Greater Anglia Rail Franchise

Theresa Villiers Excerpts

Thursday 20th October 2011 Written Statements

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

I can today announce that Abellio Greater Anglia Ltd has been awarded the Greater Anglia (Short) franchise.

The new franchise will begin operation on Sunday 5 February 2012. It will operate for 29 months (32 rail industry periods).

Bids were received from Abellio Greater Anglia Ltd (NV Nederlandse Spoorwegen), Eastern Railway Ltd (Go-Ahead Group Plc), and Stagecoach Anglia Trains Ltd (Stagecoach Group Plc).

Abellio Greater Anglia Ltd has been chosen to run trains on the network, which operates across Essex, Suffolk, Norfolk and Cambridgeshire. The franchise will also play a significant role in transport for the London 2012 games providing crucial services to the Olympic park area.

The terms of the contract the Government have agreed with the winning bidder will deliver a series of improvements for passengers during the 29-month franchise.

These include providing better station and ticket facilities and measures to improve passenger information. A text messaging service to keep passengers informed if service disruption occurs will be introduced. New information desks will be provided at major stations including London Liverpool street, Cambridge, Norwich, Ipswich and Stansted airport.

The new franchise will make it easier for passengers to buy tickets, including:

extending Oyster pay-as-you go between London Liverpool street and all stations to Shenfield, and stations to Hertford East;

improvements to ticket vending machines; and

introducing mobile phone and print-at-home ticketing facilities.

Abellio Greater Anglia Ltd has also committed to provide an additional 600 car park spaces (subject to planning approvals), more cycle storage facilities and deliver a number of other measures to improve the service to customers including deep cleaning of stations and trains.

The train company will take over station leases from Network Rail, taking on responsibility for all repairs and renewals at stations. This accords with the Government’s overall franchise reform programme which advocates transfer of more responsibility for stations to train operators as the passenger-facing side of the rail industry.

To date, only overall figures for the performance of the franchise as a whole have been published. From the start of the new franchise, Abellio Greater Anglia Ltd will start publishing a breakdown of punctuality figures by route giving passengers more transparency over the performance of the lines they use. The reliability requirements for the new franchise are also more demanding than the previous one.

When the franchise is renewed again in July 2014, the contract is expected to be 15 years in length. This forthcoming franchise will provide the opportunity to seek further improvements for passengers. We also intend to draw on the work of Sir Roy McNulty in setting the terms of the franchise with the aim of reducing costs and improving efficiency.

High Speed 2

Theresa Villiers Excerpts

Thursday 13th October 2011 Commons Chamber

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

I welcome the extensive support across the House for the Government’s proposals and in particular the clear expression of support from Her Majesty’s official Opposition. My time is too short to refer specifically to everyone, but I would like to make special mention of my hon. Friends the Members for Lichfield (Michael Fabricant) and for Kenilworth and Southam (Jeremy Wright), who are in their places. Their exacting scrutiny of the Government’s proposals has been effective and I welcome their robust input into the debate. I also mention my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke), who is also in his place and who strongly supports this scheme.

I first emphasise that the Government fully recognise the legitimate concerns of communities along the preferred route about the potential impact on their local environment. That has been raised by Members such as the hon. Member for Coventry North West (Mr Robinson). About half of the preferred route that we inherited has been changed. In the sensitive Chilterns area of outstanding natural beauty, all but two miles of the preferred route is in a tunnel or deep cutting, or follows an existing transport corridor. I am confident that we can and will make further improvements as a result of the consultation responses that are under consideration as we speak.

I am also conscious of the enormous importance of getting the right answer at Euston. We will, of course, scrutinise carefully all the representations made by the right hon. Member for Holborn and St Pancras (Frank Dobson).

[Dan Byles]

Will my right hon. Friend give way?

[Mrs Villiers]

I will not just yet, because my time is short.

HS1 is an example of how high-speed rail can be designed in a way that mitigates and minimises the impact on local communities. Equal care will be needed in phase 2 with the link to Heathrow. Again, we will be careful to listen to the concerns of the hon. Member for Hayes and Harlington (John McDonnell) and his constituents.

