First Great Western Rail Franchise

Theresa Villiers Excerpts

Tuesday 20th December 2011 Westminster Hall

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I want to thank my hon. Friend the Member for Truro and Falmouth (Sarah Newton)—in Christmas spirit, I will describe her as my hon. Friend for today—for introducing the discussion. This is very much a cross-party debate, and I am pleased that she has managed to secure it. I am even more delighted that she has presented the case in an incredibly well-informed and balanced way. I hope that the Minister accepts that she made a really thoughtful contribution to what I am sure will be an excellent debate.

It is essential that those involved in preparing the franchise listen to the views of MPs from across the south-west on the priorities for our region and the importance of connectivity. They also need to listen to our individual concerns about the reliability and frequency of services to the towns and cities that we represent.

In the past six weeks, I convened a meeting of all south-west MPs to discuss connectivity across our region, particularly in respect of the rail franchise. I am therefore delighted at the timeliness of this debate. The meeting was incredibly well attended, as is today’s debate. Significant numbers of people came, which is an indication of the importance that we place on getting this right. I should also put on the record my thanks—and the thanks of other MPs—to Chris Irwin from TravelWatch SouthWest, Andrew Seedhouse from Plymouth university, Ray Bentley and Neill Mitchell for helping to ensure the debate and meeting was well-informed. They supplied briefings to all colleagues and attended in person.

My hon. Friend the Member for Truro and Falmouth has drawn attention to the common themes, and I make no apology for repeating some of them. It is essential that those involved in drawing up the franchise understand clearly that we want the new franchise to address some common concerns. As I have said, we also want full consideration to be given to issues that are specific to our constituencies.

To be honest, predating this Parliament, we as a group allowed things to slip under the radar a bit when the last franchise was being prepared and we got caught out. When the previous franchise was announced, we found that it was set significantly below the previous standard. The standard of service then was not all that good, but when the previous franchise was first proposed, it would have made things a whole lot worse—for example, we would have lost the sleeper service.

One of the key messages that we want to send out is that we need to ensure that the starting point for the franchise is at least the base line of the current service and that it should not be any lower. I will come on to this again, but, ideally, we need to keep one or two things that we currently have. It is also essential to ensure that other Departments feed into the process.

Any reduction in service would clearly impact on business and economic growth in the region, particularly in Plymouth, where we have just lost our airport. That leaves Plymouth, the 15th largest city in England, as one of only two large cities that is more than 10 miles from a motorway that does not have an airport—the other is Peterborough. I am sure colleagues will understand that, if Plymouth is to continue to be an economic driver for the region, it is vital to have reliable, affordable and fast services to other large cities—in particular, London and Birmingham—as well as to Heathrow, and I will come to that issue later.

Will the Minister explain how she intends to ensure that the wider economic benefits of the franchise are considered across Departments? I gently suggest to her that the issues specific to the franchise, on which decisions have been made in the past about additional revenue from fares, have not fully reflected the wider benefits—those not found in the fares box. Too many Government decisions on transport and the franchise have been silo based. I urge her to talk cross-Department to her colleagues in the Department for Business, Innovation and Skills and the Treasury, as well as to seek the views of local enterprise partnerships across the region, because they, too, will have a significant input into the process.

Will the Minister say—this point has already been made, but it is incredibly important to business people in my area—whether there will be a five or six-year franchise, which is the rumour, or whether there will be something practical and sensible, such as a 15-year franchise?

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

It might be sensible to answer that now. We published a notice in the official journal of the European Union expressing our intention to go for a 15-year franchise.

[Alison Seabeck]

That is very good news. I am delighted about the Minister’s confirmation, because that has been a cause of concern.

During the MPs’ meeting, it became clear from the evidence that was presented that our region’s population is growing fast. That point was made earlier, but Ministers and officials in Whitehall need to understand it. In my experience of two different Governments, I do not think that people really understand the south-west. They think that it is a green, leafy place where people go on holiday, but it is growing fast and has a huge potential that is being missed. If we do not get the right franchise, everything we have to offer will be wasted. That is an important point, and I particularly want officials to understand what the south-west has to offer.

All those issues need to be factored in, and we need to ensure that the mismatch in rail fares, which patently hits the south-west, is also addressed. I am afraid that that is the outcome of another botched privatisation, but there is a genuine issue that is well documented by TravelWatch SouthWest in its very good document. We have seen the Chancellor rectify or consider improving and correcting a mistake that was made with South West Water. I do not know whether anything can be done about rail fares, but they are clearly an important issue.

I will make a couple of key points about Plymouth and services into our city, and I am sure that the hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile)—my hon. Friend for the day, too—will re-enforce them if he is lucky enough to be called to speak. First, as I have pointed out, there are serious connectivity issues relating to our city—a city of more than 250,000 people. Secondly, we need to enable people to do business with our city. That means being able to arrive early enough for morning meetings. Plymouth is one of the top 10 locations for fast growing business, but we need people to be able to reach us by 10 am, not by noon, so we would really like to see a train leaving Paddington at approximately 5.55 am.

We would like to see more three-hour journeys and greater reliability. The signalling improvements that are happening in Reading will help with that. We are also keen to have links to Heathrow, because, without an air link, good rail connections are absolutely vital for both business and tourism. We would therefore be interested in supporting the Heathrow hub link. Given the long journeys on the franchise—five to six hours for colleagues in Cornwall—it is essential that bidders consider both comfort and wi-fi provision. That would certainly help; a lot of business can be done on a train. I have not even touched on the importance of improving connectivity via community rail links, which are growing exponentially in the south-west, or the benefits of improving car parking, bus connections, walking and cycling linkages, which, although not directly issues for the franchise, deserve wider consideration.

Overcrowding, which has already been mentioned, is a huge issue throughout the system. It is a problem for the Paddington to Penzance main line, which is what we should actually call it, rather than lose it in the greater south-western service. As my hon. Friend the Member for Truro and Falmouth mentioned, First Great Western operates 147 trains—some 40 more trains than was set out by the original franchise. That should therefore be the base level for the franchise. Once rolling stock is freed up by changes in other parts of the country, my plea is that it should be diverted to the south-west and not channelled up to the midlands and the north, as has happened in the past.

Our region’s rail links have been neglected historically. They are often seen as far too difficult, but we have heard already in the Chamber today, and we will hear again, a consensual call for additional resources to come to our region for good economic reasons—there is a real cost-benefit to investment. I hope the Minister is listening and will ensure that all the issues raised today are discussed at the highest level in Government.

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[Lilian Greenwood (Nottingham South) (Lab)]

It is a pleasure to speak under your chairmanship, Sir Alan. I begin by congratulating the hon. Member for Truro and Falmouth (Sarah Newton) on securing the debate and on setting out so clearly the needs of local people and businesses in the south-west.

The debate is very timely, given yesterday’s issuing of the invitation to tender for the Great Western rail passenger franchise. It may be a coincidence that that was published on the eve of the debate, but if not, I congratulate the hon. Lady on prompting Ministers to get at least that part of their franchise programme on track.

I am sure that the Minister has listened carefully to the concerns of hon. Members on both sides of the House who are here to represent constituencies right along the route in relation to the new franchise. I shall pick out just a few of the key points that they made. They talked about ensuring that the baseline for the new franchise is no less than the current service, the need for fares to be affordable, the need for faster services, especially for the benefit of business passengers—the south-west region depends on businesses for economic growth—the importance of a link to Heathrow airport, the vital importance of tackling overcrowding, and the retention of a sleeper service to Cornwall. I hope that the Minister will be able to provide some assurances on each of those points.

Several Members welcomed the opportunity to provide long-term investment, but that surely requires a degree of certainty. It is therefore of great concern that invitations to tender for franchises are being issued before the Government have decided what their franchising policy is. The First Great Western franchise ITT states:

“The contract will be based on the Franchise Agreement currently being revised in line with Government policy.”

It would surely have been sensible to finalise the franchising policy and the franchise agreement in time for the publication of the invitations to tender.

Unfortunately, it is not just the franchise agreement that is yet to be finalised by Ministers; the entire rail strategy is now running late. The departmental plan promised to:

“Develop and publish detailed proposals on delivering a sustainable railway including reform of Network Rail”,

but that, along with so much else, has slipped back to 2012. It seems that the Secretary of State inherited an in-tray overflowing with decisions her predecessor had sat on. Given yesterday’s determination by the Office of Rail Regulation that Network Rail is in breach of its licence because of the worsening performance on the national network, passengers are right to be frustrated that there is no sign of the promised reform.

As the process of renewing the franchises begins, we are left with more questions than answers. For example, we are no nearer knowing how committed Ministers are to rail devolution, and neither are prospective bidders. The ITT says:

“In line with the Government’s aspiration for decentralisation, the franchise may be let so as to permit future changes in the way that discrete parts of the network”—

[Mrs Villiers]

I feel obliged to correct the hon. Lady. We have not issued an ITT for First Great Western yet. The ITT comes after the consultation. If we issue the ITT before the consultation, we are unable to take on board the views of stakeholders. I am not sure what ITT the hon. Lady is reading from, but it is not First Great Western’s.

[Lilian Greenwood]

I thank the Minister for her clarification, but it is the information that was published yesterday in relation to the future franchise.

The publication the Minister produced mentions

“changes in the way that discrete parts of the network are financed, monitored and managed by organisations other than the DfT.”

The Opposition support rail devolution, which should go hand in hand with stronger transport authorities. We would like parts of the country such as the south-west, which do not currently have the benefit of integrated transport authorities, to have them. That would give the constituents of hon. Members who are here today more control and the opportunity to ensure that their needs are met. Could the Minister therefore update us on progress on rail devolution? What plans does she have for the devolution of services in the south-west? Will she confirm that devolution relates to funds and not just responsibilities? In parts of the country such as the south-west, which do not have an integrated transport authority, who, other than the DFT, does she envisage will be the relevant organisations?

The Department is similarly vague on the eventual reforms to cost and revenue risk, saying only:

“Revenue risk will be subject to a support mechanism probably linked to economic factors”,

but “probably” seems a bit vague for this stage in the process. Will the Minster therefore provide further details of how she intends to ensure that taxpayers get a fair deal from the new franchise and that we do not have a repeat of the licences to print money we have seen in recent years?

