Network Rail

Mark Reckless Excerpts

Tuesday 13th January 2015 Westminster Hall

[Mark Reckless (Rochester and Strood) (UKIP)]

Network Rail has a quite extraordinary governance structure. It was set up in that way, as I think almost all parties would agree, with the primary aim of keeping its debt off the Government’s books. However, since a ruling from Eurostat, implemented by the Office for National Statistics here, that debt is now on the Government’s balance sheets, with that decision having been taken finally in December 2013, with the reclassification of the entity taking effect on 1 September 2014.

Last week, when I asked the Secretary of State for Transport whether it was not therefore time to reform Network Rail’s labyrinthine governance structure to make it more accountable, he replied that he would take my question as a representation to cancel the building of a new railway station in my constituency. I fear that exchange probably told us more about the Secretary of State’s character than it did about the governance of Network Rail, hence today’s debate, which follows yesterday’s publication of Network Rail’s report on the post-Christmas disruption. I will focus on two issues—pay and governance—before finally making one or two remarks about Rochester and the applicability of these issues to my constituency.

Yesterday, a report was published by Dr Francis Paonessa, who is the managing director of infrastructure projects at Network Rail. He is paid an annual salary of £425,000 with a further bonus opportunity of 20% of salary. I intend no personal criticism to Dr Francis Paonessa, who is clearly a manager of stature. Before taking his current role with Network Rail, he was the UK managing director of Bombardier, which, under his leadership, secured the important Crossrail contract for building trains, having previously lost out on the Thameslink contract to Siemens. Clearly, running leading infrastructure projects requires a different set of skills, given their complexity, but he replaced Simon Kirby, who moved on to head up HS2 Ltd as chief executive—clearly a huge job, at least potentially. However, the excessive cost structure in the rail industry, led by Network Rail, underlines my party’s belief that HS2 is unaffordable. Half a dozen people at Network Rail, at least, earn similar sums to Dr Francis Paonessa. Mark Carne, the chief executive, earns substantially more. Why has their pay not been cut to reflect the transfer of Network Rail as an organisation from the private to the public sector?

We talk often, as a comparator, about how much the Prime Minister earns, but the numbers of people earning in excess of the Prime Minister’s salary are legion within Network Rail. It has moved from being a private sector to a public sector organisation, and surely we should be told what new standards are being applied in Network Rail following that move.

In March 2012, the Department for Transport wrote:

“As a private sector company, Network Rail sets performance pay levels for its senior staff”—

but it no longer is a private sector company, so who is setting those pay and performance-related pay numbers now? Who are those senior managers accountable to for their pay? Is it the Secretary of State? Is it the so-called members of Network Rail, about which more in a moment, or is it themselves? Mark Carne has announced that he intends to limit his bonus to just 5% of his salary—of course, that bonus will still be more than average earnings across the country and in my constituency.

In particular, we have seen the failures over the post-Christmas period and the disruption that caused to many people across the country seeking to use the network, the extent to which it has become standard to have long-running periods of shutdown over Christmas and new year, the length of some of these infrastructure projects and the closures involved and the lack of predictability about them. In my constituency, we greatly welcomed the new railway station in Rochester, but one point I have from my constituents is why people cannot be warned further in advance about closures, so that they can plan around them.

[Jim Dowd (Lewisham West and Penge) (Lab)]

On the point about the disruption and giving notice in advance, Network Rail had years to prepare for the shutdown of London Bridge station over the recent Christmas period as part of the admirable Thameslink programme. However, they made a huge blunder in organising that, the effects of which have still not been concluded and people’s journeys are still being disrupted. It is not bonuses that the managers should be looking at, but fines.

[Mark Reckless]

The hon. Gentleman makes a good point, which comes back to how these people are held accountable and whether that is through the withholding of a bonus or some other form of discipline, such as a reduction in salary. I do not know whether we are talking about fines, perhaps on a regulatory basis, or whether he is suggesting that it should be on a criminal basis—that would be very strong for such a management role. What I think my constituents and his want is accountability, and we simply do not have that with the current structure.

From 1 September 2014, we have had a new agreement between the Department and Network Rail, but there is, I believe at least, a lack of clarity about what difference that agreement is making in how Network Rail is held to account. Why do we still have these 46 public members and a similar number of industry members, ostensibly playing a part akin to shareholders in this organisation? There was a vote back in, I believe, November 2009. Thirty-six of those members—I do not know whether turkeys voting for Christmas is a fair comparison here—voted to decrease their numbers, but 36 voted against that, and that has remained the situation ever since, despite the Government saying again in March 2012:

“We therefore welcome the governance proposals that Network Rail is announcing, including: reducing the number of members to a more sensible level, thereby improving the quality of decision-making.”

Has that happened?

In the same report, “Reforming our Railways: Putting the Customer First”, the Government said:

“Network Rail is a private-sector, not-for-dividend company, limited by guarantee…we believe the existing structure is capable of delivering the outcomes and the savings we need without disruptive and unnecessary organisational change... equity is a strong driver of efficiency and value for money.”

How in this unique, convoluted, labyrinthine governance structure does equity operate as a driver of efficiency? We have these industry members that the board reports to, to a degree. One might think it is useful perhaps to have that reporting line to the customer, but whenever those customers’ interests are involved, that member steps aside on the basis of there being a conflict of interest, so how can that governance structure work and is it really a sensible way for us to proceed?

In my constituency of Rochester and Strood, we have had the impact of the London Bridge changes. The disruption has affected some people. The sheer length of the closure of London Bridge station for Charing Cross-bound trains that we are currently dealing with is an enormous issue. We have to hold Network Rail to account for the costs that it applies, which are largely passed on in fares to the customer, but also for the length of time that these projects take. I would be interested to hear the Minister’s view. Could she tell us what she has done to ensure that that closure period is as short as possible and the costs are as low as possible? I just have an innate suspicion of an organisation that is not accountable, or at least not in a way that I can understand or in the way in which other organisations are.