My hon. Friend the Member for South Northamptonshire (Andrea Leadsom) spoke about the predictions of passenger growth for HS2. The consultation document forecasts that passenger demand will roughly double for long-distance services on the west coast main line, as was said by my hon. Friend the Member for Pudsey (Stuart Andrew). That projection is over 30 years and is based on modest growth rates of about 2% a year. If anything, those numbers are cautious when one takes into account the fact that demand between London and Manchester rose by almost 60% over the four years to 2008 and that overall long-distance demand has grown every year since 1997 at an average of 5% a year. There is a wide-ranging consensus, which has been echoed by many Members today, that the southern end of the west coast route will be completely full within 10 to 15 years, or possibly sooner as was pointed out by my hon. Friend the Member for Wimbledon (Stephen Hammond).

[Christopher Pincher]

Will the Minister say why she persists in using version 4.1 of the “Passenger Demand Forecasting Handbook”, which Sir Rod Eddington says offers wildly inaccurate demand predictions? Why does she not use version 5.0, which is waiting on her desk for her to sign off? It offers much more reasonable demand projections and would allow her to pursue options other than HS2.

[Mrs Villiers]

We believe that version 4.1 gives a more robust analysis of passenger demand forecasts. I am confident that whichever methodology one uses to predict passenger demand, we face a capacity time bomb on the west coast main line. Even our efforts in undertaking the biggest programme of rail capacity improvement for 100 years will not be enough to meet our long-term capacity needs.

We desperately need additional inter-city transport capacity, as was pointed out by my hon. Friend the Member for Cambridge (Dr Huppert). No responsible Government can afford to sit back and ignore this problem. High-speed rail provides the best way to meet that pressing economic need. Contrary to the allegations of its detractors, HS2 is not and has never been a project designed to shave a few minutes off the journey time to Birmingham; it is about delivering the inter-city transport links that are crucial for the future success of our economy in this country, in both the north and the south.

[Dan Byles]

Will my right hon. Friend give way?

[Mrs Villiers]

No, I will not.

No upgrade of the existing railways is capable of matching the increase in capacity that HS2 will deliver. A fundamental problem with the alternative schemes is that they rely on upgrades of the existing line. By definition, they cannot release any capacity on the existing network. The release of capacity is a fundamental part of the benefit that can be provided by HS2. As my hon. Friend the Member for Pudsey pointed out, the alternatives are simply sticking-plaster solutions. Of the alternatives formally considered, only one had a positive benefit-to-cost ratio. The solution put forward by my hon. Friend the Member for South Northamptonshire of tinkering with first and second class is simply not credible; nor are the 51m proposals, which have not been adequately costed, do not take into account the massive cost of signalling remodelling and cannot deal with a peak-time crisis. Furthermore, trying to defuse the capacity time bomb with any kind of work on the existing line would involve extensive disruption, as was pointed out by the shadow Minister, and that would come not long after the people on this route had to put up with a decade of disruption for the last upgrade of the west coast line.

Concern has been expressed that our analysis does not take account of the fact that time on a train can be used productively. However, stress-testing our business case figures shows that factoring in productive time on trains actually slightly strengthens the case for high-speed rail. The additional capacity provided by HS2 would enable more people to get a seat and get some productive work done on a train. What is more, failing to deliver a new line would lead to ever more serious overcrowding problems, making it even more difficult to work on a train. The fact that Stop HS2 keeps making the point about work demonstrates the overall weakness of its argument.

[Dan Byles]

Will my right hon. Friend give way?

[Mrs Villiers]

No.

A fundamentally weak point put by the opponents of HS2 is the claim that it will disadvantage the regions that it will serve. That is startling when one thinks of the vigorous campaigns fought around the world by towns and cities desperate to connect to the high-speed rail networks that their countries are building. It is no surprise to hear of those campaigns when one takes on board the fact that Euralille has the third largest office complex in France, beaten into second place by Lyon’s Part-Dieu TGV station with its 5.3 million square feet of office space—economic development that would have been entirely impossible without the high-speed rail network in France. Survey work undertaken in relation to the TGV network clearly showed that the regions it served, rather than Paris, had experienced the greatest boost in their economies. It is simply not credible to claim that the north and the west midlands will be disadvantaged by high-speed rail, as evidenced by the strong support for the project in those areas.