The Opposition have been highly critical of the way in which First Great Western has been able to end its 10-year franchise three years early—before the Minister jumps to her feet again, let me say that I appreciate the fact that the contract was agreed under the previous Government. I hope this Government have learned the lessons from the franchises that were signed in the years following privatisation so that contracts do not back-load premium payments while allowing a break clause. That has enabled First Great Western to avoid payments of an estimated £826 million, while, as now looks likely, bidding to run the franchise again.

There are also questions about what is to happen to the stations on the First Great Western line, and several Members have raised particular concerns. The invitation that has been issued states:

“The franchisee will be expected to take full repairing leases on some or all of the stations that it operates other than on Network Rail managed stations.”

Why is there the reference to

“some or all of the stations”

and what will happen to the others? If a private train operator takes control of stations, will that be within the 15-year franchise, or on the basis of 99-year leases, as Ministers have suggested? If it is within the 15-year franchise, what will happen at the end of the 15-year period? If the franchise changes hands in 15 years, one possibility is that there will have to be a significant payment to the outgoing train operating company, thereby skewing the refranchising in its favour, or are Ministers opening up the prospect of an operating company retaining the management of the stations even after losing the franchise to operate the trains? Potentially, we could see station access charges as well as track access charges, with yet more work for lawyers, more fragmentation and more cost to the taxpayer.

There are also questions about the trains to be used on the First Great Western line under the new franchise. The document says:

“It is currently expected that the franchise operator will take responsibility for the provision of rolling stock. From 2017 new Intercity Express Trains (‘IEP’) are anticipated to be delivered to the franchise operator”.

Will the Minister explain why it is only “expected” that the new franchise holder will be responsible for rolling stock? Will she confirm that the Department cannot force the new operator to lease the IEP trains? Given the Department’s admission that the leasing costs for the IEP trains will be greater than for the alternatives, what assurances can she provide that the IEP trains will actually be put into service? Will she give more details about the discussions First Great Western, and indeed East Coast, are reported to have had with rolling stock companies about potentially using more Pendolinos on these franchises, as opposed to the IEP trains being built by Hitachi? It is incredible that the taxpayer has spent tens of millions of pounds developing these new trains, on which jobs in the north-east depend, when responsibility for leasing trains rests with the private operators. As several Members have said, it is vital that the new franchise increases capacity to tackle overcrowding, rather than pricing passengers off the railways. The hon. Member for South East Cornwall (Sheryll Murray) graphically described the problems of overcrowding on inadequate train carriages. It is therefore vital that we know what rolling stock is to be delivered.

Potential operators of the new franchise are also having to bid without the Government’s having decided how best to address the clear need to improve links to Heathrow and High Speed 2—if the Government decide, as we hope they do, to give HS2 the green light. As the document says:

“Options for longer term enhancements of rail links to Heathrow, such as Western Access and Airtrack Lite, are being considered”.

Whether they go ahead will have a significant bearing on the franchise. Will the Minister provide an update on the Government’s thinking on the issue, particularly given that several Members, including my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) and the hon. Members for Plymouth, Sutton and Devonport (Oliver Colvile) and for South East Cornwall have highlighted the loss of Plymouth airport and, therefore, the importance of establishing such connections?

As hon. Members know, the Opposition have put forward their own proposal, which would offer the south-west significant benefits in terms of access to Heathrow and HS2. Our policy review concluded that we were wrong to reject the proposal to create a major new transport hub near Heathrow linking HS2, Crossrail and the First Great Western main line. We have proposed moving the west of London stop from Old Oak Common to near Heathrow. That was previously the Conservative party’s policy, and it was backed at the time by the Minister. Indeed, some tell us—quite authoritatively—that she may still hold that view.

As the Minister will know, the creation of a Heathrow hub has several benefits. First, it has the potential to save taxpayers money, by removing the need to build an expensive spur to Heathrow during the later stages of the HS2 project and opening up the potential for greater private investment in the scheme. Secondly, it will benefit Heathrow by improving access to our major hub airport, especially from the south-west. Thirdly, it will increase the potential for more of the country to feel the benefits of HS2, not least by improving connectivity to the south, the south-west and Wales. HS2 will benefit the nation as a whole, but those living in parts of the country that are not directly served by it need to feel that those benefits are real to them. Fourthly, taking the high-speed line direct to Heathrow from the start will inevitably change the route and open up the prospect of making greater use of existing transport corridors and avoiding the widest part of the Chilterns area of outstanding natural beauty.

The debate gives the Minister a timely opportunity to provide clarification on the many questions that need answering regarding the Government’s rail franchising policy and particularly the tender for the First Great Western franchise. Passengers in the south-west need and expect a better rail service than the one they have at present. With six of the 10 most overcrowded services running out of Paddington station, there is a considerable need for the investment the Labour Government set in motion, not least for the further electrification of the First Great Western main line.

As well as investing in infrastructure, we need to improve the way passenger services are delivered. The Opposition are clear that that requires the genuine devolution of rail services and a fundamental review of the very structure of our rail industry. Given that the Government look set to maintain the existing industry model, we need, at the very least, to have tough new rules for rail franchises. We need to ensure that the often poor quality of service experienced by rail passengers in the south-west, which Members have described today, is not repeated in the future.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

It is a pleasure to serve under your chairmanship, Sir Alan, as ever. I congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing the debate at such a timely point. Yesterday, the Government fired the starting gun on the process for selecting the new franchisee with the publication of a notice in the Official Journal of the European Union. We propose to issue a consultation in the next few days, which we expect will close at the end of March. The debate is thus well timed, and I welcome all the speeches that have been made. As my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) put it, all hon. Members spoke with one voice about the importance of the process that we are undertaking. We will consider all the representations made today and during the consultation.

[Alison Seabeck]

On that very point, will the Minister promise today that she will take a meeting of all the south-west MPs, once that consultation is under way and we have had the opportunity to look at the franchise? We will certainly have views on it.

[Mrs Villiers]

I am happy to give the hon. Lady that undertaking. It will be a good contribution to the decision-making process.

Almost every hon. Member who has spoken has emphasised the economic importance of the Great Western rail network. They included my hon. Friends the Members for South Swindon (Mr Buckland), for North Swindon (Justin Tomlinson), for Plymouth, Sutton and Devonport and for South East Cornwall (Sheryll Murray), and the hon. Member for Plymouth, Moor View (Alison Seabeck). Clearly, it has a crucial role. Rail connectivity supports jobs and growth, and is, in particular, vital for the tourism sector, which is such an important part of the economy in the area served by the Great Western franchise. In response to the point made by the hon. Member for Plymouth, Moor View, it would be positive for the Department for Business, Innovation and Skills, the Treasury, local enterprise partnerships and local authorities to be engaged in the important decision in question.

Passenger demand has grown across much of the Great Western network in recent years, as many hon. Members have acknowledged.

[Neil Carmichael]

I hope that the Minister will take on board the need to modernise the rail track as a whole, so that we can get more trains on the track. That is certainly relevant to connectivity for my constituency, and will make a big difference to the network as a whole.

[Mrs Villiers]

Improving infrastructure is an important part of the way we are seeking to improve rail services on the Great Western network.

As an example of what I was saying about demand, passenger numbers on the Falmouth to Truro line have doubled since 2006. In the process on which we now are embarking we need, as my hon. Friend the Member for South Swindon said, to learn lessons from the serious mistakes made when the current franchise was let under the previous Government. After a reduced service was specified on some routes, demand increased considerably, once the new franchise became operational. That resulted in controversial crowding, compounded by significant problems with reliability. Following on from that, a number of services were added to the franchise over and above the contracted minimum. The coalition recently agreed to fund a further 54 carriages on the network, including roughly 4,500 extra seats on the Thames valley lines. However, as my hon. Friends have said, demand continues to increase, so that crowding levels are still a live issue for the franchise.

To respond to passenger concerns about crowding and to support the economy, jobs and growth, the Government have prioritised investment in our rail network. Our programme of rail improvements is on a bigger scale than anything since the Victorian era. Some of the most ambitious and important changes will be taking place in the area served by the Great Western franchise. They include the intercity express programme to deliver a new fleet of electric and bi-mode trains and extra capacity; electrification of the lines linking Paddington, Bristol, Cardiff, Oxford and Newbury; upgrades to signalling and train operating systems; provision of an electric suburban fleet; a massive redevelopment of Reading station; Crossrail infrastructure works and rolling stock introduction; and, last but not least, the redoubling of the Swindon-Kemble line. Ultimately those will generate major benefits for passengers and for the economy of the area served by the franchise. However, delivering a programme on that scale is bound to have an impact on services during the construction and delivery phase, so franchise bidders will be expected to present robust proposals for minimising disruption during the upgrade works, with a keen focus on the needs of passengers.

As several of my hon. Friends have acknowledged, we are reforming rail franchising to give operators greater flexibility to respond to customer demand in a commercial way, but within a framework set by the franchise, which protects key outcomes, key journey opportunities for passengers, taxpayers and the economy. Our starting point in setting the specification for the franchise will be the current level of service rather than the contracted minimum. We also expect the franchise to include requirements on passenger satisfaction, for example in relation to stations, which several hon. Members have called for. As I have said, we propose a 15-year term for the new franchise. We believe that the increased certainty that that will provide will encourage private sector investment in the railways and the sort of long-term thinking called for by my hon. Friends the Members for Gloucester (Richard Graham) and for South Swindon. A longer franchise should also make it easier for the new operators to build the long-term working relationships with Network Rail and other stakeholders, such as local authorities, that are crucial to an efficient and successful railway. We will be asking bidders to consider how they would strengthen the reliability of services and improve stations and trains. Throughout the process, Passenger Focus will have a vital role to play, emphasising the huge importance that the Department places on passenger concerns. We are grateful for the useful input that Passenger Focus has already given us.

My hon. Friends the Members for Gloucester and for Truro and Falmouth and the hon. Member for Plymouth, Moor View, and others, called for faster journey times on the route. Those would in some circumstances require investment in infrastructure. That, of course, would involve a call on the taxpayer. The case for such investment can be strengthened if the wider economic benefits of improved connectivity can be properly understood and analysed. There is obviously a unified view among my hon. Friends about that, and it may be productive for hon. Members to work with local authorities, LEPs and other stakeholders in the south-west, to evaluate more formally the potential benefits of the kind of infrastructure works that would improve journey times, and such things as further electrification, which others have mentioned today. Other relevant issues might be the adoption of the model that has been used successfully in the north, on the northern hub or in relation to east-west rail, with the overall costs and benefits, and the possibility of section 106 contributions to the line, mentioned by my hon. Friend the Member for Chippenham (Duncan Hames). If faster journey times would involve taking out intermediate stops, the concerns of the communities that value those stops would need to be fully considered.

