Cost of Public Transport

Stephen Hammond Excerpts

Tuesday 19th January 2016 Commons Chamber

[Lilian Greenwood]

The Labour party scrapped flex permanently, and it was the Secretary of State’s Department that chose to reinstate it, as well he knows. It was only as a result of concerted pressure by Labour Members that this Government dropped it over the past two years.

As I was saying, evening fares in the north have been hiked by up to 162% at the Secretary of State’s direct insistence. The Department’s own McNulty review has warned that our fragmented railways have a ticketing system that

“is complex, often appears illogical and is hard for the uninitiated (and even the initiated) to understand.”

There is also an efficiency gap of up to 40% compared with the best performing European operators, which is wasting money that should be used to address the rising cost of travel and to fund investment.

At the last election we were promised part-time season tickets, and a pilot by Southern Railway found that they could save some commuters 50% of the cost of their travel. However, the smart ticketing programme that underpins the system is 78% over budget and delayed by three years, and there are rumours that it could be cancelled. Will the Secretary of State tell us today whether the south-east flexible ticketing programme is being dropped?

Ministers might claim that services are getting better for everyone, but I urge them to mind the gap between their rhetoric and reality. We all remember the Under-Secretary of State for Transport, the hon. Member for Devizes (Claire Perry), saying that rail passengers had to realise that they were paying

“fair fares for a comfortable commute”.

[Stephen Hammond (Wimbledon) (Con)]

In the Corbyn land of rhetoric, the hon. Lady seems to have forgotten that fares went up by 11% in the last year of the Labour Government alone. It is this Government who have frozen regulated fares for three years. Will she acknowledge that fact and make sure that she puts the truth on the record?

[Lilian Greenwood]

If the hon. Gentleman looks at our record, he will see that rail fares increased only by the level of inflation or were actually cut in six of the 13 years that Labour was in power. Fares rose in some years, and that helped to fund investment. Under Labour, there was more investment in rail in real terms than under any previous Government. Under this Government, that link has been broken.

The Transport Secretary said that only commuters were paying regulated fares, and that unregulated fares could be “quite cheap”. Those comments are a world away from the frustrations endured by passengers every day on Southern and Thameslink, some of which were described in the House today by my hon. Friend the Member for Streatham (Mr Umunna). They reflect an increasingly overcrowded and unreliable network.

In 2009, the Conservative party’s rail policy review stated:

“Fare rises come with tacit Government approval and are often the direct result of the franchise process”.

Will the Secretary of State therefore explain why he intends above-inflation rises to resume after 2020, as his Department’s recent consultation on the East Anglian franchise makes clear? Passengers were always told that higher fares were necessary to pay for improvements, but under this Government that link has been broken. The electrification of key lines was first paused and then shambolically “unpaused” one week before the Conservative party conference, and those projects are now delayed by years.

That goes to the heart of public trust in the railways. Ministers and Conservative Back Benchers went into the last election on a manifesto that said that key improvements would be delivered in this Parliament, but information about the true state of those programmes was kept concealed within the Department. The Transport Secretary has said that he was not informed about the state of the electrification programme until after May, but why did he not pose searching questions within the Department in October 2014, when my predecessor, my hon. Friend the Member for Wakefield (Mary Creagh), challenged him to say

“which electrification projects will be delayed or cancelled”—[Official Report, 23 October 2014; Vol. 586, c. 1030.]

due to cost overruns on the great western main line?

--- Later in debate ---

[Lilian Greenwood]

I am not going to give way at the moment, because I want to make some progress. The Government claim they will not increase regulated fares above inflation, and we will hold them to that promise, but may I remind the Transport Secretary of his comments from two years ago, when he said that Labour’s fares freeze

“would cost £1.8 billion over the lifetime of the next parliament and be paid for by more borrowing and higher taxes.”

Given that the black hole in Network Rail's finances will be plugged by £1.8 billion-worth of asset sales and £700 million of additional borrowing, has not this Government’s ostrich-like approach to the railways resulted in what the Transport Secretary’s own party might call more spending, more borrowing, and more debt?

We need investment in our rail network, both in HS2 and in the existing railways. I am proud of the fact that we saw record investment between 1997 and 2010. Our Government invested more in the railways, in real terms, than any previous Government, addressing the chronic maintenance backlog, replacing thousands of unsafe, slam-door Mark 1 coaches and ending the appalling safety crisis created by the disaster that was Railtrack. I am concerned that the Government’s programme has come to resemble not the much heralded “biggest investment since the Victorian era” that we have heard so much about, but the ill-prepared 1950s modernisation plan that did so much damage to support for the railways.

As we come to make the case for additional investment, we need Ministers to own up to the challenges that the programme continues to face, but again and again, the message is the same: they did not know; they were not responsible; and they were not there. We could ask what exactly Ministers were doing instead of keeping improvements on track, because they were not keeping an eye on the franchising programme, which collapsed in 2012 costing taxpayers more than £50 million, or on the allocation of trains in the north, as the Secretary of State approved the transfer of new rolling stock from TransPennine to the south, triggering a capacity crisis that cost taxpayers another £20 million to resolve. It seems that their focus was solely on privatising East Coast, a successful public sector rail operator, which delivered record passenger satisfaction and punctuality scores—

[Stephen Hammond]

rose—

[Lilian Greenwood]

No, I have already given way to the hon. Gentleman.

East Coast cut its fares in real terms in 2014 and reinvested all its profits in the service. As reported last week, it was delivering the best-ever service on the line in the weeks before it was sold. Instead of extending that successful model of public ownership to the other franchise services, the route was prioritised to be sold off. Worse, we now learn that Directly Operated Railways, East Coast’s parent company, has effectively been mothballed and its functions outsourced to companies with no experience of operating passenger services.

We are left in the absurd position of divesting our in-house railway expertise at precisely the moment that several franchises and contracting competitions appear to be in doubt. Now, on top of the damage already done, the Government are seriously considering privatising Network Rail. They have already tested the theory to destruction with Railtrack. A sell-off of Network Rail will put profit before passengers and risk dragging us back to the worst excesses of privatisation. I say to the Transport Secretary: do not go down this road. We know how it ends and we on the Labour Benches will oppose it all the way.

May I say how disappointing it was that the Scottish National party in government not only issued a conventional franchise for ScotRail, but passed up the opportunity to invite a public sector bidder for the contract? The franchise was awarded a full month after Gordon Brown, the former right hon. Member for Kirkcaldy and Cowdenbeath, made it clear that, on the forthcoming Smith agreement, enforced rail privatisation will be no more and the right to include a public sector option is currently before Parliament in the Scotland Bill. Labour urged the Scottish Government at the time to postpone the competition, but that call was rejected.