Wales and Borders Franchise

Paul Maynard Excerpts

Tuesday 7th November 2017 Westminster Hall

[The Parliamentary Under-Secretary of State for Transport (Paul Maynard)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I congratulate the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) on securing this debate. He has taken a long-term interest in this issue, as indeed have the hon. Members for Dwyfor Meirionnydd (Liz Saville Roberts) and for Ynys Môn (Albert Owen). I hope that I can provide some reassurance. I realise it is tempting to provide a running commentary on these issues, particularly when one is not involved in the negotiations, but I hope that I can set the mind of the hon. Member for Carmarthen East and Dinefwr at rest. He has asked many questions on the issue, both of me and in the House more generally, so I know he is very knowledgeable on these matters.

I start by reassuring the hon. Gentleman that we are committed to devolving rail powers to the Welsh Government, as we stated in 2014. The devolution of these powers takes forward one of the Silk commission’s recommendations and is an important part of the St David’s day Command Paper that he referred to. Like him, I want improved rail services for passengers in Wales. I always focus on the output for the customer, not just the input into the train set.

Last month, we saw the launch of the invitation to tender for the next Wales and Borders franchise. I agree with the hon. Gentleman’s comments about the previous franchise. It was a very good example of some of the flaws of the earlier franchising models, and one that we hope to learn from in setting out what we aim to do with this franchise. I am sure he will recognise that it is one key milestone among many on the journey towards a new franchise.

It may help if I set out the other milestones that we seek to achieve. First and foremost, we hope that bidders will respond by 21 December this year to the ITT. The evaluation will take place over January and February, and between March and June 2018 there will be a contract award by the Welsh Government, signed on 13 June 2018, we hope, with a new franchise commencement date of 18 October 2018.

We have a clear set of timelines ahead that we are looking to achieve. I remain committed to supporting the Welsh Government in progressing with the procurement of the next Wales and Borders franchise to make sure that it does indeed commence in October 2018. I also repeat our commitment to progressing with the procurement of an infrastructure provider for the south Wales metro. I am sure that the hon. Gentleman would agree that devolution cannot be a simple task, and it is worth reminding ourselves of what the Government are actually doing. We have seen tireless work by officials, both here and in Cardiff, to give effect to the formal transfer of powers, which had required the resolution of a number of very detailed policy and practical considerations, particularly around cross-border services, but I am pleased that we have been able to agree the broad principles under which that devolution should happen. This will see Welsh Ministers’ statutory powers in Wales supplemented by powers exercised on behalf of the Secretary of State.

These proposed arrangements will, for the first time, enable Welsh Ministers to procure a franchise that, like the current one, includes important cross-border services to and from parts of England, as well as services entirely within Wales. I am sure the hon. Member for Carmarthen East and Dinefwr will agree that it is in Wales’ economic interests to have a strong set of cross-border connectivity, not least to Manchester airport to the north of Wales, and to London along the Great Western main line to the south of Wales.

Both the hon. Gentleman and the hon. Member for Ynys Môn raised the point about not-for-profit services. As they will understand, because this franchise involves cross-border services, the nature of the contracting vehicle cannot be a decision solely for the Welsh Government. That is why a not-for-profit solution, tempting though it may be to hon. Members, is not necessarily appropriate in this case.

[Jonathan Edwards]

Will the Minister give way?

[Paul Maynard]

I will give way just once, but I am keen to make sure that I answer the hon. Gentleman’s questions.

[Jonathan Edwards]

I am grateful to the Minister for giving way. Can he explain why, if it is indeed his Government’s intention to improve the transport links between Wales and England, they have taken the treacherous decision to cancel the electrification of the main line all the way to Swansea?

[Paul Maynard]

The hon. Gentleman is almost tempting me to give another 10 minute speech on how to improve rail services for passengers. I am afraid, as ever, that he falls into the trap of focusing on how we power the trains, and not the benefits for the passengers. As he will be aware, if the 40 miles from Cardiff to Swansea were to be electrified, that would have a cost-benefit ratio of less than 0.3, with no added benefits for passengers—not a single extra seat, mile per hour of the train, or minute off the journey time. As he will also be aware, the National Audit Office and the Public Accounts Committee have been clear that the Department needs to consider each electrification project in isolation to ensure that it still represents good value for money.

It is my duty as Rail Minister to focus on how to deliver the benefits for passengers in south Wales, including in his constituency, and to bring those benefits forward as soon as possible. That is what we are doing with the Intercity Express Programme trains that are already in operation. When electrification to Cardiff is complete, that will save 15 minutes on the existing journey time. Electrifying further to Swansea would not reduce that journey time by a single minute; nor would it add a single seat to any one of those journeys.

[Albert Owen]

The Minister makes an important point on the not-for-profit issue. He will know that the Secretary of State for Transport has the power, if a franchise were to go wrong, to operate it directly from the Department for Transport, which would run the franchise. Are those safeguards in the devolution settlement, so that the Welsh Government could take over if the franchise were to go wrong? That is very important. They could be a not-for-profit organisation, and that could lead to investment back into the railways.