The Minister will no doubt refer to the report, published yesterday by Dr Francis Paonessa, explaining away, defending and, to an extent, putting Network Rail’s side of the story in terms of the disruption that we saw immediately after Christmas, but that report is not addressed to anyone. I do not know: is it for the board of Network Rail, for its members, for the Secretary of State or for Parliament? It does not say. There is a foreword by Mark Carne and a whole series of explanations and, to some extent, excuses, but who ultimately holds Network Rail to account for that? Why is it being paid so much money? Why is that disruption allowed, and do we really believe that this labyrinthine governance structure and the costs that we see in this industry are the best we can do? I believe that this country can do it better, and it is time we got on with that and dealt with some of the governance issues at Network Rail and ensured that it works better.

[Douglas Carswell (Clacton) (UKIP)]

rose—

[Mr David Crausby (in the Chair)]

Mr Carswell, it is not in order for an additional Member to speak in a half-hour debate unless they have secured the agreement of both the sponsoring Member and the Minister. Has that advance agreement been secured?

[Mark Reckless]

My hon. Friend the Member for Clacton (Douglas Carswell) spoke to me yesterday, and I spoke to the Minister. I understand that agreement is forthcoming from her as well as myself.

[The Parliamentary Under-Secretary of State for Transport (Claire Perry)]

That is correct, Mr Crausby.

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[Douglas Carswell (Clacton) (UKIP)]

I am most grateful, Mr Crausby. I think that we have a serious problem with Network Rail. Certainly, on the Clacton line, which affects my constituency, weekend works have overrun several times, which has been very disruptive to commuters trying to get to work on Monday mornings. We routinely have problems and failures on the line and we have seen a lot of weekend closures. That is not very helpful to a seaside town that depends on a lot of weekend seaside tourists coming to visit it. We have seen the problems affecting London stations over Christmas.

My main concern is not so much the rail operators, although I think that in the case of Abellio, they have been insufficiently robust in dealing with their supplier, Network Rail. My main concern is with Network Rail. It is to all intents and purposes a public body, which has recourse to public funds and socialised costs, yet it does not seem to be accountable to the public. It seems to have the structure of a public quango, but the bonuses of a bank. What is fundamentally missing is accountability.

Before Christmas, I wrote a letter to the Secretary of State for Transport, asking whether there were any plans to revisit the Network Rail’s governance structure, because it is not working the way it should and, when errors happen, they are not corrected the way they should be. I got a response that I think was probably drafted, if I can put this kindly, by a private secretary who did not understand the question. I then raised the issue on the Floor of the House last week, and I got a response from the Secretary of State that was perhaps dismissive, perhaps contemptuous, but he is not running a Whips Office any more; these are grown-up questions that demand proper, considered, grown-up answers.

There needs to be a rethink of this organisation’s governance structure. I would be interested to hear whether the Minister has given serious thought to how we might change the governance structure of Network Rail. My suggestion is that it should have greater accountability to Parliament. We could perhaps give a role to the Select Committee on Transport, which could confirm the appointment of senior management to this body. Perhaps this body might appear annually before the Select Committee to appeal for its budget. I do not claim to have all the answers. What I know is that the status quo is not working. There is a lack of accountability, and we need real reform. I would love to hear from the Minister how we can do that. How can we ensure that there is real accountability?

[Mark Reckless]

The Government said in March 2012 that Network Rail would invite other companies to compete against its core business. That contestability is perhaps one way to bring market disciplines to the operator. In the same document, the Government said that we could have vertical integration between operators. Perhaps in an area such as Kent, where Southeastern is the main operator, they could work more closely together or even become an alliance or a single body. I just wonder why that is not taken forward. Has my hon. Friend any insights?

[Douglas Carswell]

My hon. Friend’s suggestion is a good one. There are all sorts of models of accountability. There is the proposal for parliamentary accountability. There is the proposal for restructuring in the way that he suggests, which would provide greater accountability. My fear is that we may have spent longer this afternoon discussing new models of corporate governance in this Chamber than the Minister may have done in the Department over the years. I would like to hear from the Minister what specific thoughts she has about changes to Network Rail’s accountability and governance structure.

Network Rail is a corporatist organisation. It lacks accountability. People who try to do the right thing but who have to travel by rail, who have to buy season tickets and travel on the railway to get to work find that the fares go up but the level of service remains poor. Ordinary people feel an incredible sense of frustration that, for all that they do and all that they are forced to do, the people at the top of Network Rail do not seem to be held accountable for mistakes that their organisation makes. We often hear Ministers talking in this place about accountability to Parliament through the Minister. I suggest that that model of accountability is not working and we need a fundamentally different way to ensure that Network Rail is properly publicly accountable. I would love to hear what that is.

[The Parliamentary Under-Secretary of State for Transport (Claire Perry)]

It is a pleasure to serve under your chairmanship, Mr Crausby. I am delighted to have the opportunity to respond to this debate. I congratulate the hon. Member for Rochester and Strood (Mark Reckless) on securing it. This is a really important issue, and he and his colleague, the hon. Member for Clacton (Douglas Carswell), were right to raise it on the Floor of the House last week. I am sure that the constituents of the hon. Member for Rochester and Strood will be delighted with his new-found interest in the railways. It did strike me, in doing some digging, that before last week he had made only two mentions of his local trains in this Parliament. One was to express his profound support for HS2 and what it would do for his constituency, and one was to talk, quite rightly, about the inexcusable fact that constituents on his local franchise were paying RPI plus 3%—a policy that this Government have ended.

[Mark Reckless]

The Government’s ending of RPI plus 3%, for which my constituents were used as guinea pigs, and going to RPI plus 1% and now RPI is a positive thing that I very strongly welcome. Did the Minister consult her right hon. Friend the Member for Chipping Barnet (Mrs Villiers) on the many discussions that I had with her about the railways when she was the Minister responsible?

[Claire Perry]

No, I relied on the public record, which I think it is important to do. In fact, the hon. Member for Clacton has spoken more in the last week on the railways than he has done in the entirety of this Parliament, because I can find no record in the public discourse—

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[Claire Perry]

It would be helpful if I could make a little progress.

The reclassification rightly raises the question what the governance should look like, which is why the framework agreement was published in September 2014. The agreement specifically sets out what the relationship between Network Rail and the DFT looks like, and it tries to achieve two things. First, it tries to achieve a level of operational independence. All political parties, including the hon. Gentleman’s party I am sure, would say that Ministers should not be running trains and that there should be an element of independence and control. [Interruption.] The hon. Member for Clacton is chuntering away from a sedentary position, and I am trying to answer some of the questions. He is not particularly interested in railways, but perhaps he might be after today.