If we need evidence of the startling benefits that transport links can bring, we have only to walk 30 yards from the Chamber to Westminster tube station and get on the Jubilee line extension. Now one of the biggest financial centres in the world, Canary Wharf simply would not exist without the Jubilee line extension. The benefits of high-speed rail will be felt right across the north and midlands, with a boost to the whole country’s economy.

I reiterate that our assumptions about the viability of HS2 and the expected fare box do not factor in or depend on a premium for high-speed services. Our appraisal is based on fares in line with the existing services. In response to a point made by my hon. Friend the Member for South Northamptonshire, the level of fares on Southeastern has absolutely nothing to do with HS1; neither do the performance issues on that route.

It is clear that in the longer term, the benefits of high-speed rail will exceed its construction costs, but the reality is that if we examine the scale of the project and average out the cost over the years it will take to deliver it, we see that it is by no means out of line with projects such as Crossrail. The claim that the rest of the rail network would be starved of funds if HS2 went ahead is undermined by the fact that the Government are committed to delivering the largest and most extensive package of rail capacity upgrades since the Victorian era, a number of which will carry on into the period during which HS2 is expected to be under construction.

Finally, I refer to the comments of my hon. Friend the Member for Wycombe (Steve Baker), who rather let the cat out of the bag. If arguments such as his had been accepted, we would never have built the channel tunnel, HS1, the Jubilee line extension or the motorway network. Not even the Victorian railways on which we still depend would have been built, because although they were built by the private sector, the people who built them lost their shirts and largely went out of business.

The Government’s two most important goals are to address the deficit and to secure economic growth. Improving our transport infrastructure has a central part to play in delivering those goals, and we believe that high-speed rail can and should have a central role in our transport plans for the future.

Informal EU Transport Council

Theresa Villiers Excerpts

Thursday 13th October 2011 Written Statements

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

The Polish presidency of the EU held its first meeting of EU Transport Ministers in Luxembourg on 6 October. The UK was represented by officials.

There was a policy debate on a draft regulation amending regulation 3821/85 on recording equipment in road transport and amending regulation 561/2006. The UK reiterated our support for measures that reduce burdens on business and expressed doubts that the costs and benefits of the Commission’s proposal had been fully assessed. The presidency noted that discussions were at an early stage and that consideration would continue at official level.

The mandate for enlarging the geographical scope of the existing Interbus agreement was not discussed at the Council.

The Council agreed two negotiating mandates in the area of aviation external relations:

The first was to negotiate a high-level agreement with the European Organisation for Safety of Air Navigation (EUROCONTROL).

The second was to open negotiations on a comprehensive air transport agreement with Azerbaijan.

The Council adopted conclusions on the Commission communication on “The EU and its neighbouring regions: A renewed approach to transport cooperation”. A number of member states intervened in support. The conclusions have taken on board the UK’s key concerns and are set broadly to maximise the opportunities for trade liberalisation, economic integration and regulatory convergence.

A lunch time discussion on trans-European transport network was held. The UK stressed the need for realism on the TENs budget in the current economic climate and emphasised that decisions on which projects should be developed and invested in on national networks should remain with the member states concerned. Legislative proposals for all trans-European networks (transport, energy and digital communication) are expected to be published on 19 October.

Among AOB items, discussions were held on the Emissions Trading System (ETS) for aviation. The presidency noted that the European Court of Justice had published an advocate-general’s opinion which concluded that the aviation ETS directive was compatible with EU law. The Commission provided oral information noting that the situation was getting highly political and would require a united EU approach to face off third countries’ opposition. The UK intervened to reiterate its commitment to the inclusion of aviation in the EU ETS and its support of the advocate-general’s opinion.

Parliamentary Written Question (Correction)

Theresa Villiers Excerpts

Monday 10th October 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 58263 on 20 June 2011, Official Report, column 20W, about rolling stock. The variable track access charges that were contained in the table were incorrect. The corrected table is reproduced below.