[Paul Maynard]

The hon. Gentleman is right to identify the importance of the operator of last resort. Discussions are still ongoing with the Welsh Government, but those will need to be concluded before we lay the transfer of functions order before Parliament, which I am about to come to. If he bears with me, he will find out the answer shortly.

I reiterate the importance of ensuring that the Secretary of State has some duties relating to journeys in England. English passengers will be travelling on those trains, perhaps even between two English stations, so it makes sense for the Department for Transport to have a degree of oversight. It is worth further recognising efforts on both sides, in Cardiff and Whitehall, to make sure that we continue to draft the transfer of functions order appropriately. This very detailed set of functions—I gather more than 40—will need to be transferred under existing railway legislation. Technical work is progressing well, and I anticipate that the order will be laid before Parliament early next year. The proposed order will be subject to the affirmative resolution procedure in both Houses, so Members of this House can be assured that they will have the opportunity to scrutinise the detailed provisions. I am confident that we are on track to complete the transfer of franchising powers in Wales and other necessary agreements over the next few months, in good time for Welsh Ministers’ planned award and commencement of the new franchise contract.

Much positive and practical work has been done by both Governments in readiness for these responsibilities. As the hon. Member for Carmarthen East and Dinefwr identified, Transport for Wales has been established to help deliver both the new franchise and the south Wales metro project. As a Department, we are providing extensive support to help to progress all its aims and ambitions. He will no doubt be aware that the procurement process is already well underway. He referred to some of the bidders, and mentioned Arriva. It might be worth my explaining to hon. Members that every owning company in the country has only one bid team. When there are multiple franchise competitions at any one time, it can stretch the resources of individual owning groups, which may be participating in more than one competition at any one time. So I would caution against reading too much into Arriva’s specific decision on the Welsh franchise.

Both our Governments have worked together to deliver a series of milestones, most recently the ITT. Importantly, this has been facilitated by an agency agreement with the Secretary of State, whereby the Welsh Government published the ITT on behalf of the Secretary of State. Over the coming months, my officials will continue to work with Transport for Wales to develop the day-to-day franchise working arrangements to ensure that they are fit for purpose under the new contract.

I recognise the ambition that many stakeholders in Wales have to discover more about what the invitation to tender will contain and what the likely shape of the future franchise will be. I share that ambition; I am always keen to look at what the outputs for passengers are, and not just at the inputs might be. The hon. Gentleman will be aware that the Transport for Wales document, “Rail Services for the Future”, gives some indication of the future direction the franchise will take; but I am sure that like me, he would welcome more information from the Welsh Government about service enhancements that may or may not be proposed as part of the future vision.

I recognise that concerns exist that the rolling stock is not as good as it could be. That is always an important part of any part of franchise consideration, but I must reiterate that decisions about rolling stock will now be taken by the Welsh Government. I share the hon. Gentleman’s frustration about the fact that Pacers remain on our network. I very much hope that we take this opportunity to see the back of them, as we are doing on the northern franchise, for example. They are long past their sell-by date. I recognise the need for new rolling stock, but that will have to be a decision taken by the Welsh Government.

I continue to urge a collaborative approach with the Government in Wales. I am sure that the hon. Gentleman, as a Plaid Cymru Member, will judiciously judge both sides’ performance with equal criticality of eye. All options need to be considered in the development of future services, and I remain optimistic that passengers will see big improvements delivered in the next franchise, which will have to include devolution of the core valley lines infrastructure in some way, shape or form. We are committed to £125 million of investment as part of the wider deal in south Wales. I recognise the importance that the Welsh Government attach to their ambitions in this regard, and hope that we do all that we can to support them in that. I also recognise the ambitions for Cardiff station. Although predicted passenger numbers to 2043 show an increase, there is a particular issue in Cardiff around sporting and entertainment events, and I know that more thinking is going on in that regard.

We have already discussed Cardiff to Swansea, but it was important that our decision on that be accompanied by a commitment to work with Network Rail on how we can deliver further journey time savings both on the line out as far as Pembrokeshire and on the north Wales line, and to look at what other improvements we can make around the Swansea-Cardiff corridor.

It is worth stating clearly that we recognise that electrification can bring benefits to passengers; therefore, we do not rule it out on any stretch of the network, but it has to deliver benefits for passengers. There has been a tendency to regard electrification as the gold standard, but that is not always the case. Often, the benefits that accrue from electrification are because parallel infrastructure works deliver the journey time savings instead. I caution all hon. Members about assuming that if somewhere is not on an electrified line, it is a second-class destination in some way. That is very far from the case. Anyone who has travelled on the new IEP trains will see that they are very much state of the art. I do not think passengers on them notice when they change from diesel to electric power. They are high-quality rolling stock with 130 more seats per service and, when electrification is complete, journey time savings of 15 minutes.

I hope I have explained where I believe the process of the franchising and devolution to be. I have no doubt that the hon. Gentleman will come back with more questions in due course—I would expect no less from him—but I hope that that gives him enough to work on for the moment. I thank him for his time, and thank you, Ms Dorries, as well.