Inter-City Rail Investment

Sheila Gilmore Excerpts

Thursday 9th January 2014 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

I congratulate the hon. Member for Redcar (Ian Swales) on securing the debate, and I thank the Backbench Business Committee for allowing it to take place. I cannot help but reflect that, should our predecessors of 40 years ago walk in here today, they would be surprised to see the extent of the interest across the House in rail investment. We might disagree on some of the mechanisms for achieving it, but there is now a high level of agreement that this is the way forward. This follows a period in which, sadly, we were diverted towards the wrong future, and I hope that we are now heading towards the right one.

Regrettably, some decisions are still going the wrong way. For example, the Scottish Government have chosen to build a new road bridge across the Forth, connecting Fife and Edinburgh, without any new rail connection. That is a missed opportunity. We had an opportunity to put in some sort of double-decker bridge; there are ways to build both road and rail together, if we did indeed want more road capacity. We are going to regret this decision in the not-so-distant future. The building has started, so the bridge is, unfortunately, going to go ahead, but I think that within months of it opening the call will be, “What on earth did you do that for when the congestion in the area and the car drive into the city are going to get worse and the rail link would have been a fantastic advantage?” Of course, we do have a rail bridge, of considerable antiquity. It is an iconic piece of rail architecture for the whole UK, but it does act as a bottleneck on a journey that more and more people want to make, in a way that they did not before. Even in a general atmosphere where railways have come back into their own, we are at times in danger of making the wrong decision.

I wish to discuss the mechanisms and the Government’s decision to re-privatise inter-city services on the east coast main line, because that is having an impact on investment on other inter-city routes. I have raised this matter previously and I do not apologise for doing so again, because it is important; I have not yet been given any clear answers from Ministers, so I am going to ask some of the same questions.

I wish to make some brief remarks on High Speed 2 and public investment in inter-city rail generally. There are different views across the House on HS2, but those of us who support it must deal with the danger of a perception that it will not have any benefits for the rest of the network. HS2 will enhance capacity on other key routes: trains will continue on the classic network to serve other destinations; space will be freed up for services to smaller towns and cities; and, providing high-speed platforms are properly integrated into existing stations, people across the country will have access to high-speed trains. We need that form of travel, in both directions. I understand the fear about the pull to the south-east, but that pull is happening in any case, for all sorts of other reasons, not least the lack of employment in the north. We need to address that, but not grasping the nettle is the wrong way to go.

Futurologists from 40 or 50 years ago might well have thought that people would not need to travel now because they would be able to talk to each other by all sorts of new mechanisms, and indeed they can. I used to tease my husband, who works in IT, in the academic community, which has always been quite far ahead on things such as networking, by asking him why he needed to travel to conferences and to London because he could do everything by video conferencing. I asked why on earth he was going yet again. Of course, as I pointed out to him when I thought about it, people cannot have conference dinners by video conferencing. That is not an entirely facetious point to make, because, as we all know from our party conferences, when people meet at events what goes on outwith the main setting in terms of networking, catching up with people and having those debates and conversations is hugely important. Human communication has not been supplanted by all the technology at our fingertips.

[Kelvin Hopkins]

My hon. Friend is making a sensible point. Does she agree that trains also provide opportunities for human interaction, business talk, discussion and work to be done? Trains are wonderful things in that respect.

[Sheila Gilmore]

They certainly do provide those opportunities, but occasionally I hear more about other people’s business on the train than I want to know. For that reason, I am glad to see more quiet coaches. When my father used to complain about people talking on mobile phones on the train, I used to think that he was being an old fusspot. However, I have to say that although it is good to have some sort of business interaction on the train, it would be nice not to have it right in my ear when I am trying to work. Interestingly, on the east coast main line, the quiet coaches are now the most popular and most booked up of all the coaches. That suggests that I am not in a minority on the matter. It is true to say that we can do a lot of work on trains that we cannot do flying.

[Alison Seabeck]

Does my hon. Friend agree that there is perhaps a case for a business class on some of these long-distance trains, rather than a first class?

[Sheila Gilmore]

I suspect that the quiet coach operates to a large extent as a business class. Perhaps operators should consider expanding the number of those coaches. Many people want to use that time on the train—whether it is two hours, three hours or more—productively, even if they are only recharging their batteries and reading a book or whatever. If we are serious about the environmental advantages of rail over air, we need to make that journey as productive and as comfortable as we can, and also to speed it up. The big advantage of HS2 in Scotland would be a cut in journey times, even without the high speed rails reaching us. The city centre to city centre advantage of HS2 is huge, and it works both ways. For example, 11% of employment in Edinburgh, even after the recession, is in the financial service sector. The links from Edinburgh to other financial centres are important. If we are to continue to be the headquarters of some very important financial institutions, rather than a sub-office of somewhere else, it is just as important that people can come to us as it is that we can go to them.

[Ian Swales]

The hon. Lady mentions HS2, so I ask this question in a spirit of genuine inquiry, because I only know the figures for Newcastle. How much will HS2 enable trains from Edinburgh to save time? Does she think a similar time could be saved by investing in the straight and relatively flat current east coast main line, as referred to by the hon. Member for Luton North (Kelvin Hopkins)?

