Tees Valley Rail Transport

Mike Penning Excerpts

Tuesday 24th May 2011 Westminster Hall

[The Parliamentary Under-Secretary of State for Transport (Mike Penning)]

It is a pleasure to serve under your chairmanship, Mr Benton. I pay tribute to my hon. Friend the Member for Redcar (Ian Swales) for securing this important debate. Having a debate on the day before a recess is always dangerous, but he managed to encourage some of his colleagues to attend.

I was in Teesside only recently. I went there by train from London to visit Teesport, which comes within my portfolio. I have been asked to respond to the debate because my hon. Friend the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), whose portfolio covers regional and local transport, is not here. He has asked me to apologise for his absence.

The points that my hon. Friend the Member for Redcar raised cover myriad modal shifts in how to get passengers and freight off the roads, and how better to use available facilities. It was fantastic news for the region when the Tees furnace was reopened, and certainly the new owners, whom I had the privilege of meeting, were thrilled. What was obvious when coming in by train was the unbelievable number of sidings that have not been used for a considerable time. I am the Minister with responsibility for freight, on whatever mode, and it always hurts to see that investment sitting there unused. It may have been made many years ago, but the concept was right.

The port, which is under new ownership, has a huge footprint, and not all of it has been used as well as we would like. There are contamination issues, as I am sure my hon. Friend is aware—the new owners of Teesport, however, have good and imaginative ideas, especially in some of the areas to which my hon. Friend alluded—such as problems relating to moving larger containers around. A particular issue in this country is that we cannot move many of them on our canals, which are a great asset, but difficult to use.

My officials have written a brilliant speech for me, but if I read it out, which I am sure is what they would like me to do, I would fail to pay tribute to the contributions that we have heard this afternoon. Investment for the area was planned before the new coalition Administration came to power, and before we realised how bad the economic situation is. I will not go through how bad it is, because everyone knows the situation. The £4.9 million that was drawn down has been well spent, and the stations at Hartlepool, Eaglescliffe and Thornaby have benefited.

I am pleased to hear that the new owners of the airport have sensible ideas for expansion, and how to increase their market share and put the airport on the map in the UK, but that will require investment. They will have to look at their business plans, and create a market that drives people to use it. I was fascinated to hear private companies saying that they would like to put passengers back on that line. They are obviously thinking of doing that because there is a need. The Government may help and, as my hon. Friend knows, two funds have been drawn down.

Sadly, Tees Valley Unlimited was not successful in the first tranche, because it needed to be much better at proving what the economic benefits in terms of jobs would be from drawing down from that fund. Tees Valley Unlimited has discussed the matter extensively with my officials. They have met eight or nine times recently, and I urge them to have further meetings, because the key to both funding plans is that the community comes together, and that a proper business plan is drawn up to create the right climate for further investment in the area. I will not go into the semantics of what it should be called. I have enough problems deciding when to call my football team Spurs or Tottenham Hotspur, and my town Hemel or Hemel Hempstead. It is for local politicians to discuss the matter over a pint on another occasion.

However, it is important—I am sure that this has been discussed—that the area is branded in the right way so that investment comes to the area, and there is no confusion about that brand. The first time I flew to what was Speke airport in Liverpool, I looked for Speke on the departure board, but it had been renamed John Lennon. I had no idea that I was going to Liverpool. When a brand name is used for a community, it must be what the community is looking for. I am sure that the new name was discussed in great depth before it was introduced, but whenever I spoke to people in that part of the world, and especially when I was at Teesport, there was confusion. When I quoted my brief, they did not understand what I was talking about until I talked about Teesport, the Tees area and so on.

There is real scope for local authorities to come together, and to consider joint bids. It is crucial as we go forward with the localism agenda, to which the Department for Transport is fully committed, that local authorities are not parochial and say, “This is our borough, and we won’t join together.” They must have confidence in their area and say, “We know what’s best for our community, and exactly how to generate jobs and go forward.” Four local authorities would probably need to join together to formulate a plan and to give them confidence to return to the Department for Transport, as well as to other Departments, because transport will not be the only issue.

[Ian Swales]

I want to pick up the point about local authorities. Five are involved: Stockton, Hartlepool, Middlesbrough, Redcar, Cleveland, and Darlington. The Minister can be confident that they are speaking with one voice on such issues, because Tees Valley issues and transport infrastructure cross all five. One reason why the local enterprise partnership got going so quickly was that it was heavily backed by those five local authorities.

