East Coast Main Line Investment

Stephen Hepburn Excerpts

Wednesday 17th October 2018 Westminster Hall

[Catherine McKinnell]

My hon. Friend has put her concerns firmly on the record. The Minister may wish to refer to them at the end of the debate. Otherwise, I am sure that she will make her concerns about the issue known again.

As well as celebrating our railway of the past, this debate is about our railway of the future. The north-east can celebrate its proud role in that too, including through the manufacture of the new Azuma trains at Hitachi’s Newton Aycliffe plant. That is the east coast main line of tomorrow, which is what we must focus on today.

The east coast main line is a critical piece of our national rail infrastructure. It is one of the country’s most strategically important transport routes and enables more than 80 million passenger journeys a year, according to Network Rail. Between Berwick-upon-Tweed and London, the east coast main line carries more than 58 million tonnes of freight annually, equivalent to 6.9 million lorry loads. The Consortium of East Coast Main Line Authorities has estimated that the local area served by the route contributes £300 billion to the UK economy every year—and that figure doubles if London is factored in to the calculation.

[Mr Stephen Hepburn (Jarrow) (Lab)]

I congratulate my hon. Friend on securing this timely and important debate. Does she not think it ironic that we have those new Hitachi trains, but they cannot go at their maximum speed because the lines are decades old? We are getting new trains, but the lines do not match them.

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[Mr Stephen Hepburn (Jarrow) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Owen. I repeat my earlier comments about my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell), who managed to secure this extremely necessary and timely debate. At the outset, I give big thanks to the staff of the east coast main line, which we all use regularly, for their hard and excellent work and courtesy at all times.

Like many of my colleagues, Members from other parties and Members of the other place, I am a regular traveller on east coast rail. We travel regularly with each other. Our constituents also use the line to go to work or to visit friends or family to keep in contact. The one thing we have in common—I am convinced about this—is that we believe the east coast rail line and the trains on it should be in public hands. It is in desperate need of investment.

Reference has already been made to the Cabinet meeting held in July, which was nothing but a gimmick. Reference was made to the advantages of privatisation, and we laughed when the Cabinet could not get back to London on time because the trains were delayed because of the chaos on the east coast rail line.

Privatisation is a joke. Three times in recent history, certainly since I have been in Parliament, the line has been in the hands of the private sector and has failed. Its only successful time was from 2009 to 2015 when Labour nationalised it and it returned £1 billion to the public coffers in the Treasury. On numerous occasions, both the Transport Committee and the Public Accounts Committee have criticised the services, but Ministers have unfortunately ignored the criticisms. The clear message from taxpayers and passengers and from this House and its Committees is that privatisation is bad for our rail system.

There is a broader argument for investment in the east coast rail line. Everybody agrees that this country is running an imbalanced economy. It is too focused on London and the south-east at the expense of the north-east. The east coast rail line could be a solution. It could be used as a driver to boost economic growth. House of Commons figures show that under 3% of Government transport funding has been spent in the north-east since 2012. As has already been pointed out, that is the lowest of all the English regions by far. For rail spending it is even worse, with over 15 times more being spent in London compared with the whole north-east.

Research has shown that an investment of only £3 billion over the next decade could boost the north-east economy by £9 billion if that investment went into the east coast rail line. Why do we not do that? Ideology has taken over the Government rather than practical measures to try to improve the north-east.

I hope the Minister will address a couple of questions when he replies to the debate. First, following the 2013 announcement of the proposed privatisation that took place just before the general election in 2015, Ministers boasted of the benefits of privatisation and how it would lead to increased investment. Do they now admit that that was wrong? Secondly, fares have been put up year after year under privatisation with the promise of improvements. Where are the improvements? I travel on the line weekly, as lots of people do, and we have not seen the improvements. Thirdly, the Government continually state that they are undertaking the biggest investment in rail since Victorian times. Well, it is certainly not happening in the north-east of England or on the east coast main line. I look forward to the Minister’s response.

