts

Tuesday 26th March 2013 Commons Chamber

[Mr McLoughlin]

There are some open access services, to which the hon. Member for Kingston upon Hull North (Diana Johnson) referred, on the east coast main line. I believe that applications for other open access services are with the Office of the Rail Regulator at the moment. I am happy to look at those and act on advice when I get it from the rail regulator.

[Mark Pawsey (Rugby) (Con)]

Rail users in Rugby will welcome the Secretary of State’s announcement about the Virgin franchise being extended on the west coast main line. Will he reassure my constituents that an extra 29 months will be enough to encourage Virgin to continue to invest in the railway?

West Coast Rail Franchise

Mark Pawsey Excerpts

Thursday 6th December 2012 Commons Chamber

[Mr McLoughlin]

I am grateful to my hon. Friend for rightly pointing out that mistakes and things that go wrong in franchising are not new and that they have happened in the past. As I said, I am awaiting the Brown report, which will tell us about future franchising and will be an important part of our debate on it.

[Mark Pawsey (Rugby) (Con)]

The Secretary of State’s decision today will provide welcome stability to the many users of the west coast main line in my constituency. I know that they will be pleased to be able to continue to travel on Virgin trains. I welcome the fact that, under the interim contract, he is not just maintaining the status quo, but providing improvements, such as a new direct service to Rugby from Scotland for the first time since 2008.

[Mr McLoughlin]

I am grateful to my hon. Friend for welcoming the new services. The simple fact is that the train operators are very much aware of the demand for new and regular services. As anyone who has witnessed today’s statement will know, we are coming under increasing pressure to expand them and certainly not to decrease them.

Oral Answers to Questions

Mark Pawsey Excerpts

Thursday 29th November 2012 Commons Chamber

[Mr McLoughlin]

I know the hon. Gentleman takes this issue incredibly seriously, and although he talks about deaths I think we should look at the seriously injured as well. In the year ending June 2012, there were 1,790 deaths on British roads—a 6% drop on the year before.

[Mark Pawsey (Rugby) (Con)]

The Secretary of State is well aware that those most at risk on our roads are young drivers. I was pleased to see his recent positive comments about placing restrictions on young drivers—for example, on the number of passengers they may carry or the times of day they may drive. Will he indicate to the House how those proposals might be taken forward?

[Mr McLoughlin]

A number of representations on young drivers have been made to the Department for Transport and, as I said in that interview, they are all worth considering and investigating properly to see whether we can reduce the terrible toll that is sometimes caused by young drivers. However, that is not so of all young drivers. We read about the horrendous cases, but not about the many cases where young drivers behave and act responsibly on the road, as do other road users.

West Coast Main Line

Mark Pawsey Excerpts

Monday 17th September 2012 Westminster Hall

[Derek Twigg]

I understand the hon. Gentleman making an important point about his constituency, but faster trains to London were part of the attractiveness of the changes that were made. Where most passengers got on was important in making those decisions, and I am sorry that that disappointed the hon. Gentleman. I was very pleased for my constituency. I have not seen the details of the new franchise, but I hope there will be no attempt by the winning bidder to reduce the number of trains that stop at Runcorn. Merseytravel has pushed strongly for trains to stop at Liverpool Parkway, but we do not want any reduction in the number of trains stopping at Runcorn because of the economic impact the excellent service has on my constituency.

There have been massive station improvements. Mick Noone, the transportation strategic director at Halton borough council, has said the line is

“extremely attractive and well used”.

He went on to say:

“The quality, frequency and reliability of the services have undoubtedly encouraged more people to use the train”.

After years of persistent lobbying by me and Halton borough council, we were able to secure investment for a £650,000 refurbishment programme in Runcorn station. Its tired old 1960s appearance has been upgraded with new cladding, improving the experience for passengers and for my constituents who work there and provide such brilliant service.