For many people, including the UK Independence party, it is not appropriate to have Ministers and, indeed, officials running the railway network; it is appropriate that Network Rail operates as an arm’s length body. However, it is important to deliver accountability and correct governance and structure. Under the new framework agreement, the Secretary of State for Transport, as a special board member, has levers by which to steer Network Rail, including the right to agree business plans and to approve Network Rail’s remuneration envelope.

[Mark Reckless]

Did the Secretary of State not previously have those powers as a special board member? Are those powers not due to him under Network Rail’s articles of association, rather than under the framework agreement?

[Claire Perry]

The issue is whether they have been exercised, and since this new structure was introduced, they have indeed been exercised. The Department, representing the Secretary of State, has started to do appropriate things such as attending annual general meetings and being involved in board meetings.

[Mark Reckless]

Will the Minister give way?

[Claire Perry]

I will make a little more progress, because the hon. Gentleman has asked a lot of questions.

In extreme cases, the Secretary of State has the power to remove the chair or, indeed, to become the sole member of Network Rail. So what is the role? The Secretary of State determines the rail investment strategy and the statements of funding available, and he works with the Office of Rail Regulation to monitor the timely delivery of major projects. Ministers effectively set the high-level strategic and spending approach to the railways and, ultimately, are accountable for the model of delivery and the operation of rail works for the country and for passengers.

Interesting suggestions have been proposed for improving governance. Crucially—this perhaps has not been conveyed clearly, so let me make it very clear—the Department is completely focused on maintaining and reviewing the appropriate role for governance. If governance needs to change to deliver improvements, it will change but based on the work done up until September 2014, and on the analysis of Network Rail’s board and the role of its public members, the current diagnosis is that it does not need to change to deliver the railway improvements that we all want to see.

The hon. Gentleman asked about the number of public members. As I am sure he knows, the number has been cut from 90 to 45. There was an independent external review of whether those members were carrying out their functions effectively, and it was found that they were performing their duties. On whether there is evidence that Network Rail’s governance is currently failing, it is right to raise those important issues, but I think the diagnosis is that Network Rail’s governance arrangements are working appropriately. We must carefully consider the role of the public members. It could have been said in the past that public members did not have the specific relevant experience to carry out that governance role, but they have now been appointed from relevant sectors and have experience and understanding of corporate governance.

The hon. Gentleman referred to some of the compensation arrangements for senior managers. I am sure, like me, he welcomes the fact that the bonuses paid in this year of Network Rail’s operation will be one tenth of those paid in the last year of the previous Administration. Given that the company’s role in carrying out its business has not changed—as a reminder, it is a company of 35,000 individuals with an income statement of some £7 billion a year, and it has £38 billion of investment proposals to deliver over the next five years— the question for the hon. Gentleman is: how much compensation is appropriate to deliver such highly important investment for the country?

[Mark Reckless]

What has changed, now that Network Rail has become a public sector body and its debt is on the Government’s balance sheet, is that it does not face the market risk of going bust, being insolvent or falling back on itself when its bond obligations cannot be satisfied.

[Claire Perry]

Like me, the hon. Gentleman has a background in finance. He should therefore know that investors will always have considered that debt to have been effectively underwritten by the public sector, so the reclassification is simply a formalisation of what I suspect savvy investors have known for many a year.

There is no evidence that Network Rail’s governance structure is inappropriate or failing. However, I suspect that the hon. Gentleman’s new-found interest in its governance may be a result of the disruption after Christmas at several mainline stations and, more recently, at London Bridge station, which many people living in his constituency use on a daily basis. I am incredibly grateful to him for giving me the opportunity once again to state very clearly what passengers should expect.

The Secretary of State made it clear at the time that the disruption at King’s Cross and Paddington immediately after Christmas was totally unacceptable. In my view, the situation was inexcusable. Passengers deserve a reliable rail service, clear information and rapid help if things go wrong. I am sorry that, in this case, they did not get those things.

Across the industry, we have to be able to trust Network Rail’s ability to complete vital engineering works on time, and it is essential that the lessons that started to be spelled out in the report, which the hon. Gentleman slightly traduced, are learned. Work continues on finding the most appropriate time of year to do engineering works. I say again—this was said last week—that Network Rail carried out its busiest engineering programme ever over this holiday period. There were 2,000 work sites.

[Claire Perry]

I appreciate the hon. Gentleman’s enthusiasm for railways, which marks a rapid change from his former portfolio of interests.

[Mark Reckless]

Answer the questions.

[Claire Perry]

I am keen to answer the questions, if the hon. Gentleman will allow me to proceed.

As I was saying, an unprecedented amount of engineering work went on over the holiday period, because the main driver of problems on the railways is twofold. First, passenger growth is unprecedented. About 1.6 billion passenger journeys are now made every year, twice as many as before privatisation. Secondly, successive Governments have underinvested in the railways for many a long year.

The hon. Gentleman asked about London Bridge station, as did the hon. Member for Lewisham West and Penge (Jim Dowd). That station is 176 years old, and frankly, it has been ignored, although it is one of the busiest pinch points into London. That work is finally being done, so that residents across the south and south-east can transit in and out of London much more effectively.

[Claire Perry]

I agree with the hon. Gentleman; I think that he uses a good adjective. I have visited the station, and my officials have been there. The Secretary of State himself went there during rush hour. We are extremely concerned that the engineering works, which are fantastically overdue, are delivered in a way that does not inconvenience passengers. That gets to the crux of the matter.

This is not a governance problem; it is a failure to work across industry, with passenger benefit front and central. Enormous operational improvements will clearly be delivered by this Government’s unprecedented £38 billion investment in the railways, which is long overdue and will benefit all Members in this room, but it must be delivered by thinking first and foremost about how passengers will use the network and about the benefits for them.

As we saw in the McNulty report published several years ago, the challenge for British railways is to do what we suggested then and join up the objectives of Network Rail and the train operating companies to carry on this unprecedented amount of investment, as we know can be done across the network. I am happy to reassure Members that the Government are committed across the board not only to ensuring operational independence, but, clearly, to delivering better services for passengers in the running of the railways. I am also happy to reassure Members that we remain committed to our huge programme of planned improvements, including the entire rebuild of Rochester station by the end of this year and £120 million of signalling works in east Kent, which I am sure the hon. Member for Rochester and Strood is rising to congratulate the Government on providing.

