High-speed Rail

Phil Wilson Excerpts

Tuesday 10th January 2012 Commons Chamber

[Justine Greening]

I hope that I can provide reassurance. We have certainly developed the calculations on costs in line with Treasury guidance, which is very conservative. Of course I will be aiming, if at all possible, to have the project come in under budget, although I suspect that there will also be others who will have to manage the costs over the coming years.

[Phil Wilson (Sedgefield) (Lab)]

I commend the Secretary of State’s statement this afternoon. Is she aware that the High Speed 2 announcement could bring benefits to the north-east of England almost straight away? Hitachi Rail Europe, which wants to build its train factory in Newton Aycliffe in my constituency, has announced that it will bid for the rolling stock to be made there when the time comes, which could bring jobs to Durham, the Tees valley and the north-east of England.

[Justine Greening]

The hon. Gentleman points out the very welcome investment from Hitachi in his area. Combined with the unprecedented investment that the Government are making in our railways today and in future, which I have announced today, that bodes well for creating more jobs building rolling stock in the UK.

High Speed 2

Phil Wilson Excerpts

Thursday 13th October 2011 Commons Chamber

[Dr Huppert]

As ever, I am delighted to agree with everything my hon. Friend says. Her constituents will benefit and the scheme will eventually need to continue, and I hope that it will be sooner rather than later.

There have been debates about the economics of High Speed 2, and I think we all agree that it is absolutely right that we scrutinise them. The solution to our chronic capacity problem must deliver value for money. We have heard debate about the exact facts and figures. The ones I have seen place some reliance on or about the generation of 40,000 jobs and £44 billion for the economy, but the real economic impact of high-speed rail lies in changes that are harder to quantify. For far too long we have focused on London and the south-east, and it is key that high-speed rail helps to address that problem. High-speed rail will enable businesses in our major cities to compete with those in the capital and south-east. It will provide larger talent pools and more potential clients, improve domestic tourism and help us to rebalance our economy away from the City.

We also need to look at the issue raised by the hon. Member for Wirral West (Esther McVey)—rail freight.

[Phil Wilson (Sedgefield) (Lab)]

Will the hon. Gentleman give way?

[Dr Huppert]

I am afraid not; I do not have enough time.

The number of container freights on a north-south axis has grown by 56% in the past eight years, leaving freight services, particularly around Liverpool, in a complete bottleneck. There are companies that would like to use rail freight much more, but simply cannot find the space to put the containers on the railway. We constantly have this tricky balance between keeping commuter services for those travelling to London and ensuring that businesses in the north have access to the freight services they need. We need both. In an advanced country that cares about sustainable growth in every region, this is not the trade-off we need.

I wish I had more time to talk about the environmental consequences, but I would hope that all hon. Members agree that decarbonising domestic transport is a crucial measure that needs to be taken and that modal shift is important in achieving that. A shift of 6 million air trips and 9 million road trips on to rail is definitely a significant step forwards.

High-speed rail is not some idealistic dream based on shaky, long-term assumptions; it is a logistical imperative. High-speed rail is vital for the long-term sustainability of our country’s infrastructure. The arguments for it heavily outweigh those against it, and I am delighted that the Government are taking it forward. I look forward to working closely with the Department for Transport, the Minister and other stakeholders to ensure that this project goes ahead and provides value for money for taxpayers and passengers alike, as well as providing the sustainable and efficient transport infrastructure that Britain is desperately lacking.

--- Later in debate ---

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

It is a pleasure to be able to contribute briefly to this debate. A number of points have been made by other hon. Members, including my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz), and I will not repeat those. However, I wanted to have the opportunity to make a couple of other points, particularly about Scotland.

First, I want to make the point clearly that better transport links have many and varied benefits for business and the wider economy, and that is as true in Scotland as it is in other parts of the United Kingdom. Sectors of the economy that are particularly important in Scotland—finance, tourism and the food and drink industries—respond positively to improvements in transport links. That is part of the case being made by business organisations, trade unions, Glasgow city council and Edinburgh city council, and a range of bodies in Scotland that very much support HS2. The hon. Member for Wirral West (Esther McVey) is no longer in her place, but I accept her point that a high-speed network alone does not draw business to the UK, and is not the complete answer. However, it is an important part of the answer, for Scotland as well as for the rest of the UK.

I wish to discuss the points made by the hon. Members for South Northamptonshire (Andrea Leadsom) and for Banbury (Tony Baldry) about the 40,000 jobs that would be created across the UK during the construction phase. I think I am right in saying that they both intimated that those jobs would be in the south-east of England. I say to both of them that that is not my experience of the jobs associated with other projects. For example, London 2012 work has gone to construction firms based in Glasgow, Edinburgh, Aberdeen, Carlisle, Manchester, Newcastle—and, no doubt, many other places.