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[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Owen. As other hon. Members have done, I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on securing the debate, and I commend her for the work that she does as chair of the all-party parliamentary group on the east coast main line.

The hon. Lady’s speech covered history and looked forward. As to the history, we heard about Stephenson and the Rocket, and the development of the original engines in Newcastle. That was interesting to me, and it made me feel I should mention some of my constituency’s rail history. The oldest remaining railway viaduct in the world, the Laigh Milton viaduct, is in my constituency. The town of Kilmarnock has a proud heritage of building railway locomotives. There are still two companies active in Kilmarnock involved in the manufacture and refurbishment of rail rolling stock: Wabtec and Brodie Engineering. QTS, which is located just outside my constituency, employs many of my constituents and is involved in the ongoing maintenance of rail infrastructure up and down the UK. It is a company that helps to keep trains running.

The hon. Member for Newcastle upon Tyne North clearly highlighted some of the issues affecting the east coast main line. As to punctuality, I noted the figure of 80%, against an 86% average in England and Wales. It is worth mentioning that the ScotRail franchise in Scotland operates at nearly 90% punctuality, and even that gets quite a bit of criticism, which shows what the level of performance on the east coast main line really is. However, it is not just a matter of statistics: the statistics mirror passenger experience, and it is important to point that out. If there is an intention to increase passenger or visitor numbers, and to get people to return to the railways, clearly there is a need for an enjoyable rail experience. That is tied in with punctuality and reliability. The issue underpins the whole argument about investment on the east coast main line. I support those calls, because the route is a cross-border one.

The £780 million package that magically appeared at the time of the Cabinet visit to the north in July was interesting. Obviously, it was welcome, but it made me think. I hope the Minister can explain. A surprise announcement kind of makes a mockery of the whole asset management system—the approach to managing infrastructure and going about long-term planning and investment—because suddenly, from nowhere, there is an announcement of a £780 million investment. It would be good if the Minister could explain the rationale for that and how it was prioritised in relation to other things that are still needed—either investment for the east coast main line, or other rail investment called for by Members in the surrounding area.

I have my own experience and memories of travelling on the east coast main line, which was the service of choice when going from the west coast of Scotland to London. At one time, the east coast main line had a much better service than the west coast main line, even though the journey was longer. It is clear that upgrades to the west coast main line have changed that dynamic and resulted in a shifting of the passenger balance, with more now using the west coast main line. That underpins the need for upgrades to the east coast main line. However, there are some parallels, looking forward; some upgrades will be made to the west coast main line to facilitate High Speed 2, but they will leave other areas of the rail network further behind. Some passengers will end up with an even poorer second-class system, while other areas of the network will get upgrades to facilitate High Speed 2.

The valid point has been made that the Treasury can spike projects or control the final release of money. We need to move away from that. Surely the Department for Transport should make the final decisions on investment.

The hon. Member for Cleethorpes (Martin Vickers) made another of his repeated requests for upgrades in the Cleethorpes and Grimsby area. I have heard those requests many times, in the main Chamber and here, so it might be thought that at some point Ministers would hear his requests and act on them. It would be good to hear the Minister’s response. An ongoing issue that the hon. Gentleman touched on was the theory that privatisation brought in a lot more investment from the private sector. What it did was to allow private companies to borrow money at a higher rate than the UK Government can, against, effectively, the guarantee that taxpayers and rail users will pick up the tab. It is not free money or magic money. It is a different way of hiding the Government’s borrowing. That is my issue with privatisation and the argument that it has brought in all this extra investment. It is actually just another way of hiding the borrowing.

That took us neatly on to the speech of the hon. Member for Jarrow (Mr Hepburn), who responded by saying that privatisation is a joke. I think that the hon. Gentleman will gather that I agree with his sentiments—certainly, as to how the matter is presented. He rightly pointed out that between 2009 and 2015, the state-operated rail company generated £1 billion in track fees and £42 million operating profit. Of course, that profit did not go to shareholders but was invested straight back into the railway, again showing the merits of public sector involvement in the operation of the railways.