[Mark Reckless]

I am indeed. I rise to congratulate the Government and Network Rail on the new station in Rochester, which will be fantastic. The Minister talks about working together with the operators. The new station is half a mile or so closer to London, and significant investment has been put into signalling changes. It would be useful to know how many minutes that is likely to knock off train times from Rochester into London. Can Network Rail and Southeastern work together more closely on planning that for the new timetable?

[Claire Perry]

I do not know the answer, but I am happy to find out and write to the hon. Gentleman.

Rail Network (Disruption)

Mark Reckless Excerpts

Monday 5th January 2015 Commons Chamber

[Mr McLoughlin]

My hon. Friend is right that we need to learn the lessons from any such incident. I am not aware of receiving any letters from the shadow Secretary of State before the incident saying that we were trying to do too much. In fact, I am not sure that I had any representations from any Members saying that we were trying to do too much and were too adventurous. My hon. Friend is right that we must learn the lessons and ensure that we do not have similar incidents in the future.

[Mark Reckless (Rochester and Strood) (UKIP)]

Why does the Secretary of State pretend he is in charge when the reality is that the Network Rail board reports to its members—the 46 public members identified by the hon. Member for Kettering (Mr Hollobone)—and a similar number of industry vested interests? Does the Secretary of State not understand that the board was set up in such a way by the previous Government only to try to get borrowing off the books? Now that that has failed, why does he not deal with this preposterous management structure?

[Mr McLoughlin]

As I said earlier, the simple fact is that Network Rail is challenged at the moment with the biggest investment in the railways since the Victorian era. Indeed, in the hon. Gentleman’s own constituency a brand-new station is being built by Network Rail. Perhaps he wants it cancelled; I will take that as a representation.

Road Investment Strategy

Mark Reckless Excerpts

Monday 1st December 2014 Commons Chamber

[Mr McLoughlin]

Yes, and may I say to my hon. Friend how grateful I am to him as although he did not specifically deal with this issue, we did discuss it in general when he was in the Department? He is absolutely right in what he says; we have seen that as far as the railways are concerned—the long-term planning for the rail investment strategy is very important. Likewise, the construction industry will be welcoming this statement as far as its long-term planning is concerned, because it also means that the industry should be able to take on apprentices and plan and train right.

[Mark Reckless (Rochester and Strood) (UKIP)]

Is it right that costs in respect of the Medway tunnel should continue to fall to local council tax payers, when almost every other toll in the country is part of the strategic roads network and, therefore, funded by the Highways Agency?

[Mr McLoughlin]

It is the first time that the hon. Gentleman has made that point to me. It is amazing how things change on various issues. He will no doubt write to me on the matter.

High Speed Rail (London - West Midlands) Bill: Select Committee

Mark Reckless Excerpts

Tuesday 29th April 2014 Commons Chamber

[Mark Reckless (Rochester and Strood) (Con)]

I am pleased to hear the Minister refer to a travelator for efficient and easy travel. He said that the HS1-HS2 link would be an international route and everyone would have to go through passport control. Will he consider the possibility of domestic services regarding a future link? Research from Greengauge 21, paid for by Kent and Essex county councils, among others, suggests that demand for those services would be very substantial and potentially much higher than for international travel.

[Mr Goodwill]

I thank my hon. Friend for making that point. However, having analysed this carefully and brought in Sir David Higgins, who did the work for us and has a wealth of experience in major projects of this sort, we concur with him that the link does not represent value for money and we have therefore scrapped it; the House voted last night to do so. Although there may be an opportunity for the hybrid Bill Committee to consider passive provision so as not to obviate any potential future link, it is certainly not in our plans at the moment—nor, having heard the comments of Opposition Front Benchers, would Labour wish to press for it, should there be, God forbid, a change of Government at the next election.

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[Mr Goodwill]

Yes, I think the hon. Lady has got it right. There is an opportunity, should anyone wish to take it, to petition the Committee to put in some passive provision for a future connection. We have commissioned HS2 Ltd and Network Rail to look at options for better connecting the rail network to HS1, but any conclusions that require powers would not be taken forward in this Bill.

On the carry-over motion, hybrid Bills can be carried over Prorogations because Standing Order 80A does not apply. This is a completely standard part of the process for hybrid Bills, as they generally take longer than public Bills.

[Mark Reckless]

Is one study taking place or two? There is the question whether we have a travelator-type arrangement to connect Euston and St Pancras for passengers going from HS1 to HS2, but is there a separate question of how we connect HS1 to the broader railway network, which may be a case of a train-in-a-tunnel HS1-HS2 link for the future?

[Mr Goodwill]

Those are two separate matters that are mutually exclusive. We are looking at whether better provision can be made for the short journey between Euston and St Pancras for those who wish to continue their journey internationally, or indeed to use King’s Cross or St Pancras for domestic journeys. A separate process is going on whereby HS2 Ltd and Network Rail are looking at how we can better improve the connectivity of HS1. That is being done in the light of the decision to abandon the HS1-HS2 connection, which was very popular in places such as Camden.

The Channel Tunnel Rail Link Bill was carried over two Prorogations. The Crossrail Bill was carried over two Prorogations and a Dissolution for a general election. The House is due to prorogue shortly for the Queen’s Speech—

High Speed Rail (London – West Midlands) Bill

Mark Reckless Excerpts

Monday 28th April 2014 Commons Chamber

[Mark Reckless (Rochester and Strood) (Con)]

I hope that in this debate about high-speed rail the Front-Bench team will not mind my talking about high speed. Of course capacity is extraordinarily important, and we are not just talking about capacity to relieve the west coast main line. The relief that the Y network will give to the east coast main line and the midlands main line is at least as important. I speak as someone whose constituency is dissected by HS1, and we have found that the benefits appear to be much greater than the costs. I speak from that strong perspective. Part of that benefit is down to capacity, but it is also about speed.

It has been of huge advantage to our area that we can get from Ebbsfleet to St Pancras in 17 minutes. Yes, unlike people in Buckinghamshire, we have that intermediate station, but we also benefit from the classic lines which can now take people from Strood to Stratford in 25 minutes and through to St Pancras in 32 minutes. That is bringing in huge amounts of additional people. It is making it much more attractive to come to Medway—to bring in investment, as commercial and professional leaders want to base themselves in Medway. I believe that Birmingham and Manchester will have a similar experience.

