Rail Investment

John Bercow Excerpts

Monday 16th July 2012 Commons Chamber

[Maria Eagle (Garston and Halewood) (Lab)]

I thank the Secretary of State for early sight of her statement, most of which, of course, we read in the newspapers over the weekend and this morning.

What we have just heard is a list of rail investment projects that were announced by the last Government—[Interruption.] It is true. They were announced by the last Government, but they will have to be delivered by the next one. We were promised £9 billion of new investment, but, as we have heard today, the reality is a plan for just £4.2 billion of new rail schemes over five years—less than half the amount that was spun to the media in advance of today’s statement to the House. Of the rest—the other £5.2 billion—more than half is simply confirmation that schemes already under way will not be cancelled halfway through, including Crossrail, Thameslink, the electrification of the Great Western main line, and the electrification in the north-west and across the Pennines, all schemes announced by my noble Friend Lord Adonis as Secretary of State for Transport in 2009.

Even many of the supposedly new projects which make up the remaining £4.2 billion are not so new after all, such as electrification of the midland main line, for which development of the economic case was announced by Lord Adonis, and to which we committed at the last election. Today’s U-turn on the Great Western main line is an acceptance that we were right to commit to completing electrification all the way to Swansea, a decision the Secretary of State and her predecessor have spent two years saying had no business case or economic benefit, when it plainly did. I welcome that U-turn; it is a victory for the Labour Government in Wales.

It is right for the Government to commit to completing the northern hub. That is vital to improve connectivity and capacity between our northern cities. However, instead of that being promised for after the next election, we could have made further progress with the scheme in this Parliament. However, the Government chose to cut investment in this spending period by £1.2 billion, according to Network Rail’s latest delivery plan update for the current control period, CP 4. It says that that has led to deferrals to CP 5, the period covered by today’s announcement. So we have cuts in this Parliament replaced by promises for the next. As the Select Committee on Transport has discovered, the entire northern hub could have been funded this year just from the Department’s underspend, but the Secretary of State instead chose to hand that money back to the Treasury.

We have also had confirmation today that the Government are determined to press ahead with hiking rail fares by up to 11% in each of the next two years, on top of January’s fare rises of up to 13%. The misery for passengers is not to stop there: we discover from the tender documents for the new franchises that bidders are being assured they can then go on imposing eye-watering fare rises of up to 8% every year. That means more than a decade to come of investment-busting fare rises.

Will the Secretary of State confirm how much lower investment in enhancement schemes, greater capacity and electrification will be in control period 5 than in control period 4? Can she confirm when work will begin on the ground, actually delivering jobs from each of the schemes that have yet to get under way? Will she update the House on the significant delays in completing the contractual negotiations for Thameslink rolling stock and the intercity express programme? Will she confirm that she has approved a cut in the planned order of new intercity trains from 1,400, as planned by Labour, to fewer than 600?

When will we see the results of the review into train procurement that was promised following the fiasco of awarding the Thameslink contract to a company that will build the trains in Germany? With long-term youth unemployment having trebled in the last year, what steps are the Government taking to ensure that young people benefit from the investment through apprenticeships and jobs? Will the Secretary of State confirm that Network Rail’s debt, now standing at £27 billion, is set to increase to £33 billion by the end of this control period? How much will that have risen to by the end of 2019, as a result of today’s announcement?

On Network Rail, will the Secretary of State join me in condemning the decision to again propose a bonus scheme that will see senior managers handed £300,000 each, apparently because they have said they will walk away if they do not get it, and then a wider bonus scheme that could cost taxpayers £11.7 million? Can she confirm that, as she threatened last time, she will turn up to this Thursday’s annual general meeting and vote against that package, and if not, why not?

In the light of the commitments made to improve rail links to Heathrow, when will the aviation industry actually be allowed to submit evidence to the Department on the country’s medium-term and long-term aviation capacity needs, or do we have this lack of joined-up policy making because we are awaiting the next Government reshuffle?

Finally—

[Mr Speaker]

Order. We are extremely grateful to the hon. Lady, but she has now well and truly had her time. I have been watching the clock very closely, the Secretary of State was within time and we must now move on. The Secretary of State will respond and then we will take Back Benchers.