[Mark Pawsey (Rugby) (Con)]

The hon. Gentleman’s experience as a former Minister is valuable, and on many occasions he has referred to the substantial public investment in the west coast main line. Is it not that investment itself that makes it important for the Government to go for the bid that gives the maximum return?

[Derek Twigg]

If the Government go for a bid that says it will give the maximum return but it does not stack up, that is a problem. I am glad that the hon. Gentleman made the point about the massive amount of public investment that took place under a Labour Government; it has made a massive improvement.

--- Later in debate ---

[Mark Pawsey (Rugby) (Con)]

It is a pleasure to serve under your chairmanship, Mr Bone.

I would like to speak about the importance of the rail connection to my constituency of Rugby. I am pleased to see the Minister in his place. He will recall, in his former role, standing on a drafty Rugby station platform months before the 2010 general election. The rail connection is of massive importance. We are in the centre of the UK and we benefit from the crossroads of the motorway network. We also benefit from the 50-minute journey time on the existing Virgin service from London Euston. That service has enabled us to attract businesses to our town, where we offer lower wages and lower premises costs than businesses based in the capital. It has also led to a large increase in the number of people who commute on a daily basis from Rugby to London. The quality of the service they receive is fundamental.

The recent history of the line has been one of substantial improvements in service from Virgin. I put on record my thanks, and that of my constituents, and congratulate it on the way it has improved. My predecessors as MP for Rugby would have had a far busier time dealing with constituents on rail issues than I have had. In fact, one of my predecessors, Andy King, the MP from 1997 to 2005, was instrumental in setting up the Rugby rail users group, a campaign body set up to deal with service problems. I often attend that group, but I am not told of significant problems or failures on the line. In fact, in the immediate aftermath of this decision being announced, I went on local radio and advised that there had been no complaints about the service provided by Virgin in the time that I had been Rugby’s Member of Parliament. Somebody got in touch with me to remind me that there was an issue, but it was a ticketing issue rather than a service issue.

We have gone through a very public tender process. We knew that the tender was coming up at around this time; it had been shadowed for a great deal of time, there had been lots of publicity and the requirement was known. When assessing this tender, the Department for Transport would have known that this decision would come under massive scrutiny. I am confident that such scrutiny will have led to the utmost probity in respect of its decision.

As hon. Members have mentioned, the Government have a duty to secure the best deal. They have invested £9 billion in the west coast main line. There is no use trumpeting big numbers if we do not get some benefit from that investment. It is important that we get the return not only to fare payers, as users of the line, but to the taxpayer more broadly.

[Mr Watts]

It is also the duty and responsibility of the Ministry of Defence to get value for money for contracts, but as we know that often does not occur. So what people want to achieve and what is actually achieved can be two different things. Does the hon. Gentleman agree that the GDP factor is crucial? If the GDP figure is halved, will First’s bid still be deliverable? If it is not, surely that may put at risk the whole analysis of this contract.

[Mark Pawsey]

I will come on to the First bid, including questions that other hon. Members and I have put to it about the accuracy of its bid and where its bid stands. I am not sure that making comparisons with other Departments in this debate is helpful, Mr Bone. We need to ensure that the Government get the maximum value for money for every item of expenditure.

[John Hemming (Birmingham, Yardley) (LD)]

As a Birmingham MP I use that train, although, to make a declaration of interest, I came down on the Chiltern line. Does my hon. Friend agree that consideration should be given to whether closing down one competitor may reduce the competitive nature of tendering in future and increase aggregate costs?

[Mark Pawsey]

I am about to talk about my own business experience in tendering. Clearly, the more tenderers available in the tender process, the greater the competition and the better chance of getting the best deal.

The First bid is worth more. I have run a business and, on occasions, have missed out on a contract, so I understand Virgin’s concern. In my business, from time to time we lost contracts, which was particularly frustrating when we were confident in a bid and had given exceptional customer service in recent years. It is appropriate and shrewd business for Virgin to encourage their satisfied customers to make representation through the petition. That activity has stimulated this debate.