If we shorten the journey time from Manchester to London from two hours and eight minutes to one hour and eight minutes, that will be a huge economic boost to Manchester. I find it extraordinary when I hear people say, “Oh, well actually it is going to damage Manchester. It’s going to suck the growth out of Manchester and it will all go to London.” If they believe that, why do they not have the courage of their convictions and argue to slow the line so that it takes four hours rather than two hours?

[Damian Collins]

Does my hon. Friend agree that east Kent has seen real economic benefits—that wages have been rising faster and unemployment has been falling faster than the national average—because of high-speed rail?

[Mark Reckless]

Yes I certainly do agree, and I think that is because of those improved journey times, including to Folkestone. The idea that there would be more jobs in Folkestone if the journey time were two hours rather than one hour, or that if we somehow had a man with a red flag in front of the train that would bring the greatest possible economic growth to the north or to Folkestone, is frankly absurd.

[Mr McLoughlin]

My hon. Friend is making a very good point. He is also making the same point that Sir Albert Bore and Sir Richard Leese would be making to us if they were able to address the House. They are the leaders of their councils and they would say that these lines will bring tremendous benefits to their cities. They are in the best place to know.

[Mark Reckless]

I agree with the Secretary of State. I would add, however, that further benefits to these northern cities and Birmingham could be accrued if we did more than just fulfil the intention of the direct links through to the continent of Europe. Although I understand why the previously proposed way of doing that has not gained support, I hope that we will still look at the possibility of reinstituting a direct connection between HS1 and HS2, and that when we look at the costs and benefits of that we look not only at the benefits to the north of being able to get through to Europe, but at the benefits for people from Manchester or Birmingham of being able to go directly through to east London, Kent or East Anglia from a connection at Stratford. The work Greengauge 21 did on that shows that the benefits will be huge. Yes, there would be benefits for my constituents and people in east London from being able to go from Stratford or Ebbsfleet through to Old Oak Common and on to the north, but a connection would also significantly add to the benefits for people coming from Birmingham and the north. I hope we will look at that.

I believe that there is scope within this Bill to make such improvements. From listening to some of the opponents, it is as if they assume that the costs are going to spiral out of control and that the benefits are all grossly exaggerated, but when I look through the work and the detail of the estimates and calculations, they strike me as extraordinarily conservative.

We have learned the lessons from the great infrastructure projects of the past. If we consider Crossrail or the Olympics, we see it is possible to deliver projects to time and to budget, and possibly faster or cheaper. Part of the reason for that is the very big estimate for contingency. Some people criticised, and we have heard Opposition Front Benchers saying that perhaps they would not support a project if costs were spiralling, but actually a substantial contingency had been factored in: £14.5 billion of the £42.6 billion is contingency. It is not contingency in order to get to our best estimate of what the cost is going to be; the contingency has been padded to the degree that we are 95% certain that the cost will come in below the number given. It is expected that more than £4 billion of that contingency will not be used, so perhaps some of that could be put towards providing a decent quality link between HS1 and HS2, to everybody’s benefit.

[Mr Straw]

Is the hon. Gentleman further reassured by the fact that this project is led by Sir David Higgins, whose estimates for the Olympics, including a substantial so-called “optimism bias”, turned out to be entirely accurate?

[Mark Reckless]

Yes, I am reassured. I consider there to be a degree of pessimism bias in this case; £700 million has been taken out for the link and it has just been absorbed into even more contingency. I think that the contingency is much too high and that the project will come in significantly below the estimates, and that is just on the cost side. We must also look at the benefits side. We have heard a lot of talk about working on trains and how things are calculated, but there is something much more important when we are projecting the growth in traffic and looking at the benefits.

Over the past 10 years, long-distance rail travel has grown by 5.2% each year on average, yet we are assuming that in the future it is going to grow by only 2.2% per year. I do not understand why there is suddenly to be this collapse in the growth rate for rail traffic, and it is on that basis that projections are made. Furthermore, we are assuming that once we get to 2036, only three years after the project has been completed, there will be no further growth in traffic at all. If we had some more realistic calculations on both costs and benefits, we would see that this becomes an even more attractive project. I believe that it will be more attractive still if we have a proper link between HS2 and HS1, bringing benefits to all.

High-speed Rail

Mark Reckless Excerpts

Monday 24th March 2014 Commons Chamber

[Mr McLoughlin]

Sir David has made a recommendation to me and I am asking for work to be done on it. It is right that I then consider that alongside the representations that have been made by other cities in the north as part of the final consultation process. I am still engaged in that process, and I will do so.

[Mark Reckless (Rochester and Strood) (Con)]

I am all in favour of better links with Europe, at least in this context. Does the Secretary of State accept, however, that most of the demand for an HS1-HS2 link will be domestic? Will he learn from the sub-optimal interchange at Stratford and consider installing a travelator to get people quickly and easily between St Pancras and Euston?

[Mr McLoughlin]

One of the problems at the moment is that people cannot get to the northern cities by high-speed trains, yet they can get to Europe in that way. I want the people of Birmingham and Manchester to have the same opportunities as those who wish to travel from London to Paris or London to Brussels. My hon. Friend is absolutely right about the need to have a good link between Euston and St Pancras. Sir David says in his report, and has said to me, that that can be done at a much more efficient rate than what is currently planned under the High Speed 1-High Speed 2 link, which will now be removed from the Bill.

Transport Infrastructure

Mark Reckless Excerpts

Tuesday 17th December 2013 Commons Chamber

[Mr McLoughlin]

That matter is now in the domain of the Welsh Assembly. I am due to meet its Transport Minister, who will no doubt want to discuss the issue, some time in the new year.

[Mark Reckless (Rochester and Strood) (Con)]

Can the Mayor of London expect any Government money to promote his imaginative proposal, and if so, could we also have some in Medway? Given that the page numbers in the Secretary of State’s report are different from those I got from the commission, can he shed any light on the late change in the report to include a Grain option and tell us whether meetings with the Prime Minister and the Chancellor last week played any part in that?

[Mr McLoughlin]

It is true that my report did not come off a PDF document, but I am not sure whether the page numbers differ from those in the report received by my hon. Friend. How the Mayor of London spends the considerable amounts of money that he has at his disposal is a matter for him.