[Phil Wilson]

It is not just the route and its construction that are important; the rolling stock is important too. Hitachi, which is going to build a rolling stock factory in Newton Aycliffe, in my patch, has already said that it will bid to make the rolling stock for this route. That means that the north-east would benefit even before the route actually got to the north-east of England and created thousands of jobs.

[Tom Greatrex]

My hon. Friend makes an important point, and I thank him for his intervention. What he says is also true of other firms—for example, those in my constituency that make the toughened glass for the windows of the rolling stock. A range of other supply chain benefits will accrue to a number of industries and companies, and will help to increase employability and skills in the economy.

Secondly, I wish to discuss the environmental impact. I do not want to talk about the number of trees that will be planted along the line, but there is an environmental impact and benefit through getting people to shift from air to rail. From my constituency it is about a 90-minute flight between Glasgow and London, and I have to admit that I fly more often than I probably should. Even when we take into account the time taken getting to and from airports, flying is still quicker than using the fastest of the trains on the west coast.

Intercity Express and Rail Electrification

Phil Wilson Excerpts

Tuesday 1st March 2011 Commons Chamber

[Mr Hammond]

As I have said, my right hon. Friend the Secretary of State for Wales and I will continue actively to look at the case for electrification to Swansea. I said that we would do so in the light of developing service patterns. The important point is that once the valleys lines are electrified, it is quite possible that new electric services could be provided that head through Cardiff and to the west, which might change the economics, and thus the business case, for the Cardiff to Swansea section.

[Phil Wilson (Sedgefield) (Lab)]

I congratulate the Secretary of State on his announcement on the intercity express programme. As he knows, the investment and jobs involved are very important for my constituents in north-east England. Will he join me in congratulating the Back on Track campaign, which was led by The Northern Echo, Durham county council, the chamber of commerce and the northern TUC? Will he also congratulate my constituents on the way in which they brought this matter to the attention of the Department for Transport, and helped it to make the right decision?

[Mr Hammond]

I am happy to acknowledge the hon. Gentleman’s tireless battle for the IEP. He has arranged for various worthies from his constituency to visit me and the Department to make the case. This has been a complex process with legal, technical, financial and commercial issues to resolve. We have worked closely with Hitachi to get to this point. I understand that he wanted us to get here more quickly, but I assure him that we have progressed as fast as possible.

Rail Investment

Phil Wilson Excerpts

Thursday 25th November 2010 Commons Chamber

[Mr Hammond]

The release of rolling stock from Thameslink will provoke a cascade through the system so that Thameslink vehicles will be available for use on other lines. In some cases they will displace diesel units that will become available for use on still further lines. At the bottom of the pile, some old rolling stock is likely to be retired. By releasing large numbers of carriages into the pool we expect to change the market dynamics for leasing rolling stock, making it cheaper and therefore more affordable for the taxpayer and passenger alike.

[Phil Wilson (Sedgefield) (Lab)]

The Secretary of State knows that if the Agility train project goes ahead it will create thousands of jobs in north-east England, including hundreds in my constituency where the trains will be built. If that does not happen and the door is slammed on north-east England—if the other option is chosen—will the contract have to go out to retender, thereby causing further delays while the tendering process takes place and delaying the intercity express programme further?

[Mr Hammond]

As I have said, there are complex legal and commercial issues to consider. The hon. Gentleman will understand as well as anyone the process of negotiating with Agility trains as the preferred bidder and that everything we do has to be within the constraints of the European procurement directive.

Transport (Investment)

Phil Wilson Excerpts

Tuesday 26th October 2010 Commons Chamber

[Mr Hammond]

I commend my hon. Friend for his tenacity. I know that he campaigned on this issue for many years before he arrived in this place, and he will no doubt continue to campaign on it for many years to come. The scheme is not currently on the list that I have published today and, as I have said to other hon. Members, it will be some time before we open the list to additional bids for future spending review periods. I do not want to encourage local authorities to spend significant sums of taxpayers’ money on schemes that I know we will not be able to fund in the foreseeable future.

[Phil Wilson (Sedgefield) (Lab)]

On “Question Time” last week, the Secretary of State raised expectations in the north-east on the Intercity Express programme and the potential for the building of a factory by Hitachi in Newton Aycliffe in my constituency. How long will we have to wait for a decision on that? It has raised expectations in the area, but will we get a response before Christmas?