I know how important the sleeper service is in the south-west. We are at too early a stage to be able to announce all the final decisions, but we would expect bidders to consider clearly and carefully the popularity of the service when they were developing their proposals for the train services to run under the franchise. We will also be interested to hear bidders’ and other stakeholders’ proposals on additional electrification. We can see great benefits in western access to Heathrow, and are looking seriously at that in conjunction with our work on High Speed 2. If the Government go ahead with their HS2 plans, the interchange at Old Oak Common would, as my hon. Friend the Member for Truro and Falmouth said, provide important new journey opportunities for people outside the south-west.

We fully recognise the concern about rail fares and the pressure they place on family budgets, which is why the Chancellor has secured funding to cancel the proposed RPI plus 3 increase and revert to RPI plus 1 for the January fare increases. However, we recognise that it is vital to provide a longer-term solution, which means getting the cost of running the railways down, so that we can provide better value for money for passengers. We will expect the new operator for the Great Western franchise to develop close working relationships with Network Rail, as they are essential for bringing the costs of the railways down, as Sir Roy McNulty demonstrated.

We are keen to explore the scope for devolving further aspects of rail to local authorities. We plan to publish in the near future a consultation on devolution options for rail services in England. We have been discussing devolution with a range of local authorities including Devon and Cornwall, which have expressed interest. There is plenty of scope to use existing mechanisms to strengthen the input of the community and local authorities in the refranchising proposals.

I welcome the speeches that have been made today. I hope that all hon. Members will take part in the consultation and encourage their constituents to do the same.

Rail Services from and to Scotland

Theresa Villiers Excerpts

Tuesday 20th December 2011 Westminster Hall

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I, too, congratulate the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) on securing this debate on the last day before the recess. Let me also say how much I always enjoy serving under your chairmanship, Mr Hollobone. You wisely advised us to take our time and look in some depth at the important issues under consideration.

The goal the coalition Government set themselves was to tackle the deficit we inherited and to build a solid foundation for economic recovery and growth. That means not only getting the best value for every pound of taxpayers’ money spent, but prioritising the spending that can best support growth, jobs and prosperity. That is why transport, including rail, came out of the spending review in a much stronger position than most people expected, and why the Chancellor gave the go-ahead for a further list of road and rail improvements in his recent autumn statement.

Rail services—be they services within England, the cross-border services we are discussing or services in Wales—are very much at the heart of our transport strategy. The programme of capacity expansion we are taking forward is bigger in scale than anything undertaken since the Victorian era. The comprehensive spending review allocated about £18 billion to rail, while the autumn statement provided further support, including £50 million for the replacement of vehicles for the Caledonian sleeper, as we heard in this morning’s debate.

As we also heard this morning, however, that is subject to co-funding by the Scottish Government. They have not yet announced whether they are prepared to co-fund the project and to match the funding the Westminster Government are prepared to provide. As we know, there are no nationalists here to defend the position of their Government north of the border, so we are, sadly, unable to question them about it directly. However, we will continue to engage the Scottish Government on this.

[Mr Russell Brown]

I thank the Minister for the information she has just given us. Is there a finite time for which that offer of money will lie on the table, after which she will need to say that it is no longer there? In her interaction with the SNP Government in Edinburgh, she will discover that they will prevaricate on a whole host of issues and that they tend to put one obstacle in front of another. Does she therefore have a finite time for how long that offer of money will lie on the table?

[John Woodcock]

Good question.

[Mrs Villiers]

That is a very good question. I am not aware that the Chancellor or the Department for Transport have set a time limit for the Scottish Government to respond, but rapid consideration of this important decision would be welcome, not least because of the support for sleeper services, which was mentioned by both hon. Members who have spoken. It behoves the Scottish Government to get a move on and make a decision on this. The Westminster Government have put their money where their mouth is in expressing support for the sleeper service and potentially allocating £50 million to support its long-term future. It is now for the Scottish Government to step up to the plate and decide whether they are prepared to match that funding or lose it.

Ultimately, the running of the sleeper service will be a decision for the Scottish Government, because it is part of the ScotRail franchise, which is devolved to the Scottish Government. Ultimately, Westminster will not take the decision. As I said, I recognise the concern felt north of the border about this proposal and others made by the nationalists in the Scottish Government. I hope the disadvantages of such proposals will be thoroughly considered when the Scottish Government ultimately decide whether to match the funding we have offered and include sleeper services in the upcoming ScotRail franchise.

The Government are committed to a range of other improvements on our rail network to support and improve cross-border services. As the hon. Member for Barrow and Furness (John Woodcock) said, the west coast main line was given a £9 billion upgrade under the previous Government to deliver faster and more frequent services. As he said, the delivery was somewhat painful for passengers, but real improvements have now started to be delivered. In addition, west coast passengers will benefit from 106 extra Pendolino vehicles, a number of which are already in operation, with the rest coming on stream over the next 12 months or so. The intercity express programme will provide a new fleet to replace the diesel 125 high-speed trains on services between London, Aberdeen and Inverness. It will also potentially replace the electric 225s on the east coast line if the franchise operator wishes to go ahead with that.

Significant improvements are being made to the infrastructure on the east coast line as part of Network Rail’s control period 4 programme, which is funded by the Government. These include major work on the joint line via Spalding and Lincoln to provide a diversionary route for freight and free up space for more passenger services. The long-awaited Hitchin flyover is also going ahead, as are major power supply upgrades to improve services for all passengers on the line, including those on cross-border services.

Those improvements will make a real difference to rail passengers travelling between Scotland and England. Although they are important, as the hon. Member for Edinburgh North and Leith outlined, they will not be enough on their own to deal with the long-term demand for inter-city transport capacity that our economy is expected to generate in the next 20 years. We expect rapidly rising demand for inter-city travel to outpace any measures we can realistically or practically take to boost capacity, given the constraints on existing lines.

That is why the Government have, this year, run a five-month public consultation—one of the biggest ever carried out—on proposals for a new high-speed rail network. The proposals would provide a step change in capacity and help bring our major conurbations much closer together. Our proposal for a Y-shaped national high-speed rail network would link London, Birmingham, Manchester and Leeds, with connections to the west and east coast main lines from the proposed new line. Those connections are crucial to today’s debate because they would allow the through-running of high-speed rail services on to the west and east coast so that passengers could reach Edinburgh and Glasgow without having to change trains.

The Y-shaped network, plus the ability for trains to run off it and on to the existing network, would, as we have heard, cut journey times between Scotland’s two biggest cities and London to about three and a half hours. That is an hour less than many of today’s services. Such journey time reductions could give significant connectivity and economic benefits to Scotland. I know that those things are important to many in Scotland, including, I am sure, the constituents of the hon. Member for Edinburgh North and Leith.

There are also benefits in relation to air-to-rail switch, which is worth mentioning in this context. Experience shows that when rail journeys come down to three or four hours, they become more competitive with air services. The coalition Government’s proposal for a direct link to Heathrow as part of phase 2 of the Y network would provide important connectivity benefits to Edinburgh and Glasgow, with a seamless and effective connection to our major hub airport.

[John Woodcock]

The right hon. Lady has mentioned the benefits of the Heathrow spur in the context of going all the way to Scotland. Has she not seen, for a long time, the value of going via Heathrow in the first phase, rather than building an extra spur afterwards at greater overall cost to the taxpayer?

--- Later in debate ---

[Mrs Villiers]

I think that there is consensus between the parties that it is essential to have a connection to Heathrow. The Government’s proposal to include a spur as part of phase 2 would provide a top-class link to Heathrow, which would be great for passengers in both Scotland and England. As to the route that the Opposition have been considering, although they chose not to submit it to the consultation, I believe that others have submitted routes that are more or less identical, and I assure the hon. Gentleman now, as I have before, that all the route options presented for consultation will be rigorously assessed before the Secretary of State makes her decision on High Speed 2, and, if she goes ahead, before she makes her decision on the route.

There is a detailed process—and it is right that it is very formal—to ensure that every person who contributed to the consultation will be listened to, and that their representations will be dealt with fairly. The shadow Minister invites me to pre-empt the Secretary of State’s decision on that. He knows that that would not be a terribly wise career move. I assure him that she will announce her decision soon, but he will just have to wait for her to make the announcement. It would be unwise of me to pre-empt it with one of my own.

[John Woodcock]

It would be good if the Minister could say a little more about whether the proposal for a single Bill is under active consideration. There is cross-party consensus on that, so would not it make more sense, in relation to both the business case and the stability of the project, to lock in a single Bill now, and take things forward together?

Given that we have time, perhaps I may make a second point. In opposition, the right hon. Lady was in favour of going to Heathrow as part of the first phase. That must count for something, must it not?

[Mrs Villiers]

I always have been, and continue to be, strongly supportive of a connection between HS2 and Heathrow. I am also strongly supportive of a thorough, evidence-based consideration of all the options on routes, which is exactly what the Secretary of State is undertaking. I imagine that, as we debate, she is probably poring over the detailed submissions summarising the consultation, which provide her with all the information that she needs to take a decision on whether to go ahead with the project as a whole, and, if so, on the best route. I am confident that she will take the right decision. As I have said, the shadow Minister will have to wait just a little longer to hear that. He well knows that the coalition’s plans and proposals include a direct link to Heathrow in phase 2.

On the hybrid Bill, again, as we have had many opportunities to debate, the Government have concluded that the best way to take HS2 forward as efficiently and rapidly as possible is by two separate hybrid Bills—one for the first phase in the west midlands and one for the second phase to Manchester and Leeds. There are pros and cons about the procedures either way, but changing course now and suddenly deciding on a hybrid Bill to accommodate both phases might slow down the project. I think it would be risky. What is important is that once the Secretary of State has made a decision we should take whatever steps are needed to press ahead promptly with implementing it. I hope that the cross-party consensus that the shadow Minister has mentioned repeatedly will prove useful in proceeding with high-speed rail if that is the outcome of the Secretary of State’s deliberations.

Of course, the goal set out in the coalition agreement is to deliver a genuinely national high-speed rail network. It is therefore a timely moment to consider the impact on Scotland. Although the Y network that we propose would bring important benefits to Scottish passengers and the Scottish economy, because of the journey time savings that we have talked about and the relief of capacity pressure that the shadow Minister referred to, we still recognise the strong support for extending the proposed new high-speed line north to Scotland in the future.