[Sheila Gilmore]

My understanding is that when phase 2 is in place, we could save a full hour—perhaps slightly more—of the journey time. As we are talking about a long time scale, I am not averse in any way to looking at ways of improving the speed on existing rails. One thing East Coast has done, which is helpful, is introduce a train that leaves Edinburgh early in the morning and arrives in London at a time that allows people to attend meetings. It does that by having fewer stops, so there is always a trade off. By only stopping at Newcastle and then coming straight through, it has shaved off time. The only downside is that the train departs very early in the morning. We are privileged here in the House of Commons. As we go through until 10 pm on a Monday night, we do not start work at 10 am, which would be difficult.

Leaving aside the whole HS2 debate, we welcome the fact that intercity lines in other parts of the country are receiving significant public investment for electrification, new rolling stock and so forth. Of course, it is important to emphasise that all that investment is public and coming from the taxpayer. That fact was reinforced last month when the Office for National Statistics announced that it would reclassify Network Rail as a central Government body from September. That is an acknowledgement that it is not outwith the Government.

Part of the promise of privatisation was that it would generate investment, but it has not done so. We must be realistic about that. What about the level of private investment in other inter-city routes following the Government’s decision to prioritise the franchise competition for the east coast? I am sure that Members will remember that under the Government’s initial franchising timetable, a new contract for the west coast main line was due to start in October 2012, with Great Western starting in April 2013 and east coast in December 2013.

After the debacle of the west coast bidding process, a new timetable was announced last March. The east coast main line, which was previously last in the queue of those big franchises, was brought forward so that it would be let before April 2015. As the Government accepted the recommendations of the reports produced after what happened with west coast that only one major franchise should be dealt with at a time, that was only made possible by giving the current operator of the west coast main line—Virgin—a four-and-a-half-year franchise extension to April 2017. The operator of the Great Western line, First, was given a two-and-a-half year extension to September 2015. That is 77 months of extensions between the two operators.

Ministers who prioritised the east coast franchise and justified it by referring to the Brown review are presumably reiterating their belief that competition in the bidding process should drive private investment. Although franchise competition might achieve that, franchise extensions clearly do not. The Government have lost any bargaining chip they had in the process. Having made that set of decisions, they had no option but to negotiate with the existing operators. The only bargaining chip Ministers could use would be to threaten to call in East Coast’s parent company, Directly Operated Railways. The operators know the Government’s reluctance to do that and the very fact that they want to extract the east coast franchise from DOR shows that, quid pro quo, they would not want to put the other routes into DOR’s hands. That means that competition is effectively absent.

The companies have no incentive to invest during the remaining time for which they are operating the routes and have every incentive to demand significant subsidies. The extensions are likely to cost us, the taxpayers, dearly. In 2011-12, Virgin paid the Department a premium of £165 million and First Great Western paid £110 million. Will the Minister confirm that following the agreement of the extensions, payments of such an order are unlikely to be made? Perhaps he could confirm what sort of payments he anticipates. Will the Minister also confirm that apart from the roll-out of wi-fi on First Great Western, which we would have expected from any operator, the two extensions offer no improvement for passengers?

My key contention is that if the east coast franchise had not been prioritised, those extensions would not have been necessary and the competitions for the west coast and Great Western franchises could have been held much sooner had the Government wanted to pursue them.

[Kelvin Hopkins]

I entirely agree with my hon. Friend. Does that not illustrate that the determination to re-privatise the east coast main line is driven by dogma, not reality?

[Sheila Gilmore]

I think that it is. I do not propose to reiterate all that has been said by so many of my Opposition colleagues in several of the debates we have had on this subject about how East Coast has performed. Given the history, it is particularly frustrating. As I have campaigned on the issue and talked to people about it, I have found that the levels of support we get are extremely high.

People who are not politicians and who are not involved in the debate at that level are baffled as to why, when the east coast main line has already been through two difficult franchising periods, this should be happening in that way. Given what we have learnt, they ask, “Why are we doing this if it is working well? If it is working well, why not leave it in place and see what happens?” As I have said, that would not necessarily have prevented the Government proceeding with other franchises, if that is what they were determined to do—some people would certainly have preferred it if they had not been. It seems particularly perverse to pick this one. That is what many members of the public feel, and not just those who travel on the line regularly.

There is a lot of concern about how this will work out. If East Coast had been performing badly in the public sector, it would have made sense. An imperative to turn it around might have trumped the disadvantages of negotiating extensions on the west coast main line and the Great Western main line. But East Coast was and is performing well, and that defence is simply not available to Ministers.

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

I have listened carefully to the hon. Lady, who says that there is no excuse. She will of course want to point out that, in terms of punctuality, the east coast main line is the worst performing long-distance franchise and that it has been so for at least the last year.

[Sheila Gilmore]

It is quite clear from the figures on punctuality that the problems East Coast has faced have been substantially about track and weather. A previous speaker referred to the problems with the lines, particularly in the Peterborough area, over the past couple of years. Those problems need to be addressed well in advance of any other changes. If we discount those problems, I do not think that anybody in the rail industry is suggesting that that has been due to the operator.

My contention is that we have reduced our ability to get improvements on other important lines and that that is regrettable at a time when there is real support and appetite for rail investment, and for good reasons. That has given us an opportunity to move ahead with this and perhaps make up for past mistakes. It seems to me to have been an opportunity missed.