[Mr Hammond]

I hope so. I said at the beginning of my statement, but perhaps I was being obtuse, that other major rail projects are under consideration, and I hope to be able to make an announcement to the House in the next few weeks. The Intercity Express programme is one of those under consideration. As the hon. Gentleman will know, it is an extremely complex package of projects, and the new bid that we have received from Agility Trains requires careful analysis at a technical, financial and legal level. That work is ongoing, and once we have completed it, I will be in a position to make an announcement.

Inter-city Express Programme

Phil Wilson Excerpts

Wednesday 15th September 2010 Westminster Hall

[Phil Wilson (Sedgefield) (Lab)]

I asked for the debate today to give voice to the north-east’s campaign to ensure that the inter-city express programme is allowed to go ahead, due to the economic impact it would have on the region. It would have profound implications for the north-east because the investment would be the biggest in the north-east since Nissan in the 1980s. That is how important it is, not only for the north-east, but for the rail infrastructure and the UK economy at large. Hitachi has already said to me in writing that the preferred site for the factory to manufacture the trains would be in Newton Aycliffe in my constituency.

My area’s involvement in the railways goes back to their beginning. Locomotion No. 1 travelled along the railway line a few hundred yards from the potential factory site on its way to Darlington in September 1825 to start the Stockton and Darlington Railway. That is how long my area has had its historic relationship with the railway. For something like 160 years, train building was a massive industry in south Durham, just a few miles away from Newton Aycliffe at Shildon wagon works, which closed in 1984 with the loss of more than 2,000 jobs. The inter-city express programme provides us with the opportunity to bring train building home.

In 2007, the Department for Transport issued an invitation to tender to transform the UK’s inter-city train services and replace the outdated diesel high-speed trains that have provided the service since the 1970s. Agility Trains, a joint venture between Hitachi and John Laing, won that contract. Agility Trains will deliver state-of-the-art super-express trains based on the highly successful 395 Javelin trains in Kent, which have recently won a Passenger Focus independent survey for being the best trains. Hitachi also manufactures the bullet train in Japan.

If the programme goes ahead, Hitachi will build a purpose-built factory in my constituency alongside the second largest industrial estate in the north-east. The best way of describing the inter-city express programme is as a service and supply contract to provide new trains and a dramatic improvement to the inter-city services on the east coast main line between London, south Wales and the south-west. The contract was privately financed and managed on a pay-as-you-go basis, which means that payments are not due until the trains are delivered in 2015, after the next election. The cost of the service is spread over 27 years of operation, with payments made on a per train, per day basis. Payments depend upon delivery of a clean, reliable and fully serviceable train, thereby ensuring that the interests of the supplier—Hitachi—and the passengers are aligned.

The programme will deliver a significant increase in seating capacity, a reduction in journey times and a huge increase in reliability and comfort without need for hugely expensive track upgrades. It will also mean that passengers will be able to travel on trains that do not dump toilet waste on the track. We need to move on from the Austin Allegro era of technology.

On 26 February 2010, a written ministerial statement said that Sir Andrew Foster would subject the inter-city express scheme to a value-for-money assessment. On 6 July, the Secretary of State for Transport published the results of that assessment:

“Sir Andrew suggests that the inter-city express proposition is ‘positive and attractive’ in a number of ways. He suggests that the PFI-style funding arrangement is novel and well aligned in terms of financial incentives. The faster acceleration and longer carriages would have a positive impact on network and passenger capacity, and the specification has also taken network sustainability and environmental imperatives seriously.”

Sir Andrew raised some technical questions about the trains, but the Secretary of State said:

“I see this as a lesser issue”.—[Official Report, 6 July 2010; Vol. 513, c. 10WS.]

Hitachi has been working closely with the Department since July regarding the issues raised by Sir Andrew, and I am sure that they can be resolved. It wants to simplify the bi-modal technology for example, to bring down costs. Bearing that in mind, the economic case for the inter-city express programme to go ahead is significant.

Not only will the programme bring improved rolling stock to the railway infrastructure, which is required in the 21st century if the economy is to grow, it will also mean so much to the economic growth of the north-east. The programme helps fulfil the Government’s stated aim of rebalancing the north-east economy in favour of private sector growth. Public financial input will not be needed until after the next election, and will be recouped through the innovative financial formula Hitachi has drawn up.

Some argue that it should be left to the train operators to acquire the trains they need, but, surely, economy of scale means that this proposal is the cheaper option, and it offers sufficient volume to attract a major manufacturer to the UK. Therefore, it goes some way towards meeting the Government’s stated aim of growing the private sector—something we all want to see—and Hitachi will put in the investment up front. If the inter-city express programme goes ahead, and I know that the Minister cannot give an answer today, Hitachi has said that its preferred site is Newton Aycliffe. In a letter to me, it stated that, on a range of criteria, including required land size, test track availability, road access, proximity to deep sea ports, local labour availability and flexibility, and ease of business with local and regional agencies and authorities, County Durham and Newton Aycliffe scored highly. That is a tribute to the people of Newton Aycliffe, to local decision makers, and to the north-east’s ability to attract foreign investors, of which there are 500, about 100 of which are in County Durham.