The Government share the aspiration of the hon. Member for Edinburgh North and Leith for high-speed rail one day to extend north of the border all the way to Edinburgh and Glasgow. He will appreciate that, constitutionally, the Scottish Government have responsibility for the rail infrastructure north of the border, including funding it. However, if we go ahead with HS2, phases 1 and 2, we will certainly expect to work with the Scottish Government on identifying and considering options for expanding the proposed high-speed network in the future. I assure him that there is no need to wait for completion of either phase before serious work is started in relation to potential further expansion of the network.

[Mark Lazarowicz]

I welcome the broad commitment that the right hon. Lady has given, but she will understand that although the Y-shaped route will clearly bring benefits to Scotland, because of the effect on rail speeds and capacity further south, it will by definition not help with capacity once the end of the Y line is reached and the journey continues on existing lines to Edinburgh and Glasgow. If anything, there might be capacity problems, because of extra trains on those lines. Can the right hon. Lady give any indication of the type of discussions that are going on with the Scottish Government? I get the impression that they are something that may happen one day, as she said; but we want more of a commitment than that. We want an indication of what work is going on now, and a commitment that preparation should start now.

[Mrs Villiers]

I assure the hon. Gentleman that officials from HS2 and the Department for Transport have regular discussions with Transport Scotland about high-speed rail. I have discussed it with Scottish Ministers on several occasions. The Secretary of State for Defence also discussed it, when he was Transport Secretary, with Scottish Ministers. Indeed, HS2 is already considering options further to reduce journey times to Edinburgh and Glasgow. We recognise the enthusiasm for further work on expanding the proposed high-speed rail network. As I have said, we share the aspiration of establishing a genuinely national network, which must of course include Scotland.

[Mr Russell Brown]

I would like to share with the Minister and hon. Members an infrastructure-related problem—albeit not to do with rail—which my ex-colleague the former Member for Carlisle, Eric Martlew, experienced when the M6 was brought north to Carlisle. For some reason it stopped there. When he asked an official why it stopped at Carlisle, he was told the road did not go anywhere. In other words, there was no need to take it to the border, or even into Scotland, which fell under the remit of the Scottish Office at that time. I have to share that worry with the Minister. We have a line that comes so far north, and we have this mindset that it goes nowhere. Colleagues in Scotland will be forcing the issue with the Scottish Government to engage in a process to make sure that something is happening north of the border that ensures that we get UK coverage of this railway.

[Mrs Villiers]

Mr Hollobone has given us great latitude to wander far and wide in the debate, but I am afraid that I do not have a very detailed knowledge of the history of the construction of the M6. I assure the hon. Gentleman that it is always wise to learn lessons from what has gone wrong with previous transport projects. I reiterate the importance that we place on playing our part to supply a high-quality transport network for the country as a whole. As I have said, infrastructure matters north of the border are rightly devolved to Transport Scotland, but we recognise the importance of our decisions on high-speed rail taking into account fully the interests of the economy and passengers in Scotland. That is why we are happy to engage with Scottish hon. Members and the Scottish Government. We need to view, with careful scrutiny and perhaps some scepticism or reservation, the promises that Scottish Ministers are now making about high-speed rail. It is difficult to judge whether their promises on funding are watertight, but we certainly welcome the enthusiasm with which they support the principle of high-speed rail.

Before moving on to through services on the current network, I will respond to the shadow spokesman’s criticism that the Government were somehow insufficiently supportive on high-speed rail. I remind the hon. Member for Barrow and Furness that we were the first to champion the benefits of high-speed rail. Indeed, we were doing so when Labour’s 30-year strategy for the railways, published in 2007, had no place at all for high-speed rail.

One of the other key issues raised by the hon. Member for Edinburgh North and Leith was the controversial consultation document issued by Transport Scotland on the service pattern for the new ScotRail franchise to be let from 2014 onwards. As we have heard, that has posed a question on whether services north of Edinburgh should be a matter for the Scottish franchisee. As we have heard, that would mean cross-border services terminating at Edinburgh Waverley, with onward connections to Aberdeen and Inverness provided by ScotRail. That proposition has been dubbed the “Edinburgh Hub” by Transport Scotland.

As we have heard, the Scottish Government make three assertions on the effect of that change. First, they assert that it would return greater revenue to the Scottish franchisee and reduce taxpayer subsidy—that might be a controversial claim. Secondly, they claim that moving to just one operator would improve resilience—that ought to be carefully tested. Thirdly, they claim that the change would give the ScotRail franchisee more freedom and flexibility in timetabling and running services. Fourthly, they claim that there are advantages in vesting control over services north of Edinburgh in a Scottish franchisee with no reliance on services specified by the Department for Transport.

One of my concerns is whether that is an ideologically-driven proposal motivated by a wish to control as many rail services in Scotland as possible. I would be very concerned if that was a motivating factor behind Transport Scotland’s fairly startling proposals. It is very important for the decision to be made on a clear and calm assessment of the potential effects of such a change.

The proposals generated considerable opposition and debate in Scotland. We have had discussions with the Scottish Government and Transport Scotland about the implications of such a change. As hon. Members might recollect, this issue has cropped up before. In considering whether to proceed with the intercity express programme, the Westminster Government looked at whether east coast services should terminate at Edinburgh, so that they could all be provided by electric trains. We decided against a rolling stock option that would have required passengers to change trains at Edinburgh, because we were concerned about the implications of such a change. That is the conclusion that we reached, so, as the hon. Gentleman invited me to say, I certainly would have reservations about the Scottish Government’s proposal.

If, following the consultation, the Scottish Government decide that they would like this change to take place on the east coast line, we would of course consider their proposal in accordance with our mutual respect agenda. However, hon. Members have been clear in outlining the disadvantages of such an approach, which, as I have said, would have to be very carefully considered. It is disappointing that no one is here to defend the nationalists’ position or explain why they have chosen to consult on such a controversial proposal.

[John Woodcock]

I appreciate what the Minister is saying, but if she feels so strongly, would it not make more sense, for good governance, to be clear now that the proposal is not a goer? We would not need to go through the consultation, wait for a response and see whether something comes through. If she made it clear that this is not something that she would accept, it would allow people to go forward with greater clarity.

[Mrs Villiers]

I think that that would be unwise, because the Government take devolution very seriously. We are talking about rail services provided in Scotland. It is certainly not at all unreasonable for the Scottish Government to wish to have an input in how those services are run. At this stage, it would be inappropriate for the coalition to start dictating the outcome of a consultation on the ScotRail franchise. I will therefore confine my remarks to saying that we would have reservations about a route down which we did not chose to go in relation to the IEP, but we will listen to the Scottish Government if they choose to pursue that further.

[Mark Lazarowicz]

I am not asking the Minister to veto the Scottish Government’s proposals, if they go along the line of a Scottish franchise that takes on board the services north of Edinburgh, because I accept that devolution exists and that the Scottish Government have the right to put forward their views. My point is that we are discussing UK services as well, and I ask her to take that on board. If the Scottish Government decide on such proposals, I hope that she will ask them to ensure that the new franchisee will still be required to maintain cross-border services.

[Mrs Villiers]

I certainly take those points on board, but closing down the debate at this stage would not be appropriate, because it would be undermining, and we respect the devolution settlement and want to pursue an agenda of mutual respect. We would consider such proposals from the Scottish Government if they chose to go ahead. As I said, we need to weigh carefully all the appropriate evidence. If the proposal were indeed motivated by some political separatist agenda, that would be a real concern. A final decision will need to be made in time for the publication of the invitation to tender for the next east coast franchise in the autumn next year.

The shadow Minister mentioned performance on the east coast line. It has certainly been disappointing; the performance of both the train operator and Network Rail has been below the levels expected. Cable theft has had a major effect, and we are discussing co-ordinated action throughout the Government, with a view possibly to increase the punishment for cable thieves and to clamp down on rogue elements of the scrap-metal industry.

The west coast main line, meanwhile, has also experienced a performance dip in recent months, mainly owing to track faults and other infrastructure delays. I am afraid that performance on the two routes has contributed to the Office of Rail Regulation’s recent warning to Network Rail, set out in a letter of 19 December, that the company is in danger of breaching its licence conditions for the long-distance sector and will miss its regulatory targets for the sector this year. The ORR made it clear that it expects Network Rail to submit robust plans for improving performance on key routes such as those on the east and west coasts. The Government, too, believe that performance needs to improve, and we are fully supportive of the action that the ORR has taken.

Concerns about fares have been expressed. The fares that people pay are of course making an essential contribution to the massive rail upgrade programme that is being delivered and to which I referred at the start of my remarks. Some cheap fares for cross-border services are available to those who can book ahead and commit to a specific service, but we recognise that it is not always possible to do that. We understand the concern about rail fares and the pressure that they put on family budgets. That is why, in the Chancellor’s autumn statement, he announced that funding had been secured to cancel the proposed increase of the retail prices index plus 3% planned for next year and to revert to an RPI plus 1% increase for the fares coming into effect in January. That covers cross-border services on the east and west coast main lines, as well as others in England.

If we are to provide a lasting solution to passenger concern about fares, however, it is vital to get the cost of running the railways down. Sir Roy McNulty’s report, referred to briefly in the debate, set out a path that he believed would achieve significant savings without cuts in service provision. At the heart of his recommendations are measures to align incentives between Network Rail and the train operators. Put simply, we need to ensure that the two sides of the rail industry, track and train, work better together, with a strong shared incentive to get costs down and to improve outcomes for passengers. We are determined to deliver effective savings on the railway, so that we can deliver the improvements that passengers want and respond to their concerns on value for money.

I am grateful to hon. Members for listening with such patience to my remarks on cross-border rail services this afternoon.

[Mr Philip Hollobone (in the Chair)]

After a leisurely journey across the rail network, both north and south of the border, we have reached our destination early. I thank all Members for taking part.

Parliamentary Written Question (Correction)

Theresa Villiers Excerpts

Wednesday 23rd November 2011 Written Statements

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I regret to inform the House that there was an inaccuracy in the answer I gave to parliamentary question 71220 on 13 September, Official Report, column 1072W, about information held for each individual transaction undertaken by British Transport police using the Government Procurement Card in (i) 2008-09 and (ii) 2009-10.

