East Coast Main Line

Sheila Gilmore Excerpts

Tuesday 12th November 2013 Westminster Hall

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

It is a pleasure, Mr Bone, to serve under your chairmanship. I pay tribute to my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) for securing and leading the debate today.

This is not the first Westminster Hall debate on the east coast main line and, unless the Government change their position, it will probably not be the last. The Government might not like to have such repeated debates, but the Opposition make no apologies for bringing the issue back for discussion time and again. We will do so until the Government change their policy, because there is an overwhelming case against forcing East Coast trains back into the private sector without even giving the public sector a chance to offer an alternative.

My hon. Friend reminded us of the positive financial record of East Coast trains and that the public are clearly against the return of the east coast service to the private sector. The staff on the line, and the cities up and down the line, do not want the service to return to the private sector, and public opinion is overwhelmingly against the proposals that the Government seem determined to push forward.

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Mark Lazarowicz]

I give way to my hon. Friend, whose constituency neighbours mine.

[Sheila Gilmore]

My hon. Friend and I have spent a considerable time campaigning on this issue in Edinburgh. Does he agree that the overwhelming response of the people we have spoken to while we were gathering signatures has been that they do not want the line to be re-privatised?

--- Later in debate ---

[Sheila Gilmore (Edinburgh East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bone. I congratulate my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) on securing the debate. It is important that we continue to raise and debate the issues on the east coast main line, with a view to persuading the Government, I hope, that they have gone down the wrong track. It is not too late to go into reverse. I am a regular railway traveller, but this is one time when I will be more than happy for the train to stop and go backwards.

It was not such a joy to arrive at Newcastle station a couple of weeks ago and be told that the best advice was to get off the train and go home. My hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) and I were so determined to get here that we ignored that advice and soldiered on to Peterborough. That delay was due not to the train operator, but to the stormy weather; the line was certainly not the only one affected on that date. Some might suggest that East Coast let us down, but we were clear that that was not the case. Indeed, when we tried to take other lines to get from Peterborough to London, we discovered that they were all affected, whether they were privatised or not.

Things like that will happen in any travel system, but the service has—many regular travellers will say this—improved over recent years. People enjoy their journeys. I have said this before and I will say it again, because it is important from a Scottish perspective and an environmental perspective: the improvements are making inroads into getting those important business travellers, who otherwise might always travel by air, to use rail. If we are serious about creating a modal shift in transport, we have to make rail both attractive and reliable to get that kind of traveller. That is one thing the service has done extremely well.

I have taken part in at least four of the several debates that we have had on the east coast main line. As well as the Westminster Hall debate referred to by my hon. Friend the Member for Washington and Sunderland West, we had a Backbench Business Committee debate in the Chamber in which many colleagues spoke. We have had many opportunities to ask oral questions, and we have all taken them up. At this stage, one might think that we should find something new to say and look at the matter from some new angle, but the problem is that our questions have never been answered. It is important that we go back over those questions. Perhaps on this occasion we will get responses to some key points.

[Ian Mearns]

My hon. Friend is absolutely right. Ministers might ask why the public have so little confidence in the re-privatisation of the east coast main line, and the answer is simple: for the bulk of the time since the railways were privatised, the franchise has been in the hands of the private sector. The orders for new rolling stock on the line have only been secured since the franchise has been in the public sector. Much of the existing rolling stock is 35 or 40 years old. For the bulk of that time, it has been in private hands with little investment, apart from a lick of paint.

[Sheila Gilmore]

I thank my hon. Friend for making an important point on East Coast that speaks to how we run the railways. A lot of the public assumed that privatisation would mean that investment would be brought in and that everything would be brought up to scratch. That was the selling point.

The track investments are necessary and we need to see considerable improvement in the infrastructure on the east coast main line, particularly with the overhead lines, which have caused a lot of the recent problems. We need to see that crucial investment and we need to see the rolling stock upgraded, but none of the onus will be put on those who are being asked to tender for the service. Whatever investment there is will come from all of us as taxpayers.

The notion that we have to privatise to get investment was the selling point at the beginning, which people perhaps swallowed. They probably thought, “Yes, if that is a way of improving things, we will at least give it a try,” but that investment is not happening and will not happen in this case either. All the things that desperately need to be done will not get done through this privatisation process, which is, in many ways, a distraction from the measures that could lead to a real step change. We have talked about improvements and we are not complacent. We do not think that everything is perfect. We want to see a step change in the line, but it will not come through this process.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

I have been listening carefully to the hon. Lady, but would she care to speculate on whether the very investment that she and her colleagues are looking for in the east coast main line could be diminished once the Government get their way on HS2? Does she share the fear that such vast amounts will go into this bright, shiny new railway that, as in France, the existing lines might fail to get the investment that she and her colleagues desperately want?