Oral Answers to Questions

Theresa Villiers Excerpts

Thursday 15th September 2011 Commons Chamber

[Fiona Mactaggart (Slough) (Lab)]

5. What assessment he has made of the importance of the voice of the passenger to decisions about rail investment; and if he will make a statement.

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

The Government recognise the importance of passenger opinion to their decisions about rail investment. The National Passenger Survey produces a network-wide assessment of passenger views on rail travel, which is used to inform the refranchising process alongside franchise-specific consultations. Other work by Passenger Focus, the independent advocate for rail users, also provides valuable input to decision making.

[Fiona Mactaggart]

When I meet Slough’s rail commuters next Tuesday, they will tell me that they are fed up about the £170 increase in their fares next year, and fed up that three of the 10 most overcrowded trains in the country serve Slough. We are to have no new carriages, the Minister is dithering about whether we will be able to use Oyster cards—which will help to relieve the position—and Crossrail, although welcome, will slow down Slough’s service. What has the Minister to say to the commuters whom I am meeting on Tuesday?

[Mrs Villiers]

I recommend that the hon. Lady say that this Government are fully committed to a major investment programme for our railways, much of which will benefit her constituents, including electrification, the intercity express programme, the provision of new rolling stock in the future, and improving the overall reliability of the line for her constituents, with the bottleneck at Reading station being dealt with. We are taking the concerns of the hon. Lady’s constituents very seriously. We recognise the anxiety about rail fares, but we are determined to get the costs of the railways down so that we can give better value for money to passengers and taxpayers.

[Andrea Leadsom (South Northamptonshire) (Con)]

Will my right hon. Friend update the House on the latest assessment of the High Speed 2 consultation that closed in July? Will she also reassure my constituents, all of whom are rail passengers, that every single one of their views will be taken into account?

[Mrs Villiers]

The Government take the process for designing the future of high-speed rail very seriously. All representations made to the consultation will be carefully considered and an announcement will be made later this year.

[Mr David Evennett (Bexleyheath and Crayford) (Con)]

6. What recent discussions he has had on reform of rail franchising.

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

The Secretary of State has held discussions that cover franchise reform in a number of meetings with rail passenger groups, local authorities, train operators. Network Rail and others.

[Mr Evennett]

I thank the Minister for her reply. Does she agree that as well as encouraging investment the Government’s franchising policy must be focused on efficiency, which in the long run will ensure that inflation-busting fare increases become a thing of the past?

[Mrs Villiers]

I completely agree with my hon. Friend. Our rail franchising reform has the dual purpose of promoting private sector investment and delivering better services to passengers and of reducing the cost of running the railways. As I said in answer to the previous question, that is part of the wider strategy of working with the rail industry to get costs down and provide better value for money for passengers.

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

Talking about leaving messes that other people have to clear up, the privatisation of the railways has been a mess ever since it was introduced. May we address the issue of the franchise for the east coast line, as the commute to and from London that it provides for my constituents is a disgrace? When they want to travel cross-Pennine, they have to use trains that should be in the York railway museum.

[Mrs Villiers]

I cannot agree with the hon. Gentleman’s assessment of the impact of privatisation. More people currently travel by rail than at any time since the 1920s, and reliability levels are high. I acknowledge that reliability on the east coast line should be better, however, and both East Coast and Network Rail are focused on that, as is my colleague, the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker). We do think that reliability needs to improve on the east coast line, but we also believe that, overall, privatisation of the railways has brought some tremendous benefits, including increasing passenger numbers.

[Mr John Leech (Manchester, Withington) (LD)]

Will the Minister ensure that any changes to rail franchise specifications will not necessarily involve the loss of ticket offices at local stations?

[Mrs Villiers]

The Government will carefully consider the McNulty review recommendations, including in the context of the specifications we put in place for rail franchises. Many of the decisions about ticket offices are addressed in what is known as the ticketing settlement agreement, and we will also consider that. We need to get the balance right by modernising the system so that it reflects the fact that the many new ways of buying tickets—such as the increasing use of smarter ticketing and internet purchasing—will in future change what we require from ticket offices, while also ensuring that people have the right channels through which to buy tickets.