Aviation Strategy

Mark Reckless Excerpts

Thursday 24th October 2013 Commons Chamber

[Mark Reckless (Rochester and Strood) (Con)]

An estuary airport strategy would be binary and lumpy. The proposal is for one massive new airport opening at a single point in the future, but it would run the risk of being half-empty when it opened, and in the meantime we would have none of the capacity we need now.

It is ridiculous to suggest, as the Mayor of London did, that we could build such an airport in the same time it would take to add one runway to an existing airport. And all the while, the economy is suffering. The Stalinist command-and-control-economy assumption that we could move hundreds of thousands of jobs to the Thames estuary at the stroke of a Mayor’s or even a Government’s pen is preposterous: many of these jobs would not move, many would move to Europe and many others would no longer be economical, because the capital and investment on which they depended would be destroyed. The assumption that all the hotel and business infrastructure around Heathrow could be rebuilt, cost-free, in the estuary airport is wrong. If people had to pay twice for that, many fewer jobs would survive.

We hear from the Mayor of London that Heathrow could become like Kensington and Chelsea or Canary Wharf, yet he has just been to the old airport in Hong Kong, which, 15 years on, is still a shell, with next to no development, in one of the fastest-growing economies in the world. Boris told me that if he proposed this seriously, he would come down to look at the Thames estuary and the Hoo peninsula, in my constituency, where he wants to build it, but he has not come, so I can only assume that he is not serious. The Davies commission, which did come, was absolutely astonished. It thought, having listened to Boris, that it was like a blank sheet of paper, but there are more than 23,000 people living there, nine villages and some of the most important energy infrastructure in the country.

I am pleased at least that Transport for London has recognised that we could not use HS1 to access that new airport—it would not have the capacity and there is no where to put the trains at St Pancras—yet, like Fosters and Partners, which is in the clouds as much as my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), it is saying that there could be three other substantial railway projects, including a parallel new high-speed line. Even those three projects would not provide the local access to work for the people coming into that airport, which would require further tunnelling under the Medway towns to get those people across the two river pinch points.

Crucially, given the level of environmental protection in this area, legislation states that there must be an “absence of alternative solutions” even before we can consider building such an airport. It cannot be a credible option, therefore, if it has already been determined, as the Davies commission must, that there are other credible options.

I heard that the scheme would cost £80 billion, but the Deutsch Bank aviation analyst tells me it would be £120 billion. Of that, up to £30 billion would be public money. It is absolutely extraordinary. It is incredible. I do not think any Government would fund that. What about the private money? Ignoring all the new investment, we would still be looking at about another £50 on every ticket for anyone who used that airport. What a blow to business that would be!

As to its operational viability, National Grid said that

“the proposals being put forward for a Thames Hub Airport on the Grain peninsula are incompatible with the energy infrastructure”.

The fog is three times what it is at Heathrow and the risk of bird strikes is twelve times as high. The delivery risks are absolutely enormous.

We have heard a lot about Heathrow, but what about Stansted, which we have also heard about? It needs better train service connections. Perhaps even our Lib Dem friends would support those extra train connections to allow the half-empty runway to be better used. Gatwick should be strongly considered, too, because it has the money. It would only cost £5 billion to £9 billion —about one tenth of the Thames estuary airport—and with the improved train connections, particularly the Thameslink service to London Bridge and, crucially, to Farringdon, it would be a credible option and provide competition.

Vehicle Registration Marks

Mark Reckless Excerpts

Thursday 31st January 2013 Commons Chamber

[Mark Reckless (Rochester and Strood) (Con)]

I declare an unpaid interest as a vice-chair of the European secure vehicle alliance, an associate parliamentary group. It is a pleasure to follow the hon. Member for Birmingham, Selly Oak (Steve McCabe). He made use of a prop, which I have not seen in the Chamber before, but it was a very interesting prop. My only objection to it was that the Union Jack identifier was concealed.

One might have thought that I would focus my remarks on the single most important issue within the vehicle registration mark regime, which is the requirement for us to have the European flag on all our licence plates. However, given the Prime Minister’s speech last week and the fact that we can now look forward to an in/out referendum on our membership of the EU by 2017, I no longer feel the need to concentrate my remarks on that area.

I will therefore follow up some of the points made by the hon. Member for Birmingham, Selly Oak, particularly regarding the position of the police on these matters. I am grateful to him for sharing with me some of the material that West Midlands police have helpfully provided. The police have highlighted historical issues with the existing VRM regime for many years, and they have recommended a system of secure anti-tamper plates—for example, riveted to the body of the car—that should be available through limited approved suppliers. The problem, though, is that the Department for Transport has responded to the police by rejecting their recommendations on the basis, at least according to West Midlands police, that they are unable to prove that the increase in theft of registration plates is linked to criminality. I find that an extraordinary position, and perhaps the Minister will be able to give an explanation.

I am concerned that the real explanation is that those within the industry who benefit from the current regime have too strong an influence within the Department for Transport and that the concerns of the police, and indeed the wider interests of the consumer, hold insufficient sway. It does not strike me as a sensible way of organising the regime to have, as the hon. Gentleman said, a major manufacturer such as 3M providing the high-value element of the number plate, and I suspect that the value, or cost, is far higher than it needs to be. It is in the interests of that multinational that our market should be dispersed and broken up with very large numbers of suppliers, given that the sum involved is relatively small for each person in the industry, such that competitive pressures do not come to bear to reduce the price at which it can sell the reflective piece of equipment, nor is the market opened up to other competitors to the benefit of our consumers.

If we are not worried about the consumer, as we should be, we can at least look at the position of the police. The suggestion that the increase in the theft of number plates is not linked to criminality is really rather preposterous. In 2007-08, West Midlands police found that their monthly average number of thefts was 250. By 2011, that figure had increased to 425, 20% of which involved thefts from vehicles. It is for the Department for Transport to prove its view that this practice is not associated with criminality. West Midlands police gave a whole list of examples of how it is associated with criminality, such as legitimising the use of a stolen vehicle, disguising a vehicle’s identity to use it in crime, false reporting after a speed camera activation, walking away from offences such as road traffic collisions without reporting them, and escaping congestion charges and insurance premiums. Potentially, it could be associated with road-use charging. I am not sure that I approve of the hon. Gentleman’s position on that, but I understand that it is to be used on the Dartford crossing.