The correct answer is that this Government are committed to transparency and we believe the information regarding Government Procurement Cards for this financial year is the most relevant. Central Government Departments are now publishing any transactions over £500 on their websites, starting with 2011-12 quarter 1 (April-June) data and thereafter on a monthly basis. The cost of work required to obtain, contextualise and report data for previous years would exceed the cost limits of a freedom of information request or a parliamentary question.

For purposes of transparency, the Department for Transport now lists GPC spend (http://data.gov.uk/dataset/dft-gpc-spend) on its website. This includes details of spend by the British Transport police.

Bletchley-Oxford Rail Link

Theresa Villiers Excerpts

Tuesday 15th November 2011 Westminster Hall

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

It is a pleasure to serve under your chairmanship, Mr Caton, and I congratulate my hon. Friend the Member for Milton Keynes South (Iain Stewart) on securing the debate. I welcome the opportunity to consider the merits of the east-west rail proposal, and I welcome the strong attendance from MPs who support the project.

Like those of my hon. Friend, my remarks will focus on the western section of the project—the part most developed—although I may touch briefly on the central section if time permits. He has outlined with great clarity the potential benefits of reopening the line along the western section, and described the boost to economic growth that he believes it would bring, as well as the improvements in journey times, the potential for a modal shift in transportation and, not least, the potential boost to high-tech industries.

I was very impressed by my hon. Friend’s contribution, and I was equally impressed by the presentation I received on this project last year, when my hon. Friend, together with my hon. Friend the Member for Milton Keynes North (Mark Lancaster), brought the chairman of the East West Rail Consortium to see me. At that useful meeting I agreed that the Department for Transport would work with the consortium in developing its plans, and that work has since progressed.

The Department has started evaluating the consortium’s plans and forecasts as we prepare the high-level output specification that will set out the Government’s requirements for rail control period 5 from 2014 to 2019. We will consider seriously whether we can provide funding to support the east-west rail project as part of CP5. We have heard today from hon. Members on both sides of the Chamber about the impressive value-for-money case that it seems can be established for the project. However, value for money on its own is not enough. We also need to consider affordability. There is no doubt that this is a very substantial scheme. Whether it proves affordable depends on the extent of alternative sources of funding available to support the project. It also depends on how the benefits of delivering the project compare with competing priorities for CP5—for example, the northern hub or other proposals to improve connections between our northern cities.

As my hon. Friend the Member for Milton Keynes South said, east-west rail is not in the initial industry plan put forward by the rail industry for CP5, but I can assure him that this project will be considered just as seriously as the proposals that are in the industry plan. It is worth noting that the industry plan does make provision for east-west rail, notably in relation to Network Rail’s proposals for Oxford station. I can also happily inform my hon. Friend that the Association of Train Operating Companies is providing expert advice to the Department on the best-value long-distance passenger services that might use the route if it goes ahead. That is assisting our evaluation of the project and could enhance the value-for-money case for east-west rail.

I have been very impressed by the work of the consortium as well as the supportive MPs. The collaboration of the 20-plus local authorities in the consortium provides a good example for others to follow in building a broad local consensus for an ambitious vision of new rail infrastructure to support economic growth and, potentially, housing growth.

[Richard Fuller]

Will my right hon. Friend deal with an issue that is gaining currency for some of us who represent constituencies in the eastern area and in the south-east? Government investment priorities sometimes overlook the fact that there are significant areas of deprivation in the south-east. There is a tendency to favour projects in other parts of the country. This project is not only vital to economic growth, as has been mentioned. It is also of value in restoring opportunities for job creation in areas and pockets of significant deprivation. Will she deal with that issue?

[Mrs Villiers]

Certainly I will. My hon. Friend the Member for Pudsey (Stuart Andrew), who is sitting beside my hon. Friend the Member for Bedford (Richard Fuller), often berates me for not committing sufficient funding to rail infrastructure outside the south-east. The reality is that the Government must consider carefully where taxpayer funding will deliver the greatest economic benefits. Whether we are talking about deprivation in the south-east or in the north, that is a crucial issue that we need to consider to take the difficult decisions on where to prioritise funding. We do not at all assume that everywhere in the south-east is prosperous. We know that improving our transport infrastructure in both the south and the north can deliver major benefits in quality of life, jobs and growth. That is why we are seeking to roll out a major programme of investment that helps the whole country.

The consortium has funded much of the cost of its work on the project to date, steadily developing its plans so that they stand on an equal footing with projects being proposed by the rail industry nationally in the IIP. The consortium has also explored ways for local authorities to use the forecast economic growth to fund part of the building costs if the project gets the go-ahead. That could make the project much more affordable, as we have heard. If we can agree to provide some funding for east-west rail as part of CP5, we may look to the consortium to make good on those local contributions on which it has been working so hard.

[Ben Gummer]

Certainly many of us will welcome the tone of the Minister’s statement, which is exciting. In the mix is the Greater Anglia franchise, which I know she is working on and which will start in 2014. A component of that will be infrastructure improvements. As much of this line falls within that franchise area, I wonder whether it would be possible to draw within the franchise a need for the new holder to invest in it as part of the franchise.

[Mrs Villiers]

Time constraints prevent me from going into the detail of what might be included in CP5 for the Greater Anglia area, but I am well aware of my hon. Friend’s campaign to improve the infrastructure there. That will be considered very seriously as part of both the HLOS process and the refranchising process.

Different ways of delivering the project have been carefully assessed by the consortium, with each one being tested for efficiency. I welcome, for example, its work on finding a lower-cost approach to planning consents, with a mix of permitted development rights and local authority planning permission.

The Government are already working on projects that could benefit the east-west rail corridor. As my hon. Friend the Member for Milton Keynes South said, the route between Oxford and Bicester Town, as well as being part of the east-west rail project, is being upgraded under the Chiltern Evergreen 3 programme. That will deliver new train services between Oxford and London Marylebone by 2014. Our agreement with Chiltern Railways includes funding the cost of strengthening the bridges and improving the tunnel, which will ensure that that section is capable of accommodating possible traffic resulting from east-west rail. Chiltern has planned its improvements so that the section is ready for a further upgrade of track and signals. Again, if east-west rail happens, that will be necessary.

My hon. Friend was brave enough to mention HS2. If HS2 goes ahead along the preferred route put forward for consultation, that could co-exist with east-west rail; there would be some synergies, potentially. The preferred route for HS2 would run parallel to east-west rail, between Quainton and Claydon. The operation of HS2 could free up busy parts of the west coast main line, including Milton Keynes, enabling new regional and local services to be run. That could improve the business case for east-west rail by providing space for more long-distance connecting journeys.

On my hon. Friend’s proposal for an HS2 station, I can assure him that we are considering with great care all the consultation responses, including all those that have proposed new stations. He proposed that we should fast-track east-west rail and deliver it by the end of the Parliament. I see that as quite an ambitious goal, but I will take it on board in discussions in the run-up to the growth review.

I think that the consortium is right to concentrate on the western section of the route. The case for reinstating the central section between Bedford and Cambridge is less developed. However, it is generally accepted that if the western section gets the go-ahead, that will be the time for more substantial work to see whether we cannot take forward the rest of the project at some future point.

The railways are experiencing a renaissance in 21st-century Britain. More people are travelling by train than at any time since the 1920s. Despite a deficit as serious as any in our peacetime history, we are undertaking the biggest programme of rail upgrades since the Victorian era. In the days before privatisation, projects on the scale of east-west rail to reopen lines closed years previously would have been scarcely conceivable. Now, they are not just conceivable, but credible and even realistic. However, despite—

[Mr Andrew Smith]

Will the Minister give way?

[Mrs Villiers]

I am about to run out of time. Despite the strength of the business case, there is no doubt that a very large amount of investment—about £250 million—is required to rebuild the route, and the expanded train services would probably require extra subsidy in the early years of operation. Ultimate success will therefore depend on a continued focus on getting costs down and bringing in additional funding sources. It will also depend on what is affordable, taking on board competing priorities for CP5. This debate has provided a very welcome opportunity to consider those issues and is a valuable contribution to the preparation for the HLOS statement and the Government’s decisions on what it will be possible to fund in the CP5 period.

[Mr Andrew Smith]

Before the Minister concludes, will she give way? There is still time remaining.

[Mrs Villiers]

I will.

[Mr Smith]

The Minister has referred several times to CP5, and like others present, I welcome the tone of her statement. When might we expect a further statement on the prospects for this important project?

[Mrs Villiers]

We are continuing to assess this. The HLOS statement will be published in the summer. I think that the latest deadline for that is July, but we have not set a specific date for publication. In the meantime, we will continue to work on this project, alongside the consortium, and as and when there is an announcement to be made or progress to be announced, I will ensure that the right hon. Gentleman is the first to hear about it.

Aviation Industry

Theresa Villiers Excerpts

Tuesday 15th November 2011 Westminster Hall

[Mr Donohoe]

I will come on to that as well; I have a speech that I would like to continue with. Last month, another runway was opened in Frankfurt, which will impact more and more on the position of the UK aviation industry.

The lack of hub capacity could cost the economy right now some £1.2 billion a year in lost trade. The CBI and other organisations, such as the Institute of Directors, say that that must be tackled if the UK is to maintain its global competitiveness, and I support them.

The coalition reversed the previous Government’s plans to build a third runway at Heathrow and, as I understand it, oppose the building of new runways at Stansted or Gatwick, which runs at 78% capacity. The coalition has said that it will produce a new aviation framework by 2013, but we need to bring that forward. It is clear that unless we do so, we will lose business.

As a reminder, the UK is the sixth biggest economy in the world. The world is becoming increasingly interconnected, and its centre of economic gravity is moving further east, but the UK does not have a cohesive aviation policy. The coalition has allowed us to fall far behind. Frankfurt opened its fourth runway just last month. France’s Charles de Gaulle already has four runways, and Schiphol, which is becoming more and more of a direct competition, now has six. We therefore have to think about where we are going in the future. Is it important for us to continue having a hub airport in the first place? One wonders whether that should be the way forward.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I hope I can reassure the hon. Gentleman. Will he welcome the fact that passenger numbers at Heathrow have reached record levels over recent months? I recognise the crucial importance of Heathrow airport, which is why the Government have arranged a programme to ensure that Heathrow is improved and works better, with reforms to security and other measures, which I will talk about in my speech.