It is estimated that 2,000 service users from my constituency are among those who signed the petition. I have received many letters and e-mails from constituents asking me to participate in this debate and drawing attention to the substantial improvements in service that they have experienced over the years. I am happy to do that. There are, of course, those who have not had such a good experience and I have in front of me an e-mail from one of those.

In addition to the increase in revenue to the Government, FirstGroup’s offer contains other positives. My hon. Friend the Member for Milton Keynes South (Iain Stewart) drew hon. Members’ attention to the additional seats and services that would be made available. I can, perhaps, support my hon. Friend the Member for Nuneaton (Mr Jones), because I met the managing director of FirstGroup only last week and he told me that he hoped that additional services might be available between Rugby and London early in the morning, and that access from Rugby to the north-west might be improved through Nuneaton, using Nuneaton as a hub station for the north-west. Innovation and proposals are coming from FirstGroup that were not available through Virgin.

The issue distils down to whether First has got its sums wrong. Did it get something about the maths wrong when preparing its bid—something that it did not take into account? I put that to First’s managing director last week and suggested that, if there were anything about his tender that in the clear light of day—in the light of discussions or ideas coming from Virgin and Opposition Members—he is not sure about, right now, before the new contract is awarded, First has the opportunity to withdraw. It might choose to say, “Yes, there are some points that people have drawn to our attention. We did not quite get our maths right. Our projections in the back end are just a little bit ambitious.” There is a window of opportunity for it to say, “Yes, we got it wrong,” and to leave. It does not wish to take that opportunity.

I have looked the managing director of First in the eye and asked “Are you able to deliver what’s proposed?”, and I am confident that he understands the significance of what he has done. Ultimately, he is part of a management team responsible to shareholders within FirstGroup. If First has got anything about the tender wrong, it needs to be called to account through the courts and be held to the commitment that it has made. It happens in plenty of other businesses; I do not see why that should not happen in this instance.

The delays in the process are unfortunate. Certainly, there is no benefit to anybody, whether the companies, the staff or rail users, if there is a short-term nationalisation, such as has been suggested if First is not able to receive its contract before the judicial process is concluded.

I advise the Minister to please get on with the process. I call on Virgin to withdraw its application for a judicial review. A decision has been taken. Let us get on with it and ensure that we get the right service for rail users in our constituencies.

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Mr Davies.

I congratulate my hon. Friend the Member for West Lancashire (Rosie Cooper) on securing the debate. As has been said, more than 172,000 members of the public have signed the e-petition on the west coast main line franchising decision. This debate, which is a result of that petition and of the good offices of the Backbench Business Committee, has enabled Members to put their points. Many of them represent constituencies that are served directly or indirectly by this important strategic route.

A lot of concerns and other points have been placed on the record. From my experience as an Under-Secretary, I know that the Minister—I welcome him to his place for his first debate in the role—probably will not have enough time, even if he has the inclination, to answer all the questions. However, I am sure that he will undertake to write to those Members he does not get around to answering with the fullest answers, so that we can read what he thinks about every point made.

We have had excellent contributions, first from my hon. Friend the Member for West Lancashire, but also from the hon. Member for Milton Keynes South (Iain Stewart), my hon. Friend the Member for Halton (Derek Twigg), the hon. Member for Rugby (Mark Pawsey), my hon. Friend the Member for Ynys Môn (Albert Owen), the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley), the hon. Members for Shrewsbury and Atcham (Daniel Kawczynski), for Morecambe and Lunesdale (David Morris), for Nuneaton (Mr Jones) and, last but not least, for Stafford (Jeremy Lefroy)—I would have guessed that that was his constituency from what he said. Not surprisingly, that includes many railway towns and constituencies that very much depend on stations on the west coast main line.