--- Later in debate ---

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

12. What steps he is taking to ensure the economic sustainability of the rail network.

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

Despite the deficit, the Government are investing £18 billion in the railway, supporting projects such as Crossrail, Thameslink, electrification and extra carriages on crowded routes. We are also determined to get the cost of running the railways down, and we are putting together a reform package to deliver this which will draw on the report produced by Sir Roy McNulty.

[Nicky Morgan]

I thank the Minister for her reply. The Government have already announced improvements to the midland main line, which it is hoped will result in line speed improvements, but there is still a very strong business case for full electrification. What hope can she give me and many other MPs along the midland main line route that the Government will consider full electrification, particularly in the light of the HS2 route having being published so recently?

[Mrs Villiers]

I can say that, yes, we will be consider whether the midland main line can be electrified as part of the work in HS2 control period 5, but we will also have to consider competing projects such as the northern hub or the electrification of the trans-Pennine route.

[Rehman Chishti]

On train fares, may I ask the Minister for special consideration for commuters in Gillingham and Rainham and the south-east, which have had excessive RPI plus 3% increases since 2006? The Minister will know that commuters in the south-east have had excessive and unfair increases for that period.

[Mrs Villiers]

I well understand my hon. Friend’s concerns, and he has lobbied hard on this issue. The fares are contributing to investments that have been made on the Southeastern franchise in the past and fares now and in the future will contribute to the major investment programme that the Government are delivering, but in the longer term it is vital that we get the cost of the railways down to respond to passenger concerns about value for money.

[Bill Esterson (Sefton Central) (Lab)]

Elderly and disabled constituents of mine would like to access the rail network but are prevented from doing so by the poor station facilities. Merseytravel has had a budget cut of two thirds, which has caused delays to the installation of a lift at Formby station, to give one example. That lift is vital if elderly and disabled people are to be able to travel on the rail network at all. Will the Minister consider reversing that cut?

[Mrs Villiers]

I will certainly look into the specific case that the hon. Gentleman has mentioned and write to him about it. I emphasise that access for all funding is continuing under this Government and is part of a major programme of upgrades that we have committed to undertake, despite grappling with a deficit that is as serious as anything in our peacetime history.

[David Mowat (Warrington South) (Con)]

11. What plans he has to review the business case for (a) High Speed 2 and (b) Crossrail.

--- Later in debate ---

[Alison McGovern (Wirral South) (Lab)]

T2. Yesterday’s unemployment figures were disastrous for Wirral and the wider Merseyside economy. Given that RPI is now over 5%, will the Secretary of State explain how his RPI plus 3% train fare hikes will help work pay for ordinary people?

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

Merseyrail is on a different fares framework from the rest of the country—I think that it is on RPI. We all fully recognise the concern about rail fares. The decision on RPI plus 3% has been taken to enable us to deliver a massive programme of rail upgrades, which is essential if we are to deal with passenger concerns and promote vital economic growth.

[Claire Perry (Devizes) (Con)]

T4. Last night I drove down to my constituency and, unusually, the motorway was very clear. However, it is often the case that there are accidents on both the M3 and the M4 and it seems to take an unfeasibly long time to get the motorway reopened afterwards. Will the Department do something about that?

--- Later in debate ---

[Sheryll Murray (South East Cornwall) (Con)]

Would my right hon. Friend like to join me on one of the most beautiful and picturesque railway lines in the country, between Liskeard and Looe, to see for herself how our rural railways support coastal communities and the tourist industry?

[Mrs Villiers]

Yes, I would be delighted to.

[Natascha Engel (North East Derbyshire) (Lab)]

Integrated transport authorities have effectively re-regulated buses in the larger metropolitan county areas, which has squeezed private bus companies and made the bus wars in rural areas particularly fierce. That is great for those who live on lucrative bus routes, but services to smaller rural villages have become so bad as to be non-existent in some places. What is the Minister doing to help people out in those smaller rural areas?

Informal EU Transport Council

Theresa Villiers Excerpts

Thursday 15th September 2011 Written Statements

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

The Polish presidency of the EU held an informal meeting of EU Transport Ministers in Gdansk and Sopot on 5 and 6 September. The UK was represented by officials. The theme was: “Mobilizing private financing for transport infrastructure”. The debate was based on a number of questions put by the presidency, which were principally about the use of public-private partnerships.

