High Speed Rail (London - West Midlands) Bill (Fifth sitting)

Simon Burns Excerpts

Tuesday 8th March 2016 Public Bill Committees

[Andy McDonald]

I beg to move, That the clause be read a Second time.

In the new clause we address the thorny issue of public sector operation. There has been a great deal of consensus across the Committee thus far, with some notable exceptions; this, we respectfully acknowledge, is perhaps the most contentious issue between us.

If we consider the history of rail privatisation and its impact on the commuting public, it is not difficult to understand the overwhelming public support for bringing railway services back into public ownership. Quite simply, the privatisation of British Rail was a rushed, botched job, which had more to do with ideology than with any clear plan for the nations’ railways, and it left us with a fragmented, inefficient and unsafe network at that time.

[Sir Simon Burns (Chelmsford) (Con)]

If that is the case, why, during 13 years of Labour government, did the hon. Gentleman’s party not do anything to change it?

[Andy McDonald]

To suggest that during 13 years of Labour government nothing was done is to misunderstand the position. A great deal of progress was made with renewals in the railway system, and that must be seen within the context of trying to pick up the pieces after the disaster that was Railtrack. I have already alluded to its appalling record. That left us with an unsafe railway. Much of the 13 years of Labour government was devoted to making it into the safest railway system in Europe. Many people in this room will remember having to reduce speeds down to almost walking pace, because of our concerns about the safety of the points systems and rails. We look back to Potters Bar and Ladbroke Grove, etc., and think of the disasters and loss of life.

To say that our experience of the privatisation of rail infrastructure is not a good one is a gross understatement. It is a huge fear on these Benches that the current proposals to break up Network Rail into eight route businesses may embrace the sorts of dangers that we sadly experienced in those years.

[Sir Simon Burns]

The hon. Gentleman talks about infrastructure, but he has avoided answering the specific question I asked him. If the running of the railways by private companies was so bad, why did not the previous Labour Governments of Blair and Brown renationalise them?

[Andy McDonald]

I will come on to our responses to some of the poor performances and, indeed, failures of the franchised private system. If the right hon. Gentleman will bear with me, I will come to that in greater detail later in my brief contribution. He will know as well as anybody that the McNulty report stated that the fragmentation of our rail network left us with an efficiency gap of between 30% and 40%, compared with other European networks. This means that money which should be used to address the cost of travel and to fund much-needed investment is needlessly wasted. We have been left with a ticketing system which is the most expensive and confusing ticketing structure in Europe. Commuters’ fairs are up by a quarter since 2010, having risen five times faster than wage growth.

Our rail network needs significant investment. Private and foreign state-owned companies are subsidised by the UK taxpayer, while profiteering at the expense of commuters. Far from learning the lessons of the past, the Government seem destined to repeat them.

In illustrating the benefits of publicly-owned operators, one could hardly ask for a better example than the recent case of the East Coast. The previous Labour Government took the important step of bringing the East Coast back into public operation, after the private operator reneged on its obligations in 2009. I have heard it said that failure is somehow a judge of success, in that if franchises fall over and fail, it demonstrates the veracity and robust nature of the franchising system. I do not think that really strikes a chord with the travelling public, who see an unreliable service that does not meet their satisfaction.

East Coast proved itself under public ownership to be the most efficient of operators. It returned almost £1 billion to the taxpayer in premium payments as well as investing every penny of profit—some £50 million—back into the service. In addition, directly operated railways kept fares down, had record passenger satisfaction and engaged the workforce with unparalleled success.

Today is an opportunity for the Conservative party to deliver what the public are asking for by supporting new clause 21, which would require passenger services operating on the whole or part of the high-speed line to be provided by a publicly-owned railway. I hope that when High Speed 2 is open for general use it will be celebrated as a national achievement. I do not agree with the Government that a nation capable of completing such a fantastic rail infrastructure project is not competent enough to operate passenger services, but that the Dutch, German and French are more than capable of doing that for us. Such an attitude that we are not competent enough to do what many of our European counterparts take for granted is effectively talking down our abilities as a nation.

I am sure that we will return to that debate numerous times in this Parliament, but I hope that I was persuasive enough to make the Minister see the veracity of our argument and that he and his hon. Friends will vote with us and with the wishes of the public in support of the new clause.

[Sir Simon Burns]

I do not want to enter a sour note in what have been harmonious proceedings so far, but I fundamentally disagree with the hon. Gentleman’s new clause. I am in good company, because the last two Labour Prime Minister’s shared my view: neither Tony Blair nor Gordon Brown ever wanted to re-privatise the railways while in power and they did nothing to re-privatise the running of them. He failed to answer my interventions on that.

I always find it slightly odd that those who—sadly, like me—are old enough to remember British Rail see it as the halcyon days when everything was wonderful: the trains ran on time; they were terribly cheap, notwithstanding the taxpayer subsidy of fares; and investment in improving the network overflowed. In fact, every time a Government—whether Labour or Conservative—was hit with an economic crisis, one of the first budgets mangled was that for nationalised industries and investment in the railways. That is why both the previous Labour Government and this Conservative Government have had to invest so much money in improving the rail network’s infrastructure: there was so little investment before privatisation.