The hon. Gentleman highlighted the fact that the UK runs an unbalanced economy with a focus on London and the south-east, which he said was to the detriment of north-east England. I observe, however, that a Labour Government were in power from 1997 to 2010, and surely they should have done something about that imbalance and invested in the east coast main line up to the north-east.

[Mr Hepburn]

Do not forget the neglect that we in that Labour Government inherited. We turned around the imbalance in hospitals and schools, and we spent a fortune on raising standards to give working-class people a better chance in life.

[Alan Brown]

I take the hon. Gentleman’s point about the mess that was inherited, but I still think something could have been done about the east coast main line. When the west coast main line was being done, it would have made sense to have a long-term plan for upgrading the spines along the west and east coasts, to see how that could generate growth and connectivity with cities and regions across the UK.

I can exclusively reveal that any speech in Westminster Hall by the hon. Member for Keighley (John Grogan) starts with, “I wasn’t going to speak, but I was inspired and now feel obliged to do so.” I agree completely with his comments about franchises and the fact that lawyers suck a lot of money out of the system. Cost consultants also suck a lot of money out of the system, and the money that we are paying for lawyers, cost consultants and management is money that could be used for investment and to drive growth in the railways.

Relevant points were raised about the Hatfield disaster, and about how ideology led to the privatisation of the rail infrastructure. That reminded me of a recent statement on the railways by the Transport Secretary, in which he spoke about the forthcoming rail review and kept referring to the fact that some failures of the existing system were due to what he called the “nationalised” part of the railway system. For me, that had bad undertones of future privatisation, which is why I challenged him on that point. Thankfully, he said on the record that there are no plans to privatise Network Rail, and we must certainly never go back to the disaster of the Railtrack venture.

The hon. Member for Lincoln (Karen Lee) made a plea for the improved services that have apparently been promised for Lincoln, and it would be good to hear the Minister’s response to that. She correctly pointed out problems with the existing franchise system, and the fact that tenderers are allowed to over-promise, under-deliver and walk away. There is something fundamentally and morally wrong with the fact that Virgin Trains East Coast was able to walk away owing the taxpayer £2 billion. The Secretary of State always says—the Minister probably does as well—that the £2 billion was not a bail-out, but if I let somebody who owed me £2 billion walk away from me, that would effectively be a £2 billion bail-out. Vtec had an IOU for £2 billion, and it was able to wrap it up and walk away. That is a bail-out, in layman’s language, and that money could have been invested in the railway. We have an investment of £780 million, but with £2 billion coming from track fees, that is old money being invested in rolling stock. I understand that the new operation will still generate track fees, but no private company should be able to walk away and still be involved in other franchise bids. It makes no sense.

I agree with the comments made about the franchise system, and I welcome the review into that. We must, however, move away from short-termism and towards longer-term plans for investment in the east coast main line. I agree with the hon. Member for Newcastle upon Tyne North about the need for the UK Government to work with the Scottish Government on cross-border planning and investment. The Scottish Government funded the reopening of the Waverley line down to the borders, which was the biggest new rail project in the UK for something like 100 years. We want that to extend further and become a proper cross-border connection again, and I ask the UK Government to work with the Scottish Government on that in the long term.

I cannot finish a speech on the railways without saying that the SNP wants Network Rail to be devolved to Scotland. The Transport Secretary keeps saying that Network Rail is such a problem, so why do the Tory Government not allow that part of Network Rail in Scotland to be devolved and become the responsibility of the Scottish Government, along with other operations in Scotland? That would perhaps help the efficiency of the east coast main line. It would save money spent on Network Rail, and any money saved could be reinvested. I will now conclude my remarks, and I look forward to hearing the Minister’s response.