However, what benefits will Hitachi bring to the region? Some 800 direct jobs; up to 9,000 jobs in the supply chain, seven out of 10 of which will be in manufacturing, mainly in the region but also nationally; and for every £1 of investment there will be £48 return over 20 years. Hitachi will start building a £90 million purpose-built factory next year. Some 200 construction jobs will be generated, and private sector investment precedes any public sector investment, which will be over a 20-year-plus period. Over two decades, the region will benefit in net gross value added terms by £660 million, and Teesport will also benefit because some components will be imported from Japan.

The inter-city express programme will replace the rolling stock on the east coast main line. As someone who uses the east coast main line weekly, I know that the rolling stock needs replacing. At present, demand outstrips supply on the line. With rail travel from the north-east to London costing three times as much as flying, and as there are no longer flights from Durham Tees Valley airport to Heathrow, but only from Newcastle, there is an acute problem that needs to be remedied. The new carriages with extra passenger capacity will help to resolve the problem.

The 800 jobs will help to pump much needed expenditure into the local economy through wages. Newton Aycliffe town centre is going through a period of regeneration, and the boost to the local economy that Hitachi offers will help see the local shops boom and breathe new life into the town. Newton Aycliffe has the skills that Hitachi requires. The recent global economic downturn has seen many people with those skills put out of work. The initiative will help to put those idle hands back to work.

I have said that the initiative will match some of the Government’s stated objectives—rebalancing the north-east economy in favour of the private sector and providing work to those who have skills, as well as offering apprenticeships to our young people who do not have those skills. The Government want to create 2 million private sector jobs in the next five years, and this initiative will help to do that. The programme is private-sector led. Hitachi has also committed to using local suppliers first and foremost. If it goes ahead, the investment and the presence of Hitachi will provide the north-east with the largest private sector investment since Nissan 25 years ago.

The issue has united the north-east in a campaign to ensure that the inter-city express, and Hitachi’s presence in Newton Aycliffe, goes ahead, and to put the case for the region. The groups that have got together to do that include: North East chamber of commerce; Durham county council, with the support of the leaders of the Conservative and Liberal groups, as well as the controlling Labour group; the Federation of Small Businesses; the northern TUC and Unite. They have come together to promote the importance of this project to the north-east. The Northern Echo is running a “back on track” campaign because this is so important to local people. A petition launched by the partners is attracting thousands of signatures.

The Secretary of State for Transport has kindly agreed to meet a delegation of business people from the north-east next Tuesday so that we can again make the case for the opportunities that the proposal will provide for the north-east. The partnership has produced a report stating the north-east’s case for the inter-city programme to go ahead, and I sent a copy to the Minister earlier today. I hope that she found it useful. The north-east has learned over the years to stand up for itself, and is saying “We’re here and we can do the job.” Hitachi, one of the biggest companies in the world, has faith in the region, and I hope that the Government also have faith in it.

The right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) said:

“I welcome Hitachi’s interest in building rolling stock in the North-East, and I very much hope the project will go ahead—it would bring enormous benefit to our region.”

In a letter to me, the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk) said:

“I am pleased that Hitachi has announced publicly that it intends to establish a new train assembly plant in the UK, should the Intercity Express Programme go ahead. We recognise that this would represent a significant boost to the economy in your constituency. This is to be welcome.”

The Foreign Secretary said in a speech in Tokyo on 12 August:

“I am…here to announce the significant new emphasis that the British Foreign Office will give to providing direct support to the UK economy, helping British business secure new opportunities in the emerging economies and putting our diplomatic weight behind British enterprise as well as helping to bring Japanese and other investors to Britain.”

He went on to say:

“We will work alongside British businesses and the rest of Government and other Governments around the world to use our political influence to help to unblock obstacles to commercial success”.

The Secretary of State for Transport met the president of Hitachi, and the Japanese ambassador, and talks have taken place between our Prime Minister and the Prime Minister of Japan because the issue is so important for bilateral relations.

I understand that a decision on the programme will be made as part of the comprehensive spending review. Will the Minister tell me whether the announcement will be part of the statement, or ancillary to it? How are the talks with Hitachi going since the Secretary of State made his written statement in July? How does the Department’s position marry up with the Foreign Secretary’s position that everything must be done to attract Japanese companies to Britain, and to remove any obstacles to that? What prospect does the Minister see for the north-east’s economy if the proposal does not go ahead?