The key points conveyed by the UK are as follows:

For the UK, the primary factor determining PPP use is whether it offers the best value for money compared to alternative delivery options. The features that impact on the value for money decision include: public sector access to private sector capital and expertise and the transfer of financial risk from the public to the private sector.

A key feature of the UK public sector comparator process is that it is not entirely based on a quantitative calculation of the respective delivery outcomes. The calculation is supported by a qualitative assessment of the respective delivery routes in terms of their viability, desirability and achievability.

The UK set out several examples of the use of PPP in the transport sector, which included contracts for street lighting, highway maintenance and London Underground. We reported that the experience of PPP in this sector has been mixed. While PPP programmes have helped secure significant infrastructure investment and, in a number of cases, achieved an improved record on the delivery of projects to time and budget, this has only been achieved by repeated interventions.

Work has recently been undertaken to achieve a stronger focus on flexibility. Project reviews are being undertaken to improve the delivery of cost reductions and value for money. New PPP projects are subject to tougher approval and assurance processes. The UK no longer uses the PPP format to source projects for which there is an insufficient capital requirement or continuing lifecycle maintenance/service obligation, or for lower value projects.

The UK emphasised that while PPP remains a useful procurement option, it is not suitable for every project and should only be selected when it can demonstrate that it provides a better value for money outcome than conventional procurement processes.

The UK noted that a fundamental feature of PPP structures is that they provide for availability payments over the life of a long-term service contract. However, EU regulations only provide for availability payments that are linked to development and construction pre-payments. If operational availability payments are not permitted, this could distort the decision-making process on the type of PPP structure that is adopted and unnecessarily constrain the options available to member states.

South East Airports Taskforce

Theresa Villiers Excerpts

Thursday 14th July 2011 Written Statements

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

On 15 June 2010, the Government announced the establishment of the South East Airports Taskforce with representatives from the aviation industry to explore the scope for measures to help make the most of existing airport infrastructure and improve conditions for all users. I chaired the taskforce. Its focus was on action at our three biggest airports—Heathrow, Gatwick and Stansted. Today I am announcing the publication of the taskforce’s final report.

The taskforce was given a challenging remit. It had 12 months to identify operational improvements that could enhance the performance of these airports and bring benefits to passengers. The report is the culmination of a year-long programme of work across seven areas, including punctuality, security and border controls. It sets out the issues considered by the taskforce and its conclusions.

I would draw particular attention to the chapter on improving punctuality, tackling delay and strengthening resilience. The focus of this chapter is on Heathrow, which is the UK’s biggest, busiest and most capacity constrained airport. The main recommendation is that the scope for establishing a set of operational freedoms at Heathrow should be explored. These would enable the greater use of tactical measures in defined and limited circumstances to prevent or mitigate disruption and to facilitate recovery. These measures are consistent with our commitment to runway alternation at the airport and there would be no increase in the number of flights at the airport which will remain capped at current levels.

Tactical measures, such as operating twin arrivals streams for limited periods to tackle inbound delays, are already used at Heathrow; implementation of these proposals would mean greater use of such measures on days when the airport faced particular disruption. The taskforce has concluded that such an approach would deliver benefits, particularly in improving reliability, but would also mean some limited redistribution of noise when measures were applied.

The work carried out so far indicates that the proposals could result in net environmental benefits,—for example, through reducing stacking and cutting the number of unscheduled flights during the night period. However, on the limited occasions where these freedoms would operate, some communities would be likely to experience aircraft noise during current respite periods; hence the need for safeguards to ensure they are deployed only to anticipate, prevent and mitigate disruption and to facilitate recovery.

Before any commitment is made to implementing such operational freedoms, better evidence is needed of the potential benefits and impacts. I am therefore announcing a phased trial of operational freedoms at Heathrow. The trial will provide firm evidence on the benefits and impacts of these measures and will provide a basis for consultation with local communities before a decision is taken on whether the proposed additional operational freedoms should be adopted on a permanent basis and what safeguards should apply in relation to their use.