[Justine Greening]

I have to say that many people watching this will be amazed at the hon. Lady—rather than looking at the glass 95% full, she seems to be looking at it 5% empty. The bottom line is that the Labour Government had 13 years to crack on with this, so if they did not get to do it, they have only themselves to blame. We are in government and we are taking our opportunity to improve our railway system for our people.

I am delighted that it is a coalition Government who have finally delivered on that programme of transformation for the Welsh railways. It will make a huge difference to the Welsh economy, and I am delighted that we have been able to announce it today. I can assure the hon. Lady that we are looking at whether we can advance some elements of the investment earlier—of course we are. In fact, that comes on the back of a huge amount of work already under way across the industry, be it the work happening at Reading station, Peterborough station and Birmingham station, which is having a huge refit; the work on Crossrail and Thameslink; or the work we have just finished at St Pancras.

The hon. Lady talked about the intercity express programme, and we are making good progress in those negotiations. She will be aware that, as and when Hitachi is able to start building those trains, it will open a brand new depot in the north-east, which will create several hundred jobs. I very much hope that it will be the beginning of a story for that region in the coming years that mirrors the one people have seen in the automobile industry.

The hon. Lady asked about apprenticeships and jobs. Network Rail is playing its role in developing a skilled British work force through recruitment and development. It is taking on 200 new apprentices annually on a three-year programme, and there is now a graduate programme in place, which took about 150 people in 2011. It is also funding an industry-wide track and train programme to give opportunities to unemployed graduates, offering three six-month placements with different organisations. I got to meet some of those graduates earlier this year, and it was outstanding to see them and the opportunities they have been presented with. So a huge amount of effort is already going on in the industry. Today’s announcement will complement that and give the industry the pipeline for the future which will allow it to invest not only in its own companies, but in the supply chain that we so badly need to make sure that that work can be supported.

The hon. Lady asked about Network Rail bonuses. Well, you know what, I am the first Secretary of State for Transport who has ever expressed an opinion on them, so I do not need to take any lectures from the ex-Government, who set up Network Rail and then proceeded to spend the whole time complaining about how it ran itself. It is putting in place its new governance structure, which will be a more responsible one than that set up for it by the Labour Government. It beggars belief that, on a day when we announced such an historic investment, all the Opposition can do is carp from the sidelines. However, I suspect that while that is their strategy they will remain exactly where they are now: on the sidelines.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I remind the House that, in accordance with convention, Members who entered the Chamber after the Secretary of State began her statement should not be seeking to catch my eye. It is also obvious that there is very widespread interest in this subject—understandably so—which I am keen to accommodate, but Members will also be aware that there are two Opposition-day debates to follow. Therefore, there is a premium on brevity from Back Benchers and Front Benchers alike.

[Mr John Redwood (Wokingham) (Con)]

Over the past two years Network Rail has announced losses of £344 million on its very large derivatives book, so would not a better way of spending that money be to have a national programme to replace dangerous level crossings with bridges and underpasses—and could that start in Wokingham, please?

--- Later in debate ---

[Hugh Bayley (York Central) (Lab)]

Will the Secretary of State make sure that the electrified midland main line connects to the first phase of High Speed 2, so that Yorkshire gets classic compatible trains running fast from London via Birmingham to Yorkshire just as quickly as Manchester? Will she reflect on her claim that only 10 miles of track was electrified under Labour? After all, High Speed 1 from the channel tunnel to London, a brand-new electric line, was built when Labour was in power.

[Mr Speaker]

I gently say to the hon. Gentleman, for whom I have the highest regard and affection, that if he is going to ask a question about High Speed, there is real merit in asking a high-speed question. From now on, we need short questions and short answers. I say that in the interests of colleagues whom we wish to accommodate.

[Justine Greening]

The hon. Gentleman raised the question with me only last week in a meeting that I had with him on High Speed 2. As I said to him then, there are some challenges in doing as he suggests, but one of the most important aspects of the High Speed 2 business case is to ensure that as many communities as possible are connected up with it, and that we do that as soon as possible. I have no doubt that we will continue to look at whether those options are available to us and we can progress them. In the meantime the great news for him is that we will see High Speed coming up to his part of the country and it will hugely benefit his community when it gets there.