One of the obvious ways in which stolen number plates are used is for theft-of-fuel offences. As the Department for Transport supposedly wants evidence on this, I am delighted that in February 2011 West Midlands police commissioned a case study across the whole of Birmingham which found that 153 thefts of number plates were reported, of which 43, or 30%, were subsequently used in theft-of-fuel offences. I think that that is clear evidence that the increase in theft is associated with criminality.

From the police perspective, the argument is that change is long overdue. There is a security-related argument for limited suppliers, which could be a lot cheaper, and, in particular, an argument for riveting plates to vehicles in order to make it much more difficult to steal them and then use them to support a whole other range of criminality.

Before I conclude, I want to raise a wider issue than vehicle registration plates. The current system includes the British Standards Institution and various committees chaired by individuals who have clear vested interests that are different from those of the consumer and the wider community. Is that a sensible way to run things? Should not the system be opened up, where possible, to competition and, where not, to at least a degree of scrutiny from Ministers?

--- Later in debate ---

[Stephen Hammond]

I shall try to answer that question later in my speech. If I cannot do so, I will of course write to the hon. Gentleman with the information.

The hon. Gentleman was right to highlight the concerns expressed a few years ago when a single manufacturer, Hills, developed a system of printing that had the unforeseen side-effect of making the number plate text unreadable by automatic number plate recognition—ANPR—technology. He was also right to point out that concerns still exist. Hills was the only manufacturer using that system, and the manufacture of those plates has now been stopped, but there is still an unknown number of those so-called transparent plates in circulation. The Department for Transport estimates that, in the worst-case scenario, up to 5% of all cars could be unreadable. However, we have reasonable evidence that the actual numbers are somewhat smaller. None the less, that development needed to be stopped immediately, and it has been. Most of the transparent plates were fitted to fleet vehicles, which are eventually sold into individual ownership, at which point the plates are routinely swapped for regular, opaque ones. That is one reason that the number might be lower. There were no concrete rules to stop companies employing that process, but that has now been remedied.

[Mark Reckless]

The manufacturer in question, Hills, was owned by 3M. Is the Minister concerned that there could be a conflict of interest, in that that company, which is well served by the existing registration market, has an executive chairing the relevant British standard that enables the continuation of that market?

[Stephen Hammond]

My hon. Friend leads me neatly into the next section of my speech, in which I shall address the issue of the British Standards Institution review. My predecessor committed to looking into that, and the hon. Member for Birmingham, Selly Oak has asked me for an update. I am pleased to be able to tell him that we are seeking to change BSI standard BS AU 145(d), which covers the reflective quality of number plates. Recent advances to ANPR technology mean that the cameras are finding it more difficult to read older number plates. The hon. Gentleman will know, not least because we debated the HGV Road User Levy Bill in the House on Tuesday, that ANPR is now used increasingly for many aspects of managing the road network, including the enforcement of congestion charging and the HGV levy, as well as for detecting and preventing crime.

A committee was set up to improve standards and it was given an 18-month programme of review supported by my Department and by the Home Office. It is rightly using wider industry expertise. I hear clearly the point made by the hon. Member for Birmingham, Selly Oak and by my hon. Friend but, had we not used that expertise, one of their colleagues might have challenged me by asking why we had kept the review to civil servants. Once the committee has made its recommendations—they will be published and consulted on in late spring—I hope both hon. Members will respond to them, and point out any outstanding issues. The committee has done some rigorous work, however, and I hope its findings will offer some reassurance. I think that they will help to maintain confidence in the number plate regime, tackle vehicle excise duty evasion and improve safety.

It was suggested that the introduction of a more secure number plate system would support the sale of cherished plates. To meet the widespread interest in attractive personalised and cherished registration marks the DVLA has since 1989 been operating a sale of marks scheme, a special facility allowing motorists to acquire and retain the use of particular registration marks that have not been previously issued. More than 3.8 million registrations have been sold, which has generated over £1.8 billion in revenue. The revenue raised this financial year currently stands at just over £49.5 million, with a total of 166,00 registration marks being sold through the DVLA. The scheme is clearly popular with the motoring public, therefore.

It is recognised that there remains an issue in that some keepers of vehicles will attempt to flout the law by displaying registration marks in an incorrect format. All such formats will have been supplied by an illegal supplier, however, so they would already be on the register. Those suppliers would therefore be acting illegally already.

[Stephen Hammond]

Not all cherished plates fit into that category; indeed, the vast majority of them do not. Some cherished plates might even have our initials on them—I can envisage “NE 1” being one of the great number plates of our time, Mr Deputy Speaker.

The DVLA and the police take the matter of misrepresented registration marks very seriously. The misrepresentation of registration marks can make vehicles difficult to identify and hamper police efforts. Those who have misrepresented their registration plate have already committed an illegal offence. It is a criminal offence to alter, re-arrange or misrepresent the characters of a vehicle registration mark in a way that makes it difficult to distinguish the registration number. Offenders are liable to a maximum fine of £1,000.

I am surprised and baffled by the comments of my hon. Friend the Member for Rochester and Strood, because neither I nor my officials recognise the remarks he attributes to us. If he tells me the source of those remarks, I will certainly look into the matter, but while I am prepared to accept that the Department may have made those remarks, we do not at present recognise that.

[Mark Reckless]

My remarks were a statement of the position of the Department for Transport as characterised by the West Midlands police.

[Stephen Hammond]

That may have been characterised in all sorts of different ways, of course, but I am happy to discuss the matter with my hon. Friend later.

Over the last century, the number plate has incorporated several security features to reduce the misrepresentation, cloning and fraud that some drivers engage in. My predecessor in the Department instituted the British Standards Institution review. We have some challenging issues to face, but I am aware that the integrity of the number plate regime system is absolutely crucial to road safety, as well as to tackling road crime.

In conclusion, I cannot promise that we will move to a single supplier system, but we will—

Rail Fares

Mark Reckless Excerpts

Wednesday 5th September 2012 Commons Chamber

[Maria Eagle]

No.

What is the consequence? It is that the Government and the House do not have the ability to enforce the cap on fare rises they think they have approved. I therefore hope that we can all agree today that the cap should be precisely that—a cap, a maximum allowable increase.