[Mr Donohoe]

It would be wrong not to. Indeed, there is the possibility of further expanding the number of take-offs and landings by increasing the number of mixed-mode operations, which I understand are still being operated at Heathrow. That will allow it to expand further. The problem with that is all the environmental issues will start to create a real problem, because the noise in the air would become far greater than the noise today. Given the size of Heathrow, there is a clear argument, as the industry and all whom I know have been making for some considerable time, for further expansion through a third runway.

[Mrs Villiers]

I am afraid that in this instance I may have to disappoint the hon. Gentleman. The trial that is under way at Heathrow is not mixed mode, but a series of operational freedoms geared at improving resilience and tackling and mitigating delays. Those freedoms are substantially different from mixed mode because we are great supporters of runway alternation.

[Mr Donohoe]

I will always be corrected by the Minister in that respect. Under the previous Government, there was a trial period of mixed mode. I understood that the only way we could increase the number of passengers going through the airport was if we brought mixed mode into operation. I do not think I will be proven wrong in that respect.

--- Later in debate ---

[Mrs Villiers]

Just to reassure the hon. Gentleman, the Government have never said that we have ruled out any capacity expansion in the south-east over that period. What we have said is that the coalition will not give permission for new runways at Heathrow, Gatwick or Stansted. That is not the same as saying that there will be no expansion in the south-east ever, under any circumstances.

[Mr Donohoe]

I take that point on board, but the Minister is drawing a very fine line in that sense, because I would argue that unless there is an increase in the number of runways, the potential for increasing the service all that much is very limited. I think I would be proven correct by asking the views of those in the industry itself. That is the clear answer I get to the point she is making.

There is no doubt that capacity in the south-east is restricted. As I argued earlier, the south-east is where the need for more air transport services is greatest, yet there is less ability to extract more capacity from the existing infrastructure. Heathrow and Gatwick continue to operate at nearly 100% capacity, even with continuing reductions in domestic services.

Looking to the future, in a global and highly competitive industry such as aviation, any demand management measures implemented by the UK Government would have far-reaching consequences for the economy, jobs and our connectivity with the rest of the world.

--- Later in debate ---

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing the debate, and on Rosie’s arrival. I would also like to associate myself with the comments made about the late Alan Keen and his sad, recent death. He had a long and distinguished record on aviation matters.

I agree wholeheartedly with the importance that hon. Members have attributed to the aviation industry as a strong part of our economy and a vital gateway to the global marketplace for business. Many hon. Members made that point, including the hon. Members for Blackley and Broughton (Graham Stringer) and for Central Ayrshire. I also welcome the emphatic support for the aerospace industry provided by my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti). Supporting and providing the right economic climate for manufacturing to flourish is a hugely important part of the Government’s overall economic strategy. It is crucial that aviation in the UK is able to grow and prosper in the future, but I think we are agreed that a dash for major aviation growth regardless of cost is not the right approach. That is why we are developing a new aviation strategy to set out the way forward that will allow the British air transport industry to grow in the years and decades ahead, as well as addressing its environmental and quality of life impacts. No one underestimates the scale of the challenge, because reducing harmful emissions through greener technologies is more complex in aviation than in other transport sectors and will take longer to deliver.

In response to the points made on air passenger duty, we have listened with care to industry concerns, which is why we have made it clear that switching to a flight tax is not viable without wider international support for such a move. We have postponed this year’s inflation-based increase in APD, and proposals for further reform of the tax will be published soon.

In response to the hon. Members for Central Ayrshire and for Blackley and Broughton on the issue of the Thames estuary airport, as the Prime Minister has said, the Government have no plans to build a new airport in the estuary, or in Medway or elsewhere in Kent. The hon. Member for Central Ayrshire outlined some of the practical issues that would have to be surmounted before such a programme could go ahead, including, of course, the very significant airspace capacity issues. Nor do we have plans to redevelop Northolt as a third runway for Heathrow.

I agree with my hon. Friend the Member for Reading East (Mr Wilson) that surface access to airports is a crucial part of making them successful. That is why Crossrail and Thameslink are going ahead—both will improve access. We continue to consider other options for western access to Heathrow, including work that could be co-ordinated with the proposed HS2 spur to Heathrow.

We have made it clear that a key plank of the Government’s approach to aviation is the cancellation of Labour’s misguided plans for a third runway at Heathrow. I find it ironic that the shadow Secretary of State, the hon. Member for Garston and Halewood (Maria Eagle), accuses us of having no policy, when the previous Government spent 13 years on an aviation White Paper that everyone agrees is no longer fit for purpose, and on pursuing a runway that is universally agreed to be absolutely the wrong approach for the UK economy. One of the coalition Government’s first acts was to cancel the third runway at Heathrow. I continue to believe that the price in terms of the environmental impact would have been far too high, given that noise already has a significant impact for thousands of people living with a plane overhead every 90 seconds. At the time, Labour described our position as

“politically opportunistic and economically illiterate”.

It seems that those on the shadow Front Bench have learned the error of their ways—but not all on their Back Benches.

We are clear that we need to protect and enhance the connectivity that is vital for our economy, which is why Heathrow’s success as one of the world’s busiest and most successful international airports is so vital. Our aviation strategy is designed to ensure that the UK maintains and improves the success of this leading international gateway. There is no evidence that Heathrow is about to lose its hub status. It remains an immensely successful airport, with more services to China than any of its European rivals, and a particularly strong connection with Hong Kong as China’s main hub airport. Our immediate priority is to make our airports work better within their existing capacity limits.

[Henry Smith]

I was delighted to welcome the Minister to Gatwick airport last month for the opening of new security gates. Will she congratulate Gatwick airport on the more than £1 billion of investment that it is making in enhancing capacity? Indeed, Sir John Major will open the renewed north terminal on Thursday.

[Mrs Villiers]

I am happy to offer my congratulations on that. Contrary to the allegation that the Government have created a policy vacuum, we have a range of initiatives designed to make our airports better—our priority is to make them better, rather than bigger. We are legislating for a much more passenger-focused system of regulation. We are improving air space management through the Future Airspace Strategy in the Single European Sky programme, which is already delivering real benefits in the UK and Ireland. We are changing the way aviation security is regulated to enable the industry to deliver the same high standards in security, but in a more passenger-focused and more hassle-free way.

Our south-east airport taskforce also included proposals to improve resilience and address delays. As a result, we are trialling the tactical use of greater operational freedoms at Heathrow. This is very sensitive, because those freedoms mean that occasionally there will be some incursions into the respite period, with occasional use of both runways for departures, or, occasionally, use of both runways for arrivals. However, I emphasise that that is not mixed mode and the Government remain committed to runway alternation and the benefits it brings. Very careful consideration will be given to the impact of the trial on local communities. I emphasise that the measures being trialled are to be used only to improve resilience, and prevent or recover from disruption, and not to increase capacity, which remains capped at current levels.

We have published our scoping document, setting out the issues to consider for the future of aviation. We know how crucial it is to have a successful regional airport sector, as hon. Members have highlighted today. We will look at ways to harness spare capacity to support economic growth and help to relieve crowding in the south-east. High-speed rail has strong potential to provide an alternative to thousands of domestic and short-haul flights. HS2 to Manchester and Leeds will deliver a three and a half hour journey time between London and Scottish destinations, providing a viable alternative to thousands of Scottish flights.

[Maria Eagle]

Will the Minister give way?

[Mrs Villiers]

I am sorry, but I really do not have the time. We accept that the international nature of aviation, as has been said, means solutions are often best delivered at a multilateral level. That is why we are working with the International Civil Aviation Organisation towards agreement on emissions and on noise issues. That is why we have worked very hard on the inclusion of aviation in the emissions trading scheme. We will publish our draft strategy in spring next year for public consultation, with a final strategy due in 2013. We want to see Britain, and British companies, spearheading the global debate on greener air travel and shaping a low-emission aviation sector of the future. We need to work with the industry to find new ways of decarbonising air travel, boosting investment in low-carbon technologies and fuels, and enabling the aviation sector to generate the headroom it needs to grow in a sustainable and successful way. Our world-beating aerospace sector will play a vital role in that. The challenge creates great opportunities for that world-beating sector.

We want to open a new chapter on the aviation debate. We are interested in working on a cross-party basis, as has been discussed today. Our goal is to move away from the polarised opinions that have dominated the discussion in the past. We want to develop a broader consensus for the change we need to deliver a flourishing air transport sector that can support economic growth, while addressing its local environmental impacts and playing its full part in combating climate change.

[Mr Roger Gale (in the Chair)]

Order. I owe an apology to the Minister and to the Opposition Front-Bench spokesperson. It does not happen all that often, but I am afraid that, so captivated was I by the quality of the Back-Bench debate, I misread the clock. I apologise to both Front Benchers.

I am also sorry that I was unable to call the hon. Member for Crawley (Henry Smith), but his constituents will have noticed from his intervention that he was assiduously present throughout the debate.

Finally, while I am on my feet, I express my pleasure at the birth of the granddaughter of the hon. Member for Central Ayrshire (Mr Donohoe).

Oral Answers to Questions

Theresa Villiers Excerpts

Thursday 10th November 2011 Commons Chamber

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

5. What plans she has for future funding for railway stations.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The comprehensive spending review secured funding for a range of major station improvements to be delivered over the next few years, including Reading, Birmingham New Street, Blackfriars and London Bridge. Proposals for a number of new stations are under consideration for support from local transport funds. Further funding for station improvements over the 2014-2019 period will be considered as part of the high level output specification process. Additionally, one of the goals of our franchise reform is to encourage more train operator investment in railways including in stations.

[Paul Maynard]

Many hon. Members will have admired St Pancras station as an example of what a station can be and will have wished that their own nearest mainline stations lived up to that standard. I welcome the Government’s move to transfer responsibility for stations from Network Rail to franchise holders, yet the fact that many of the investments required in mainline stations cannot be recouped in the course of one single franchise period means that operators are disincentivised from making those investments. Will the Minister ensure that the final invitation to tender for the west coast main line issued in the new year addresses that anomaly?