[Sheila Gilmore]

I think the right hon. Lady knows that I do not share her views on this matter. We should not cast one railway line against another, because one of the advantages of HS2 is that it provides an opportunity to improve some of the other services, not least by dealing with the capacity question.

One issue is the opportunity cost of prioritising East Coast over some of the other long-distance franchises. Under the original franchising timetable from August 2011, a new contract for the west coast main line was due to start in October 2012, with Great Western starting in April 2013 and the east coast main line thereafter. However, following the debacle of the west coast main line bidding process, a new timetable was announced in March this year. The east coast main line, which was previously the last in the trio of inter-city franchises to be let, was brought forward to be the first. That was only made possible by the current operator of the west coast main line, Virgin, being given a franchise extension of four and a half years to April 2017. At the same time, the Great Western operator, First, has been given an extension of two and a half years to September 2015. In total, that is 77 months’ worth of extensions.

The Government justify prioritising East Coast by referring to the Brown review, which was carried out after the problems with the west coast main line. They are restating their belief that competition in the bidding process should drive down the subsidy required or drive up the premium payments offered. They say that that will push operators to be more efficient and innovative, and prompt investment in new services. One can argue that franchise competitions might achieve these goals, but the one thing that certainly will not achieve those goals is franchise extensions. That is because the Government, by setting up this arrangement, have no option but to negotiate with the existing operators on other lines. The only bargaining chip that Ministers can use is to threaten to call in East Coast’s parent company, Directly Operated Railways, but they are reluctant to do so, as is highlighted by their desperation to extract DOR from the east coast main line. How are the other franchisees threatened by Ministers saying, “If you don’t agree reasonable terms, we’ll take you into the fold of Directly Operated Railways,” when Ministers are running as fast as possible in the opposite direction with the east coast main line?

[Mark Lazarowicz]

My hon. Friend is making an excellent speech. When there were problems with East Coast trains, as there were with Southern some years ago, Directly Operated Railways was able to step in and provide an alternative when the private sector failed. If Directly Operated Railways is taken off East Coast trains—I do not know what will happen to the organisation, but I presume that there might still be a shell company—the nucleus that allows it to operate an alternative may disappear, so there might not be an alternative even if a future private sector operator fails.

[Sheila Gilmore]

My hon. Friend gives a helpful example of where, instead of increasing competition and providing opportunities for the Government to exercise some control over the rail companies, that possibility might be being reduced.

The contract extensions, which were made necessary by the Government’s determination to pull East Coast forward, will cost the taxpayer a lot of money. In 2011-12, Virgin paid the Department for Transport a premium of £165 million, and First Great Western paid £110 million. Will the Minister confirm that there will not be payments of anywhere near those sums during the extension period? Will he also confirm that, apart from the roll-out of wi-fi on First Great Western, which all train operators are beginning to offer, the two extensions offer no improvements for passengers? There is less money coming in and no improvements; the extensions need not have been given had the Government stuck to their original timetable.

If the east coast main line had not been prioritised, the extensions simply would not have been necessary. There could have been fresh competitions, if that was the Government’s will, for the west coast main line and the Great Western main line. If East Coast had been performing badly in the public sector, there might have been some justification for what has happened—the imperative of turning East Coast around would have trumped other disadvantages of negotiating extensions on the west coast main line and the great western main line—but East Coast is performing well, so that reason simply does not apply.

The Government clearly hope that they can get to the next election with all the main line routes back in the private sector. The Government could take credit for that in the hope that it would be extremely difficult for any incoming Government to do anything about it. If that is not the motive, the Government have to say what is their real motive for proceeding in that way.

Public opinion has changed. People have seen the reality. Some people, although not necessarily all of us—there are always some critics—warned that privatisation of rail might be a step too far. Members of the public who were prepared to give privatisation a chance now see Directly Operated Railways as an opportunity to have a rail service in public ownership that brings money back to the Treasury. As I said earlier, when we talk to people, they enthusiastically support our campaign. The Government sometimes say that they listen to public opinion, and on this occasion I suggest that they do indeed listen to public opinion and stop the process before it goes any further.

[Mr Peter Bone (in the Chair)]

I call Graeme Morrice.

--- Later in debate ---

[Sheila Gilmore]

Does the Minister accept that the original plan was for the east coast main line to be the last of the three lines to be refranchised, so the only reason that it now seems to be in line with the original date is that the whole thing was put on hold due to the complete debacle of the west coast main line?

[Stephen Hammond]

The hon. Lady cannot argue that we are rushing it through when she has just said that we are keeping to the original timetable. The then Secretary of State, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond) announced a timetable and we had already started the consultation prior to the west coast refranchising process being stopped, so it is nonsense to argue that this is rushed.