Our motion also calls on the Government again to reverse their decision to increase the cap from RPI plus 1 to RPI plus 3 for 2013-14. This should not be a contentious proposal, and I hope that Members on both sides of the House will feel able to support it. I know that it is slightly devalued today, but Government Members might like to look back at the commitment they made in the coalition agreement:

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

It simply is not credible to square that pledge with the decision taken to increase the annual cap on fares from RPI plus 1 to RPI plus 3.

Let us be clear who is benefiting from these excessive fare rises: the private train companies. I urge the new Secretary of State to ask his civil servants for a copy of a very good report—on his Department’s spending settlement and its progress in implementing it—recently published by the National Audit Office. It warns that the Department for Transport has failed to demonstrate that higher fares translate into payments back to taxpayers:

“There is a risk that the benefit of the resulting increase in passenger revenues will not be passed on to taxpayers fully, but will also result in increased train operating company profits.”

So there we have it. We know who benefits from fare rises: the private train companies.

[Mark Reckless (Rochester and Strood) (Con)]

Will the hon. Lady give way?

[Maria Eagle]

I am seeking to make some progress. If there is time, I will give way a little later.

I know that some hon. Members may think, “All well and good: these private companies should be able to make these very large profits for running our rail services.” However, I wonder whether Government Members have been keeping track of who has actually run our rail services since privatisation. For example, the Chiltern and CrossCountry franchises are run by subsidiaries of Deutsche Bahn, the German state railway. Southeastern, London Midland, TransPennine and Southern are all run in partnership with subsidiaries of SNCF, the French state railway, while Greater Anglia and Northern rail services are run by a subsidiary of Ned Rail, the Dutch state railway. Let us be clear: the ability of so-called private train companies to hike fares beyond the cap does not just mean additional profit, as the National Audit Office has warned; it means additional dividends from those profits going back to the state railways of France, Germany and the Netherlands. The consequence is that fares on their domestic rail networks are, on average, a third lower than those on ours.

--- Later in debate ---

[Maria Eagle]

No, I will not.

Why is a 3% above inflation increase acceptable this year, when it was, in the Chancellor’s words, “too much” last year?

[Mark Reckless]

The hon. Lady asks why an RPI plus 3% increase might be acceptable, but this Government have not increased any rail fares yet by RPI plus 3%. The only RPI plus 3% increase happened on the Southeastern franchise under the last Labour Government, because we were used as guinea pigs.

[Maria Eagle]

The hon. Gentleman is simply wrong about that. RPI plus 3% was cut last year to RPI plus 1%, but the year before it was RPI plus 3%, so what he says is simply inaccurate.

If anything, pressures on household budgets have increased in the past year. Families are finding it even harder to make ends meet, get through the month and pay all the bills. We are in a double-dip recession made in Downing street. More than 1 million young people remain out of work. Energy, food and fuel prices are all up, adding to the pressures facing our constituents. The rate of inflation—the RPI figure that will be used to calculate January’s fare rises—went up to 3.2% in July. With flex, the formula for January’s fare rises, as it stands, is 3.2% plus 3% plus 5%, which means fare rises of up to 11.2%. We should get rid of flex, but we should also—as the Chancellor said less than a year ago—set the cap at 1% above inflation.

I know that the Secretary of State has been appointed to change some of the policies pursued by his predecessor—at least that is what the newspapers say. However, I hope that on this issue he will agree with the right hon. Member for Putney (Justine Greening), who told the Financial Times last month:

“I am keen to see what we can do to keep fares down to something affordable. I will be looking at whether there is a way of doing this in the autumn.”

She added that

“she did not know if the Treasury would make funds available to do this,”

but said:

“If you don’t ask, you don’t get, so I’ll make sure to ask.”

If the Secretary of State has not already done so, I hope that he will be asking the Chancellor to agree to the lower cap on fares, because as his predecessor rightly said, “If you don’t ask, you don’t get.”

--- Later in debate ---

[Maria Eagle]

I am in the middle of answering the hon. Member for Gillingham and Rainham (Rehman Chishti).

The current Government are proposing an across-the-board increase of RPI plus 3% on everyone, whether or not there is any improvement in investment or any increase in service. At a time like this, when people’s incomes are being squeezed badly, it is not easy for them to cope with that. We should not continue with those levels of increases.

[Mark Reckless]

rose—

[Dr Huppert]

rose—

--- Later in debate ---

[Gordon Henderson]

I share the hon. Lady’s concern because my constituents have a similar problem. The franchise agreement with Southeastern also set out the level of subsidy that it would receive. That is important because the subsidy started at £139.9 million in year one, reducing to £24.7 million by year seven. In year eight, Southeastern will be expected to pay a premium of £9.3 million to the Department for Transport. It does not take a genius to work out that if the Government expect Southeastern to pay them a premium, rail fares will have to rise to fund it.

Who negotiated that franchise agreement? The Labour Government did. Indeed, their stated policy was to recruit more of the cost of the rail service from those who use it, rather than relying on the general taxpayer to subsidise it. It is, therefore, hypocritical in the extreme for Labour Members to complain now about a system of rail fare pricing that they introduced and supported. I greatly fear that spiralling rail fares will have a detrimental effect on commuters in my constituency, and will directly hit hard-working families who are already struggling. The increases will hit even harder people who have recently lost their jobs, such as those at Thamesteel who will have to commute some distance to find a job.

[Mark Reckless]

Does my hon. Friend agree that this is particularly difficult because Kent has some of the lowest average incomes in the south-east yet some of the highest commuter fares? The hon. Member for Brighton, Pavilion (Caroline Lucas) mentioned costs in her constituency, but the cost of commuting from Chatham, which is only 30 miles away, is about £100. Brighton is almost 50 miles away, yet the cost is almost the same.

[Gordon Henderson]

I agree with my hon. Friend. The cost per mile of rail travel from our part of Kent is one of the highest in the country, and commuters in my constituency have had to put up with that for a number of years. That is the issue I wish to address, and I welcome the Transport Secretary’s offer to meet Kent MPs. Although he is not present in the Chamber, I assure him that at that meeting I will press for help for commuters in my constituency.

As I said at the beginning of my remarks, I am in a difficult position. I support the sentiment of the motion but oppose the motive behind it. For that reason, I will abstain, as I hope will all my fellow Kent MPs.