[Mike Penning]

I am new to this area, and I may not be back if I make a mess of it, but my brief refers to the four Tees Valley local authorities. If that is wrong, I will arrange for my Department to write and apologise. When talking about local areas, branding is important.

In the next six months, passenger transport executives, groups of local authorities, and local enterprise partnerships should come together to discuss whether they want to take greater responsibility for such services. That is crucial when discussing where they are going, and how. There will be some central Government funding, but not as much as we probably all want, but local communities, especially through local enterprise partnerships and so on, will have much more say in what is done, and there will be an early opportunity to shape the future and destiny of local rail services. We have been discussing bits and bobs, but the discussion should be formalised with a shopping list of what should be done first, what should be done second, and what should be done third.

If we read my hon. Friend’s speech tomorrow morning, and the points that he made—I apologise for this and I am not being critical—will we know what the priorities are, and what needs to be done in the short term, the mid term and the long term? Communities and LEPs must come together to decide that. I am not being critical, but that must be done.

On cost, the McNulty report, which was commissioned by the previous Administration, addresses fares, and the fact that, if we are not careful we may jeopardise the great success—this is not party politics—of the railways today. There are issues about capacity and cost, and whether we are driving people off the railways and into their cars. That is important: we must address it in the franchise agreements and remove bureaucracy. McNulty acknowledged that the way in which the railways operate involves a huge amount of bureaucracy and cost, and in international terms they are very expensive. He estimated that £1 billion of savings could be made without damaging infrastructure, while at the same time encouraging people to use the railways. That will be a difficult task, but anyone who has had anything to do with railways—I am involved purely in freight, which is more successful now than it was—must address the fact that the state can provide only a certain amount of money for new lines. There is only a certain amount of railway capacity for the freight industry, and we must look carefully at how we can encourage a better modal shift and not have so much long-haul freight on the railways.

On today’s network—without High Speed 2 and the lines to the north-east and north-west, which would release more rail capacity—even if we increased rail freight to full capacity we would still struggle to get freight off the road. One of the huge successes in the Teesport region has been made by Asda and other supermarkets that are building what I consider to be the beginning of a renaissance in coastal shipping facilities—I apologise for naming Asda, but it is the store I visited. Bigger and bigger box ships are coming into big, deep-water wharves, but our roads do not have the capacity to move those goods around.

The most efficient way of moving freight anywhere in the world is by sea. We are a maritime nation with over 90 ports in state and trust ownership, yet we do not properly utilise those ports and their capacity. At the Asda hub, all the products that arrive come in by sea. The distribution is then worked out, and followed by what Asda describes as a limited “road bridging” system. That system is beginning to be replicated around the country. I was in the north-west the other day at Stobart’s rail hub. Stobart has developed such a system, not because it wanted a rail hub, but because its clients—Tesco, Sainsbury’s, Asda; we could name all the supermarkets but I probably should not—have said that they want goods to travel shorter distances. That area is developing.

The rail industry is underused. We have spoken about lines that need to be better utilised, and the railways are a huge facility that we could use to create a modal shift in transport locally through the hubs. The Asda scheme has been a great success, and it is looking at expanding it. It is a badge of honour for the local community and local authorities in that part of the world to facilitate the scheme and understand the needs and demands of their communities. We should also use other lines, especially if we can deal with the problem of bridges, and I know that discussions on that are taking place.

At the same time, we must be honest about what is likely to come in and out of the ports. As my hon. Friend said, if a line is working, it is crucial that it is used. It is much cheaper to use that line in a better way than to rebuild a line or put track back down. A lot of residents—I know this from my constituency—will have moved to live close to a railway line after the track was removed, and there will be an interesting debate about whether those lines should be put back. Those people no longer live next to a railway and without doubt, having a railway at the end of the garden or in the community impacts on people’s lives. That debate would be interesting; it would not be wrong to reopen the line, but such matters take time and must be managed correctly in the communities.

The use of Westminster Hall for a debate such as this is important. Concerns and ideas can be bounced into the arena, and Ministers will respond. I am conscious that I have not answered all the points raised by my hon. Friend the Member for Redcar, and by my hon. Friend the Member for Stockton South (James Wharton) in his intervention, but the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes, will write to them and answer all their questions. If a further meeting with a Minister is needed, the door will be open.