Many of the points made are at the centre of the debate arising from the awarding of the franchise. If Virgin Trains had not begun the legal proceedings that are now under way, Ministers would have signed the west coast main line contract before Members had had any chance to debate the issue in the Chamber. The truth is that Ministers probably rather hoped that the issue could have been done and dusted towards the end of the summer recess, with the decision slipped out while Parliament was not sitting and attention was focused on recovering from the Olympics. That is not helpful when we are dealing with a 15-year franchise that will cover several Parliaments. It is right that parliamentarians have a chance to debate the issue, and in that respect I very much welcome this debate.

I am disappointed that the Secretary of State—I congratulate him, too, on his appointment, as I have told him in the Chamber—was so quick to rule out a review of the process that led to this contentious decision. As a new Secretary of State, he would have been perfectly entitled to take the time to read through all the documentation and to have all the meetings. Yet, last week, he told the Transport Committee:

“I am content with the way in which the Department exercised its review of that contract.”

Despite his long-standing experience as Aviation and Shipping Minister many years ago, it is difficult to envisage how he could have conducted anything but the most cursory assessment of his Department’s action in this case. He came to his conclusion very quickly after his appointment, which is a shame. When the Minister meets the Secretary of State, I urge them, notwithstanding the legal process currently under way, to reflect on whether a decision to proceed with the signing of this contract should at the very least await the report of the Transport Committee.

One of the main concerns about the decision is that it seems to be almost exclusively a bottom line one, driven as it is by a particularly high pledge of payments to Government—FirstGroup’s successful bid was £5.5 billion compared with £4.8 billion offered by the incumbent. Obviously, such payments are an important part of any decision; I do not suggest that they should not be taken into account. None the less, there have been reports of the Treasury putting pressure on the Department for Transport, which is not unheard of in my experience, to focus precisely on the headline figure offered. The Department has admitted that it has accepted the bid that offers the largest dividend payment but that also carries with it the greatest risk to deliverability.

Two specific concerns raised by hon. Members relate to the credibility of the predictions of passenger growth and the profiling of the promised revenue payments, which are back loaded towards the end of the franchise period. There is huge variance in the rival claims about the growth in passenger numbers that each company believes to be achievable during the lifetime of the franchise. Virgin’s claim of 49 million passengers compares with FirstGroup’s claim of 66 million. The growth that we have seen on the line during the past decade has been largely driven by the £9 billion upgrade of the west coast main line infrastructure and the introduction of the fleet of Pendolino trains. The investment in track and train has delivered faster and consequently more frequent services. What is likely to drive similar growth in the next period, given that we are not about to have another such upgrade?

The invitation to tender documents also set out significant challenges that will face the west coast operator during the latter period of the licence, all of which could impact on the potential to achieve significant growth in passenger numbers. The most significant is the start of work on High Speed 2 at Euston, which will see the number of platforms for services available at any one time cut from 17 to 14 in order to achieve the rebuilding of that station. Yet it is in the later years of the contract that much of the projected growth is expected to come.

If the growth in passenger numbers is not credible, the only other source of additional revenue is higher fares or a reduction in services, or at least in the quality of services. As one would expect, the successful bidder has given some welcome reassurances on all those issues. The reason that concerns remain is that the Government have included in these new franchises new flexibilities to reduce services, close ticket offices, cut passenger-facing staff and even axe CCTV from trains. Such flexibilities would not enhance service provision were they to be taken up by the successful bidder.

Passengers would welcome clarity from Government on the extent to which those new “freedoms” can be used. Only today, Ministers have announced that they have agreed to requests from London Midland to close ticket offices and reduce opening hours at others, despite months of denying our claims that such measures were being planned. Passengers are nervous about the future.

The invitation to tender also gives the successful bidder significant freedoms in respect of fares throughout the term of the contract. It promises that fares can rise by

“RPI+3%+5% in 2013 and 2014 and then by RPI+1%+5%”.