[Mrs Villiers]

My hon. Friend makes an important point. I assure him that there is always space for taxpayer funding for bigger-scale station upgrades. In terms of encouraging train operators to invest in station improvements, I also agree that we need to find ways to encourage them to invest in long-term projects that may have a pay-back period beyond the end of the franchise. One of the ways we are addressing that is with longer franchises, but we are also working carefully on how we improve the mechanisms for delivering a residual value at the end of the franchise for just the sort of investments he wants to see.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Minister will have heard the report this morning about the tremendous gap between London and the south and the rest of the country. Many of us look at the wonderful Cannon Street glass palace and the work on King’s Cross, but we wonder when we are going to get that level of investment in the regions of this country, particularly in the north, and when we are going to get the smaller stations upgraded so that they are civilised places to catch a train.

[Mrs Villiers]

The hon. Gentleman raises a very important point. It is crucial that we do all we can to close the north-south economic divide. That is part of the reason for driving forward high-speed rail. It is also partly why we are carrying out major investment in electrification in the north of England to improve stations such as Manchester Victoria, using funds such as the national station improvement programme, together with Access for All, and reforming the franchise system, as I have said, to encourage private sector investment in improving stations and improving transport connections between our northern cities. The go-ahead for the Ordsall chord is also welcome on that score.

[Rehman Chishti (Gillingham and Rainham) (Con)]

7. What steps her Department is taking in respect of winter resilience on the roads and railways.

--- Later in debate ---

[Tim Farron (Westmorland and Lonsdale) (LD)]

14. If she will establish a public inquiry into the Grayrigg train crash in February 2007.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The Grayrigg derailment was thoroughly investigated by the rail accident investigation branch in its 2008 report. The accident also received detailed scrutiny during the inquest into the tragic death of Mrs Masson. Ongoing rail industry actions continue to address issues arising from Grayrigg. The Government have therefore decided not to set up a public inquiry.

[Tim Farron]

Our thoughts and prayers must be with the family of Mrs Margaret Masson, following the conclusion last week of the inquest into her tragic death at Grayrigg in 2007. The inquest revealed that in February 2007 alone, there were no fewer than 700 points-related failures just on the line from Motherwell to Crewe. That is 700 near misses. Does that not demonstrate the need for a much wider, nationwide inquiry, and should not the Government now resolve not to deregulate Network Rail, which would further compromise rail safety?

[Mrs Villiers]

The Government are determined not to compromise rail safety. We are satisfied that very important lessons must be learned from Grayrigg and previous accidents. In taking forward reform of the railways to make them more efficient, maintaining the highest levels of safety will be a vital priority we intend to keep to.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

T1. If she will make a statement on her departmental responsibilities.

--- Later in debate ---

[Penny Mordaunt (Portsmouth North) (Con)]

T3. I hope that in the Secretary of State’s induction, she has been made aware of the unsuitable suburban rolling stock used on the main line Portsmouth to London service. Is she also aware that 1970s rolling stock has been reintroduced on the Portsmouth to Brighton line? Will she meet me to discuss how we can ensure that Portsmouth passengers get the services they deserve and the services they pay for?

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

My hon. Friend and I have debated this issue before. She knows that I am reluctant for Ministers to have more hands-on involvement with the distribution of rolling stock on different lines, but I understand her concerns. My colleagues and I are of course happy to try to broker a solution, and I am pleased to say that my right hon. Friend the Secretary of State is happy to meet my hon. Friend to discuss this further.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

T4. Are Ministers aware that there is growing concern about the potential sale of British Midland International to British Airways, which could have damaging consequences for Scottish businesses and travellers? I appreciate that under the Enterprise Act 2002 this is a matter for the Office of Fair Trading, but will Ministers keep an overview and, if appropriate, report to Parliament?

--- Later in debate ---

[Alun Michael (Cardiff South and Penarth) (Lab/Co-op)]

T5. Given the threat of ever higher train prices and the success of mutual solutions—for example, Glas Cymru—in reducing the burden on consumers, will the Secretary of State accept the Co-operative party’s People Rail proposals and put passengers in the driving seat?

[Mrs Villiers]

I am obviously always interested in ideas for improving our railways. The Government recognise the benefits of co-operative arrangements and mutualisation, and I am happy to meet the Co-operative party to discuss what it would like to do with the railways, and to see whether we can involve it in the reforms that we are taking forward.

[Gavin Barwell (Croydon Central) (Con)]

T7. As a south London MP, my right hon. Friend the Secretary of State will know what a success Croydon tramlink has been. The Mayor of London and Croydon council have recently worked together to buy additional trams to increase the frequency of the service. Will she work with the Mayor in the medium term to extend the benefits of the system to other parts of south London?

High-Speed Rail

Theresa Villiers Excerpts

Wednesday 2nd November 2011 Westminster Hall

[John Woodcock]

If the hon. Gentleman says so, that is fine. How he will get on with his colleagues after today I do not know, but whenever he puts forward sensible proposals, we will work constructively with him to further shared objectives, if he is willing to do so.

The hon. Gentleman made some important points about the northern hub, but Opposition Members believe that it is important to guard against letting the Government off and facilitating them by easing up on lobbying about delivering the project in parts and effectively leaving sections of the northern hub on the shelf.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

Will the hon. Gentleman give way?

[John Woodcock]

Of course. I welcome the Minister’s contribution.

[Mrs Villiers]

The Labour Government had 13 years to deliver the northern hub but they did not do any of it. We have already committed to delivering a major plank of it—the Ordsall curve.

--- Later in debate ---

[John Woodcock]

My hon. Friend is absolutely right. She knows that we took forward high-speed rail and the High Speed 2 project. We want the project completed by a future Labour Government.

[Mrs Villiers]

Does the hon. Gentleman recall that only a few years ago, in 2007, the then Labour Secretary of State for Transport, Ruth Kelly, produced a White Paper that ruled out high-speed rail for 30 years? It was the Conservatives who led the debate on high-speed rail.

[John Woodcock]

Let us see what the Minister says today about taking forward what are Labour’s proposals. I want to come on to why it is critical that she strengthen her commitment to the north of England.

--- Later in debate ---

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

Thank you, Ms Dorries. It is a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) on securing this debate. I am sorry for my coughing fit during his speech; I was moved to tears not by emotion but by the flu. We have had a good debate—well informed, constructive in tone and cross-party—and I thank all hon. Members for their contributions.

On the points raised, the opponents of High Speed 2, who are thin on the ground today, claim that better, faster transport between north and south will pull economic activity into London and suck it out of regional cities. That is defeatist and thoroughly misguided. As my hon. Friend the Member for Warrington South (David Mowat) pointed out in his usual incisive and informed manner, isolation is not the way to ensure that our northern cities thrive. I have every confidence that bringing north and south closer together by shrinking journey times will provide a major boost to growth in the north. That confidence is based on the evidence from our European neighbours, which has been discussed in some detail.

It is not only places served directly by HS2 that will benefit from the project; so will many other towns and cities as trains run off it on to the existing network. From Preston and Liverpool in the west to York and Newcastle in the east, journey times will be reduced and connectivity improved, and the economic boost will be felt across the north of England.

[Iain Stewart (Milton Keynes South) (Con)]

This debate has rightly focused on passenger traffic, but does my right hon. Friend agree that a spin-off benefit is that High Speed 2 will release capacity in the classic network for freight transport by rail, boosting all parts of the United Kingdom?

--- Later in debate ---

[Mrs Villiers]

I agree thoroughly. I will come to that in a moment.

The hon. Member for Blackley and Broughton (Graham Stringer) has been influential not just today but in the general debate on the issue. On the route up to Scotland, the Government are always open to working with the Scottish Government on such proposals. Why did we decide to start in the south rather than the north? As he will be aware, the rationale is that crowding is more serious on the southern leg of the west coast line, but we are anxious to press ahead as quickly as possible. I understand the frustration expressed by my hon. Friend the Member for Warrington South about the pace of delivery, but I emphasise, agreeing with the points made by the hon. Member for Blackley and Broughton, that in order to make progress on the project as quickly as possible, we need to retain cross-party consensus.

I welcome the assurances given by the Opposition in the Back-Bench debate on the Floor of the House, but Labour’s decision to propose a new route after the consultation closed was odd. It strikes me as last-minute, and looks suspiciously like game playing. However, I assure hon. Members that all route proposals submitted by the 50,000 people who took part in the consultation will be considered thoroughly.

[John Woodcock]

The Minister is being clear—well, specific—about the point “submitted to the consultation”. Is she saying that our suggestion is being considered or not?

[Mrs Villiers]

I am saying that all 50,000 responses from the people who took the time to submit them before the consultation deadline will be thoroughly considered.

We see phases 1 and 2 of the high-speed rail project to Manchester and Leeds as the starting point for delivering a genuinely national network, but we should not underestimate the benefits that Scotland will gain from the proposed Y network even before high-speed rail goes north of the border. Trains running off the high-speed line to Scotland will cut journey times to about three and a half hours, producing major economic and connectivity benefits for Scotland, tipping the balance in favour of rail rather than air and providing significant environmental benefits as people switch from planes to trains.

We are not pursuing HS2 just because of the positive economic benefits. The case for high-speed rail rests on the pressing need to prevent big problems that would otherwise be heading down the track towards us. The demand for inter-city transport capacity is growing strongly. If we sit back and fail to deal with the capacity time bomb set to explode within the next 10 to 20 years, we will do lasting damage to our economy. As the hon. Member for Manchester, Withington (Mr Leech) pithily put it, in the end, it comes down to capacity. If we do nothing, our key transport arteries will clog up, choking growth and destroying jobs in the north and elsewhere. It is neither viable nor responsible to sit back, do nothing and hope for the best, as other Governments have done in the face of similar problems. HS2 is not about shaving time off the journey between London and Birmingham; it is about delivering the transport capacity between our cities that is essential if our economy is to thrive in future.

However many times they are tweaked and repackaged, none of the alternatives proposed comes near to matching the benefits that HS2 can offer. None can release the capacity that is crucial, as my hon. Friend the Member for Milton Keynes South (Iain Stewart) pointed out, to the Government’s high-speed rail strategy. On the contrary, the options favoured by opponents of HS2 would apply major new pressures to timetables on our existing railways, fundamentally damaging reliability, as the hon. Members for Wirral South (Alison McGovern) and for Manchester, Withington pointed out. They would also involve immense disruption to the line during construction, as my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw) discussed.

Turning to the points made by my hon. Friend the Member for Blackpool North and Cleveleys, the Northern Way did effective work. Like him, I want local enterprise partnerships and local authorities to have more of a say in transport decisions. I agree that it can be beneficial for local authorities to come together to make joint decisions about travel to work areas, but we do not want such solutions to be imposed from above. They must be bottom-up and proposed by the areas concerned. Like him and the hon. Member for Blackley and Broughton, I have great admiration for the work done in Manchester to deliver an integrated authority that considers transport issues across the board for a major travel to work area.