The hon. Gentleman seems to think that it was a wonderful experience to ride the trains when they were publicly owned, but that was not the case. They were not more efficient and there was out-of-date rolling stock and collapsing infrastructure and, if we go back to 1963, a significant proportion of the network was closed down as a result of the Beeching report. I therefore really do not think that the answer is to turn the clock back to the bad old days as if they were some halcyon period that we should aspire to replicate today.

[Alison McGovern (Wirral South) (Lab)]

I do not mean to detain the Committee for any longer than necessary. I was not going to speak a word on this subject—I could speak on trains for about three long hours—but, given that we are talking about the past and the right hon. Gentleman alluded to his seniority in this place—

[Sir Simon Burns]

In age.

[Alison McGovern]

You say potato. I trust he will confirm that during the long years of the 1980s and 1990s when our rail system was starved of investment, he lobbied the then Conservative Government at every opportunity to invest in it.

[Sir Simon Burns]

The dates the hon. Lady chose are slightly selective, because it was not just in the ’80s and early ’90s that there was a starving of investment. I at least have the decency to spread the blame to all parties, not just the Conservative party. Rail was starved of investment in the ’70s. My first job was working in this place from 1975 to 1981, and four and a half of those years were under the Wilson and Callaghan Governments, when we ended up running to the International Monetary Fund because the country ran out of money—[Interruption.] The hon. Lady does not like the truth. The country had to go with a begging bowl to the IMF, and one of the major areas to suffer from public spending cuts was the railways.

--- Later in debate ---

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

This will become a Second Reading debate on public ownership if we are not careful.

There is a great deal of heat in the debate, and not much light. I have no time for those who pretend that British Rail was somehow a high-performing publicly owned service. Clearly, there were huge problems, with political interference in the investment periods and all of that leading to the creation of short-term problems. One thing that I struggle with a great deal, however, when comparing rail with other privatised industries is that, as the right hon. Gentleman just said, investment in the railways still comes from the taxpayer and not the private sector, so the risk is not in the private sector, but in the public sector. We, as the people who use the railways and pay our taxes, are the ones who put in the investment. It is Government money, not private money, that will be invested in the control period, is it not?

[Sir Simon Burns]

The hon. Gentleman is partly right; some of the money is taxpayers’ money, but a significant proportion of what funds the £38 billion over the next five years will be paid by the rail operators to rent the track. There is also the ability for private money to be borrowed for investment, so no, it is not exclusively—

[Jonathan Reynolds]

indicated dissent.

[Sir Simon Burns]

The hon. Gentleman nods his head in a negative way, but he is wrong. The investment of £38 billion in CP5 is not 100% taxpayers’ money. As I said, part of it is rent accrued from the rail operators, which pay to use the track.

Since privatisation, there has been a will and determination to invest, as well as the actual delivery of investment, to bring our railways up to scratch. The process is time-consuming, sadly, because of the problems arising from the earlier lack of investment. The other sad thing for rail users is that a lot of the investment that is badly needed to improve journey times and the reliability of the service is not seen immediately by them. New rolling stock is immediately seen by commuters and travellers, obviously, and they benefit from it, but when we improve and upgrade the track or the overhead cables on that part of the railway that is being electrified, users do not see the outcome of the investment in the same way. However, such investment is still critical to improving the performance of our railways. I am confident that that will continue.

The hon. Member for Middlesbrough mentioned the east coast main line. I would be the first to accept that it was a well-run part of the network, but it was run under Directly Operated Railways because the last Labour Government rightly withdrew the franchise from the franchisee because there was dissatisfaction with the way it was operating the line. DOR is an emergency mechanism that was introduced in the legislation on privatising the railways because there is a legal requirement for the railways to provide a service all the time. To avoid a hiatus if there is a problem with the franchise, DOR will, for a fixed period of time only, step in to ensure continuity of service.

The hon. Gentleman kept talking about a state-run service. I suppose that DOR could, by definition, be called state-run, but it was not meant to run the line for ever. Even the Labour Transport Secretary who took the action made it plain at the time that there was not going to be a never-ending provision of service by DOR.

[Mr David Anderson (Blaydon) (Lab)]

I accept what the right hon. Gentleman says about the background, but DOR ran the line successfully. The Labour party recognises that and has learned from that experience. We now say that it is something that should be used in the future, which is why we opposed the refranchising last year.

[Sir Simon Burns]

I am sadly well aware of the Labour party’s proposals for that provider to continue to provide the service. Frankly, I have every confidence that the conglomerate, which includes Virgin, that has taken it over will provide a first-class service. Based on passenger satisfaction, Virgin does so on the west coast main line. I am sure that the hon. Gentleman remembers the fiasco of the refranchising of the west coast main line in the summer and early autumn of 2012. The passengers—for want of a better expression, it was people power—were amazed that Virgin’s franchise was not renewed. Ultimately, because of the problems that emerged, Virgin continued to run it, and I have every confidence that it will run a first-class service on the east coast main line.