Consequently, it is possible that some routes could see ticket prices increase by up to 11% for each of the next two years and then up to 8% each year until 2026. If that is to be the only way of meeting the promised revenue payments in the event of the predicted growth not being reached, it is no wonder that many passengers are concerned.

FirstGroup rightly points out that its profile of predicted growth and revenue is very similar to Virgin’s in the first two thirds of the franchise. However, it is the fact that the much higher growth and payments to Government occur towards the end of the franchise that is the cause of the concern. The figures are stark. The profile of proposed payments to Government increases from just £26 million in 2014 to £739 million by 2026.

[Mark Pawsey]

I am listening carefully to the hon. Lady’s argument. What I do not understand is whether, given what we now know, she would have made a different decision from that made by the Government.

[Maria Eagle]

The hon. Gentleman is tempting me, but it is impossible for me to make such a decision on the very low level of information that is in the public domain. As a Minister—I was never a Minister in the DfT, though I was in many other Departments—I had to make decisions like this, but I had to hand significant information––all the documentation and all the lawyers and officials. I do not have sufficient information in this Chamber today to answer that question. I hope he will regard my answer not as evasive but as plain common sense.

It is only in the final three to four years of the 13-year contract that the premium payments promised by FirstGroup exceed those promised by Virgin. The profile of payments goes steeply upwards from £26 million in 2014 to £739 million in 2026. The fear is that that builds in a clear incentive for the bidder to walk away from the contract before the payments are due, not least if the predicted revenue that is to fund the process does not start to appear as expected over the course of the contract and if the predictions turn out to be optimistic. FirstGroup states:

“Any suggestion we may walk away from our West Coast bid is misplaced. We would face considerable damage to our reputation and credibility if we did—and doing so would significantly impact our ability to win further franchises.”

I welcome that reassurance and I am sure that it is made in good faith, but I do not believe that, under the current Government’s approach to franchising, the consequences are as obvious.

In the past year, FirstGroup has exercised a right not to complete the maximum possible length of the contract it holds to deliver services on the Great Western main line, thus avoiding more than £800 million in dividend payments to the Government. I appreciate that FirstGroup would robustly state that that is not the same as walking away from a contract, but what is the same is that it was possible because the promised premium payments were highest during the final three years of the contract. Yet FirstGroup has secured the west coast franchise and it has been shortlisted again for the Great Western contract, so there are no consequences there for what is in effect gaming the system.

I do not accept that it is obvious that FirstGroup has cause to feel that it will suffer any damage, let alone find it harder to win future contracts, from terminating a contract early. Indeed, under Governments of both persuasions—I perhaps need to say under Governments of all persuasions, given that we have a coalition Government at present—we have not seen consequences follow from gaming the system or from failing to meet obligations. Companies have routinely been shortlisted again for franchises and have won franchises even though they have handed back keys or gamed the system to avoid making payments back to the taxpayer.

It is also said that the penalty for handing back the keys early is significant; at £190 million in the case of FirstGroup, it certainly sounds significant. However, put in the context of just one year’s payment to Government being £739 million, walking away does not seem quite such a bad deal if one is focused purely on financial considerations.

If these concerns were just being raised by the losing bidder, we might put it down to sour grapes; indeed, I think that was a phrase that one Government Member used. Clearly there is an element of that driving the judicial review and the challenge that we are now seeing. However, the fact is that many respected people across the industry are dubious about whether the bid that FirstGroup has succeeded with is viable.

Perhaps the Minister would be willing to listen to George Muir, who was the director general of the Association of Train Operating Companies between 1999 and 2008. Writing in Passenger Transport magazine, which is on my reading list, he starkly sets out the reason why there is widespread incredulity in the industry about this contract. He says:

“A 10.4% growth rate produces, in the year 2025/26, revenue of £2,982m out of which is to be paid premium payments to the government £1,696m…and profit to FirstGroup of £149m. Put it this way, in 13 years’ time this fine franchise is to have a profit margin of 62%. Wow! Surreal.

