West Coast Main Line

Russell Brown Excerpts

Monday 17th September 2012 Westminster Hall

[Iain Stewart]

That is a fair question. When the Select Committee debated whether we should call Sir Richard Branson, Tim O'Toole and their colleagues, I made the point that we would not be able to probe them fully because we did not have access to the information because of the legal position. I would love to be able to go further, but we shine as much light as we can.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

rose—

[Iain Stewart]

I will give way one last time, but I must then make some progress.

[Mr Brown]

I thank the hon. Gentleman for giving way. Obviously, the bids contain significant detail. As he and other hon. Members have indicated, we may never find out all of it. There are so many claims and counter-claims, and through the Select Committee and this debate we are looking for a clear indication from the Minister, without the detail, of whether every claim and counter-claim was carefully considered. Has he covered everything to ensure that the outcome is fair for the taxpayer?

[Iain Stewart]

Some of those questions are for the Minister to answer. I shall come in a moment to some reasons for my own conclusions about the two bids, but there is a caveat attached to what I say, because I do not have access to that information.

For the first half of the franchise period, up to eight to 10 years, the two bids are remarkably similar. There may be a higher premium payment from one than the other in a given year, but the lines on a graph are broadly consistent. They diverge only in the last period. The shorthand explanation is that FirstGroup believes it can continue to grow the market throughout the franchise, whereas Virgin believes that revenue growth and passenger numbers will tail off towards the end. The first bid is therefore more ambitious, and consequently riskier. What we must assess is whether that risk is acceptable. My conclusion is that it is within the bounds of acceptability.

My first reason for believing that is that population growth along the route is likely to be considerable over the 15 years. The Milton Keynes area has 25,000 housing permissions over the lifetime of the bid, and other towns and cities on the route have similar housing growth ambitions for that time. Feeder services into the main line will also be enhanced. The east-west rail link in my area will, I hope, open by 2017. One of its attractions is that it will build feeder services into the west coast, for people from Oxford or Bedford who might want to travel to stations in the north-west, or Scotland. That will drive demand on the line. Similarly, in the Manchester area, the northern hub will we hope attract more rail users on to the line and enable it to continue its ambitious growth, taking passengers away from the air route. For those reasons I believe there will be sustainable demand in the next 15 years.

The next question is whether the line can deliver the capacity to meet the demand. One of Virgin’s accusations was that by the end of the franchise First will have to fill every seat on every train every day to meet its premium payments. We need to examine the detail of what First proposes. It proposes more trains than the Virgin bid does. Both companies propose to buy new electric train sets for parts of the network. I understand that the difference is that First will augment the existing fleet. Virgin would replace the Voyagers with the new electric ones, whereas FirstGroup would keep the Voyager fleet and lengthen five-car trains into 10-car trains. First also wants to use more ambitious ticketing structures: a new class of travel between standard class and first class. It makes a point about capacity; the figure for the trains across the week is only 35%, whereas other franchises run at near 50%.