I am not a deficit denier, but one way of solving the problems of the deficit is to increase the economy by increasing the private sector. The inter-city express programme and the Hitachi plan for locating in the north-east would do just that. When the decision on the inter-city express programme is eventually made, I hope that those who make it know the difference between slimming and starving, because starving the north-east’s economy is not the answer.

I am here today to promote the interests of my constituents and those of the north-east. There is great support in the region throughout businesses and parties. I hope that the Minister will consider these representations when her colleagues make the final decision on the inter-city express programme, and that they make the right decision. I believe she knows that that is to let the project go ahead.

--- Later in debate ---

[Phil Wilson]

Does the right hon. Lady agree with me that the answer is not to give the existing rolling stock a lick of paint, but to invest in the infrastructure? The rolling stock has been around since the 1970s, and the technology that we have brought on board through Hitachi is cutting-edge. The trains that it uses are comparable with the Javelin ones used in Kent, which are some of the best in the country. The kind of technology that Hitachi wants to bring on board is suitable for people in the north-east of England and elsewhere who would benefit from it.

[Mrs Villiers]

I can assure the hon. Gentleman that the respective merits of the different options will be carefully and rigorously considered before a decision is made. This entire debate will be a helpful contribution to the decision-making process.

The hon. Gentleman mentioned that the Secretary of State for Transport has met the president of Hitachi, as has the Secretary of State for Business, Innovation and Skills. I have discussed the project with the former Japanese Minister for Transport, and the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane (Mr Browne), discussed the matter on a visit to Japan. We are taking the concerns of the Japanese Government on board in discussions on the process. Agility’s proposals are due shortly, and they are likely to include plans to standardise the design of the new trains, as was recently reported in the railway press. I am also advised that Agility expects to offer a significant cost-saving, while still meeting the specification that it was originally asked to meet. We will then be able to complete our assessment of both the IEP and the credible alternatives on an equal footing.

In conclusion, I would like to assure the hon. Gentleman that the Government will take into account the representations that we have received from him today, and the representations in the report that he has submitted to us, along with those that he and colleagues have made in the past. The decision on the future of the IEP will be made on the basis of the fullest possible evaluation of all the relevant matters. I am, of course, well aware that the recent period of uncertainty has been a cause for concern to those with an interest in the project, such as the hon. Gentleman and his constituents, and the Government really appreciate the patience shown by all concerned, not least Agility Trains. However, there is a complex interaction between the IEP and other key programmes under review as part of the comprehensive spending review. In light of that inescapable fact, it seemed impossible to make a sensible and objective decision on the IEP in isolation from the conclusions that we have to reach on those other interdependent projects, and from the overall decisions on the resources available for transport infrastructure.

Although the stage that we have reached means that I cannot give the hon. Gentleman all the answers on the programme, as he has kindly acknowledged, the Government are anxious to resolve the matter, and we will convey the decision to the House as soon as we can, as part of the spending review process in October. I thank the hon. Gentleman again for his contribution, and I look forward to continuing discussions with him on the subject. As I say, we will report to the House as soon as is practical regarding this decision, which is crucial not just for the north-east but for the future of the railway network in this country.

Oral Answers to Questions

Phil Wilson Excerpts

Thursday 22nd July 2010 Commons Chamber

[Mr Hammond]

The previous Government commissioned a report from Sir Andrew Foster, which has now been delivered. It was a detailed piece of work containing a lot of recommendations, and one of Sir Andrew’s suggestions was that we should review the possibility of an upgrade and life extension of the existing 125 fleet. That is one option that we will consider during the pause that I mentioned.

[Phil Wilson (Sedgefield) (Lab)]

If the intercity express programme survives the comprehensive spending review, Hitachi intends to build the trains in Newton Aycliffe in my constituency, creating hundreds of jobs there and thousands in the manufacturing supply chain. It would be one of the biggest investments in the north-east since Nissan. Would the Minister be prepared to meet me and a delegation of north-east businessmen and trade unionists so that we can get the point across about how important the scheme is to the north-east of England?

[Mr Hammond]

I am always happy to meet Members, and I would be very happy to meet the hon. Gentleman, but I can tell him that I met the president of Hitachi recently on his visit from Tokyo, and that I have met the Japanese ambassador, and they forcefully made the same points as him. We will of course take them into account.

I should perhaps say that Hitachi is also interested in other rail projects in the UK, and we have heard very encouraging signs that the company intends to establish a serious presence in the UK as part of our future rail infrastructure development.