I assure the House that investing in HS2 does not mean that we will stop investing in and improving our current transport networks. We recognise fully the importance of continuing to enhance our existing network, particularly by improving links between northern cities, not least because that is essential if we are to spread the benefits of HS2. Despite the deficit, we are undertaking the biggest programme of rail improvements since the Victorian era, many of which will benefit the north. Electrification will benefit Manchester, Liverpool, Wigan and Blackpool. The Ordsall chord project, which has received the go-ahead 30 years after it was first proposed, will benefit Liverpool, Manchester, Leeds, Newcastle and Hull. That is only phase 1 of the northern hub project. Our commitment to it demonstrates how seriously we view its importance and that we recognise the benefits that it can bring. We will assess it and consider carefully, when deciding what improvements can be delivered in the next rail control period, whether we can deliver the whole programme.

The intercity express programme will create new jobs in the north and a brand-new fleet of trains. New Pendolino carriages will be delivered on the west coast in the next few months. Manchester’s Metrolink extension is going ahead, and just a few days ago, Burnley and Accrington residents welcomed the fact that funding had finally been secured for the Todmorden curve. We are committed to continuing strong investment in the north of England to help its economy grow, complementing the benefits that will be brought by high-speed rail.

In conclusion, the HS2 consultation received more than 50,000 responses, every one of which will be used to inform the Government’s forthcoming decisions on high-speed rail. I welcome the valuable contributions made in this debate.

[Nadine Dorries (in the Chair)]

Will Members please leave the Chamber quickly and quietly?

Rail Franchising

Theresa Villiers Excerpts

Thursday 27th October 2011 Written Statements

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

In May this year, the then Secretary of State announced that the next intercity west coast franchise would start on 9 December 2012. It was further announced that the Department intended to enter into negotiations with the incumbent franchisee (West Coast Trains Ltd and Virgin Rail Group) to secure affordable and value-for-money operations until the start of the new franchise.

I am pleased to announce that the Department has now agreed an extension with West Coast Trains Ltd and Virgin Rail Group. This agreement will extend their current franchise on the intercity west coast route from 1 April 2012 until the start of the new franchise.

Over the course of the extension three new 600-seat Pendolino trains will be added to the line. This is in addition to the new Pendolino train which entered service in July of this year. Also, 31 of the existing Pendolino trains will be lengthened from nine to 11 carriages, increasing the number of standard class seats on each train by almost 50%, from 320 to 470. In all, 106 new carriages are being introduced on the route making 28,000 extra seats available each day, an increase of 25%. This will relieve crowding on some of the busiest parts of the west coast main line which is one the UK economy’s most important transport corridors.

Virgin will also be responsible for providing important services enabling people to travel by train to the Olympic and Paralympic games next summer.

Air Travel Organisers' Licensing Scheme Reform

Theresa Villiers Excerpts

Tuesday 25th October 2011 Written Statements

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I am today announcing a change to the planned implementation date for the proposed reforms to the air travel organisers’ licensing (ATOL) scheme.

The ATOL reform consultation, which took place between 23 June and 15 September 2011, proposed that the new regulations for bringing flight-plus holidays into ATOL would come into force on 1 January 2012.

Over 80 responses to the consultation were received. The final details of the ATOL reforms are being decided in light of these responses. However the overwhelming view from the travel industry has been that implementation on 1 January 2012 would provide insufficient time for businesses to make the necessary preparations to comply with the new requirements. This is partly due to the time needed to update IT systems and put in place the processes required to enable businesses to identify when a flight-plus holiday has been formed.

In recognition of these concerns, and to ensure that the new regulations are implemented fully, consistently and in a way that minimises the scope for error and subsequent confusion among passengers, I have decided that the new regulations will not now come into force on 1 January. Instead I intend to implement the reforms in April 2012 in order to give the industry enough time to respond to these new consumer protection requirements.

I expect to make a further announcement before the end of the year about decisions on the other ATOL reform issues in the consultation.

Concessionary Coach Travel

Theresa Villiers Excerpts

Friday 21st October 2011 Commons Chamber

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I thank the hon. Member for Dudley North (Ian Austin) for raising this issue in the House today and I congratulate him on securing this debate on concessionary coach travel, which is a very important issue. From 2003, the coach concession has entitled the over-60s and eligible disabled people to half-price travel on many long-distance coach services, but the coalition has made it clear that our priority has to be reducing the budget deficit we inherited from the Government of whom the hon. Gentleman was a member. In order to achieve this, several difficult decisions have had to be taken, including this one on concessionary coach travel.

The deficit crisis we inherited has inevitably meant that some funding streams have had to be ended. But the consequences of failing to deal with the deficit would be worse, including spiralling interest rates and the kind of crisis enveloping other European countries; more and more taxpayers money being spent servicing debt; and a massive legacy of debt left for future generations. Given the scale of the crisis we inherited from Labour, it simply was not possible to insulate concessionary travel completely from the measures needed to reduce the deficit. Funding for bus and coach travel had to take a share of the cuts that we have to make, and so the decision was taken in the spending review to end the coach concession scheme from October this year.

I recognise the concern this decision causes to those who valued the coach concession and I welcome this opportunity to respond to some of the points made by Age UK and Mencap. We are listening carefully to what they have said, and I am sure that the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), will be happy to meet them to discuss this matter further.

I want to emphasise that our decision does not in any way reflect our wider view of the importance of coach travel as a mode of transport. Coaches provide an important choice on many inter-urban routes, with services that offer good value for money in vehicles that increasingly offer a very high-quality and excellent environmental performance. However, taking a difficult decision to end the coach scheme has meant that we have been able to protect higher priority programmes, including the national bus concession. Even in these times of austerity, the coalition Government have been able to continue the national concessionary travel scheme for local buses, despite all the scare stories that were circulated by our opponents during the election. This support for the national bus concession scheme is contained in the coalition agreement, and it was reconfirmed by the Chancellor in the spending review.

The local bus concessionary scheme benefits about 11.5 million people every year, allowing free off-peak travel anywhere in England. In 2010-11, 1.6 million concessionary bus trips were made by pass holders in England—34% of total bus trips. This generous concession provides older and disabled people with greater freedom and independence and a lifeline to their community. It enables pensioners and eligible disabled people to have access to facilities within and outside their local area, and helps them to keep in touch with family and friends. That is why it has been a priority, despite the deficit, to protect this concession. However, a deficit reduction programme inevitably means making tough choices between competing priorities. The Government believe that keeping the local lifeline provided by free local bus travel had to be given priority over the coach concession scheme.

The hon. Gentleman complained about the lack of consultation. He will recognise that there was an urgent need to provide a credible deficit reduction plan at a very early stage of the coalition Government. If we had not done that, we would be facing the kind of crisis that has beset some of our European neighbours, who arguably have less serious deficits than we do. The only reason we have achieved the stability that we have in relation to the deficit crisis is that we have produced a credible plan. That required prompt work, which meant that it was not possible to carry out a consultation on this decision. However, an equalities impact screening assessment was carried out, and it was published on the Department for Transport’s website in November 2010. My ministerial colleague the hon. Member for Lewes recently wrote to the chairman of the Disabled Persons Transport Advisory Committee about the issue. When the funding for the scheme formally comes to an end on 1 November, a full regulatory impact assessment will be published and copies will be placed in the Libraries of both Houses.

As with all decisions in the spending review, we have sought ways to ease the process of implementation. This is one of the reasons the Government gave participating coach operators, and the public, 12 months’ notice of the scheme’s coming to an end. We recognised that a period of notice was very important to give operators sufficient time to plan for the removal of the grant and to give their customers reasonable notice of the changes to concessions that we had unfortunately had to make.

It is also important to note that coach operators are, of course, free to continue to offer concessionary travel to older and eligible disabled people on a commercial basis. Another advantage of allowing a period between the announcement that the Government scheme was coming to an end and this decision being implemented was to give coach operators the time to develop new concessionary travel products. Indeed, the Government were pleased to learn this week that, as the hon. Gentleman said, National Express will be offering a replacement concessionary coach scheme from 1 November this year. I understand that it will give those aged 60 and over and eligible disabled people a third off the price of coach travel in England when they buy a concession card.

Although the concessionary coach travel scheme had to go, I emphasise that the Government are still working hard to encourage more people to use buses. We fully appreciate how important they are for a range of groups in society. Bus services contribute to both of the Government’s key transport priorities: creating growth and cutting carbon. By providing an attractive alternative to the car, we can not only cut carbon, but unclog the congestion that can choke our local economies and hinder jobs and growth. Throughout our decisions in the spending review, we were determined that buses and public transport should continue to receive their fair share of funding, within the constraints of the deficit that we unfortunately inherited from the previous Government. A range of programmes aimed at making bus travel more attractive is under way. Again, that is despite the constraints on budgets.

The latest estimates show that in the last financial year, local and central government spent more than £2.5 billion on support for local bus services. That includes more than £1 billion on concessionary travel and £420 million in bus service operators grant. Reductions in that grant are to be implemented next year, but they are far less severe than many predicted and there is reason to believe that the bus industry will absorb them without a major impact on local fares. It is true that reductions in local authority budgets are having an impact on supported bus services in some areas, but by no means in all.

In addition to the formula grant that goes to local authorities to support bus services, the Government have paid almost £47 million to local transport authorities and bus operators to purchase 542 low-carbon buses across England. We are particularly keen to build the capacity of community transport organisations and have provided local transport authorities with £10 million of extra funding to support that sector. That money was found from savings made at the Department for Transport in the coalition’s first year in office. Lastly, we have established a £560 million local sustainable transport fund to support our transport goals of supporting growth and cutting carbon. Many of the successful bids to that fund are providing improvements to local bus services and facilities.

In conclusion, this Government have had to take difficult decisions to deal with the deficit that we inherited from Labour—a deficit as serious as anything that we have seen in this country’s peacetime history. Ending the concessionary coach travel scheme is one of the many melancholy consequences of the economic mismanagement of the previous Government, who borrowed heavily during the boom years and left us in a disastrously weak position when the lean years arrived. Although the coach scheme has gone, we have continued to protect free travel on local buses for older people and eligible disabled people, providing them with vital access to employment, health care and other essential local services.

Question put and agreed to.