Put it another way, the premium in year 2025/26 is £1,140m in today’s money…and this to be paid by a business with passenger revenue last year of just £824m.

Well, if you believe this, you will believe anything.”

He warns that the Department for Transport

“cannot possibly believe they will get over £1bn, in today’s money, for four years on the trot from FirstGroup. They don’t. It’s a farce.”

Those are not my words, but those of George Muir, who was the director general of ATOC for many years and understands the industry. He is clear where the blame lies—it is in the changes that the Government have explicitly made to franchising since the election. He says:

“The problem goes back to Theresa Villiers’ franchise reform white paper of a couple of years’ ago, which she had been scribbling away in opposition. It reminds me of Andrew Lansley’s NHS reform, crackpot ideas in opposition.”

I stress that those are not my words; I am quoting George Muir.

The Government are right to prepare contingency plans if the legal challenge is not settled by the 9 December deadline for transfer. It would be helpful if the Minister could confirm that the proposal is to transfer responsibility for running these services to Directly Operated Railways. He would have our support for that decision and we would agree that a more appropriate course of action than pursuing the offer from the incumbent to allow it to continue to run the service temporarily on a not-for-dividend basis.

Of course, the Government are also only days away from beginning the tendering process for the east coast main line. The taxpayer received a dividend of £187.7 million from the east coast line in the past year and £170.7 million in the year before that. From next year, that money will go either to private shareholders or to the state railway of Germany if it was to win the contract; it has made a bid for the Great Western contract. I do not believe that the east coast line has been given the stability and certainty to enable us to judge whether a not-for-dividend model could work in the longer term more widely across the rail system. Therefore, I hope that the Minister will be willing to consider our proposal that the east coast line continues to be run as a not-for-dividend publicly run comparator to some of the other companies that are running franchises.

In conclusion, let me be very clear that this issue is not about siding with any particular company, and I do not think that today’s debate has been about that. Having said that, I understand Virgin Trains’ frustration, which it frequently expresses, that it has been runner-up twice to successful bids on the east coast franchise and that the successful companies—Great North Eastern Railway and National Express—later failed to meet their contractual obligations. It is this unfortunate history of franchise contracts being brought to an early end, at least in part because of over-ambitious payment promises that later proved impossible to meet, that has sparked fears that history may be repeating itself. I hope that the Minister wants to ensure that lessons have been learned and I also hope that he will now agree that, even if it becomes legally permissible to do so, he will not proceed further with this contract until there is a chance for the House to receive and consider the forthcoming report of the Transport Committee on this issue.

--- Later in debate ---

[Stephen Hammond]

I am sure the hon. Lady has listened to my contribution, and I am sure she has taken notes, but I have made it clear that, where I am able to answer questions because of the ongoing judicial process, I have answered them. Equally, I have given a guarantee that after the judicial process, where the Department is able to answer those questions, we will provide a written answer. As I am sure she knows, I cannot make a statement that would prejudice the judicial process.

[Mark Pawsey]

Given all that we have heard in this effective debate, does the Minister agree with the majority of Government Members that the interests of rail users, taxpayers and railway staff will be served by the contract going ahead?

[Stephen Hammond]

The Department is confident that we have taken the right decision in the interests of taxpayers and passengers. We expect to sign the contract soon, but we intend to defend the judicial process robustly. Of course, as I said at the outset, it is right that Parliament should scrutinise the franchising process, but there is a right time.

I make it clear that this is not a political decision; it is a commercial decision taken in line with the franchise and procurement processes set out in the reforms of the then Secretary of State, my right hon. Friend the Member for Runnymede and Weybridge. There may be a desire for more extensive parliamentary scrutiny of the process and the bids, but commenting too deeply and changing our decision now could fundamentally undermine any future Government competition, and it would be wholly inappropriate for me to do so.

I guarantee that my ministerial colleagues and I will continue to keep the House and the Transport Committee updated on developments, subject to any constraints of legal or commercial privilege.