Let me give the Committee an example of the way that franchisers can innovate to respond to the needs of local people. I am sure Committee members are aware—if they are not, the Minister will be more than aware—that there has never been a direct service between Scarborough and London in the lifetime of the railways. Why should Scarborough, where there is a demand for such a service, be so deprived? Virgin is responding to the marketplace and the wishes of customers, and from 2018 it will run a direct service from Scarborough to London. That is how franchisers can respond to changing circumstances and demands.

Similarly, Opposition Members will be aware that High Speed 1 is currently run by a private company. The hon. Member for Middlesbrough looks perplexed and is consulting his colleagues, but I chose my words very carefully: High Speed 1 is currently operated by a private operator. I see no reason why it should be returned to the public sector. I fundamentally do not believe that politicians and Governments are best equipped to run services and industries such as the railways. Our experience of their doing so was poor. Notwithstanding the problems and the need to improve our infrastructure, on balance, investment has been provided and work is being carried out to improve our rail services to make them into a first-class service in the private sector. I believe that that is where they should remain.

It would be a mistake if High Speed 2 were to be shackled before the first train had run on the tracks by being run, in effect, by the Government as a nationalised industry. If there is a Division on this contentious issue, I urge my colleagues to reject this opportunistic new clause. It is very much in keeping with the new politics of the Corbynista regime which, as in many other areas, is totally divorced from the best interests of the British people.

[Mr Anderson]

It is a great pleasure to be here, Mr Chope. I hope to see you at the weekend in the Orkney islands, with any luck. I would like to clarify a few points raised by the right hon. Member for Chelmsford. For the record, he praised Virgin’s role on west coast. Virgin is the brand name of the east coast main line at the moment, but Virgin has only 10% of the franchise. The other 90% is owned by Stagecoach, which they are trying to keep a very closely held secret because of Stagecoach’s horrendous record when it comes to transport in this country.

The right hon. Gentleman said that British Rail in various guises had failed. Nobody doubts that. No one on the Opposition Benches is saying that it was a success, but what has to be understood is that of the 46 years that it was in public ownership, 32 of those years were under a Tory Government. One of the main reasons why the trains were never improved was that we as a nation inherited very poor quality stock and a poor system of stations, and the truth is that Governments chose to dip in and dip out of supporting the railways, as the right hon. Gentleman rightly said. He is right that they were not run very well. However, I would argue that whatever the successes or failures of the past 20 years of privatisation have been, people have learned lessons. The east coast main line is an example of how people took some of the good of what they had learned from privatisation and put it into service on the east coast, which became the best service in the whole of Britain.

The right hon. Gentleman misquoted when he said that neither Blair nor Brown supported reprivatisation. What he meant was that they did not support renationalisation, and that is actually correct. They were opposed to going backwards, quite apart from the fact that they thought it would be a diversion of money that could be spent elsewhere on putting right a lot of things that failed under 18 years of Tory government. They chose not to do it, and they did not want to do it. The truth about Railtrack is that the Government were forced to do it, and I will tell the Committee why. On 19 September 1997 the Southall rail crash took place. A friend of mine was in that crash. He was given the last rites twice, but thankfully he survived. On 5 October 1999 the Paddington rail crash occurred. Another friend of mine was involved and, sadly, he was one of 31 people who died. On 17 September 2000 the Hatfield rail crash took place, and on 10 May 2002 the Potters Bar rail crash occurred. A common theme through all of them was the failure of Railtrack to maintain the tracks properly.

I work with people who worked with me in the coal mines in the ’70 and ’80s. They went on to be contractors and subcontractors repairing rails. They told me some nightmare stories of the work they were involved in. We used to have railways underground. I was a mechanic looking after trains underground, so I have some experience of how to look after railways properly. Some of the things they were telling me were nightmares. There used to be a standard in this country that every length of rail had to be changed once every 40 years, regardless of its condition. That was the maximum length of time a rail could be left in place. One thing which happened almost immediately after privatisation was that that was changed to rails being replaced once every 80 years. That was the mental attitude of the people to whom we gave away our railway system, and who we allowed to run our trains. Is it any wonder that things went wrong? Railtrack had to be brought back into public ownership to protect the travelling public from the shortcomings that were clearly occurring.

The east coast franchise went first to GNER, which ran it for some time. It was a reasonable service, but its parent company, Sea Containers, was going belly-up. Overnight, GNER pulled out of the franchise. Who had to come in? The Government had to step in. As the right hon. Gentleman said, it was right and proper to pick up the pieces and keep it running. They kept it running and it was franchised out again to National Express, but the National Express experience was appalling. They ran the trains the same way as they ran the buses. The hygiene, punctuality—every part went backwards, and again the public sector had to walk in. When National Express walked away—they were not thrown out; they walked away because they were failing—Directly Operated Railways became the most successful train line in the country.