The trial will be in two phases to enable evidence to be gathered for both winter and summer operations. Following engagement with local communities, the first phase will run from November 2011 to February 2012, followed by a four-month period of initial assessment and further engagement on how the regime might be refined to mitigate any impacts of particular concern and deliver additional benefits.

The second phase will run from July 2012 to September 2012, providing the added benefit of enabling greater resilience during the London Olympic and Paralympic games when the UK’s airports will be under more pressure than normal. The trial will be undertaken by BAA, the airport operator, under the supervision of the Civil Aviation Authority, the independent aviation regulator.

BAA will be required to engage fully and transparently with relevant local authorities, communities and other stakeholders throughout the process, particularly on the monitoring of noise impacts. Once assessed, the results of the trial will form the basis for a consultation with local communities which would in due course inform the Government in deciding whether an operational freedoms regime should be adopted at Heathrow.

I am grateful to the taskforce members not only for their constructive input into the taskforce over the past few months, but also for their continuing commitment to delivering real improvements for passengers. I intend to reconvene the taskforce in a year’s time to review the progress made.

Copies of the report document are available from the Department’s website at: www.dft.gov.uk.

High-speed Rail

Theresa Villiers Excerpts

Wednesday 13th July 2011 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Clwyd South (Susan Elan Jones)on securing a debate on this important issue, and I welcome the widespread support for the Government’s plans, expressed from both sides of the House by a clear majority of the hon. Members present. I hope that all colleagues who attended, including those who did not choose to stay to the end, will encourage all their constituents to take part in the consultation, which closes on 29 July, and make their support for the Government’s proposals clear.

In answer to the questions, there is no delay; the timetable that we are taking forward is the same as the one proposed by the previous Government. On the allegation of the shadow Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), repeated yet again, that we are not serious about going to the north of England, we supported a link to the north of England before Labour did. We supported a national network while Labour’s 30-year strategy for the railways ruled out high-speed rail at all. They are the people who are late to the party on high-speed rail, so the hon. Gentleman is in no position to criticise us. Nor is he in any position to criticise our approach to international connections. Labour had no connection to Heathrow in its plans, and nor did it put forward proposals to connect HS2 to HS1. Both those facts show that Labour was not serious about international connections. In response to questions on this point, and the points made by my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw), I repeat my support for taking high-speed rail to the north of England.

Questions were asked about a hybrid Bill and yes, the first hybrid Bill will cover the first phase, but we hope to go on in due course to an informal consultation next year on phase 2 to the north of England, with a hybrid Bill in due course in the next Parliament. I emphasise that the Government entirely recognise the concerns of communities about the preferred route and the potential impact on their local environment. We are listening to all those concerns. We have already made changes to about half the route that we inherited from our predecessors. As has already been mentioned, while our preferred route passes through the sensitive Chilterns area, all but 1.2 miles of it is in either a tunnel or a cutting, or alongside a main transport corridor—the A413 being a particular example. I am convinced that the result of the extensive process of consultation on the hybrid Bill will not be nearly as negative for communities as they fear. I am confident that with careful mitigation we can address the most serious local impacts, as happened so successfully with HS1. Intense controversy surrounded that first stretch of high-speed rail for the UK. Because of the hard work that went into getting the right route and the right mitigation, HS1 has not had the disruptive impact that communities feared it would. We can do the same with the route for HS2.

On what my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) said about HS1 somehow pushing up fares on the conventional service, the fares decisions taken by the previous Government were related to capacity enhancements and improvements on the conventional existing line, and not to HS1. The hon. Members for Clwyd South and for Ynys Môn (Albert Owen) made points about Euston, and of course there is more work to be done in relation to Euston—and the rest of the route. That is why HS2 Ltd is working with Camden residents, and why it is entirely legitimate for Members of the House to make representations about the Government’s preferred route.

As to points that were made about the Secretary of State for Wales, we are, as I have said, undertaking an extensive consultation on a preferred route for high-speed rail. No decision has been taken about the right route. All we have is a preferred option. It is entirely appropriate for MPs, including members of the Government, to take part in a debate about what final route should be chosen and make representations on behalf of their constituents.

[Andrea Leadsom]

Will the Minister give way?

[Mrs Villiers]

No.

Several points were made—

[Albert Owen]

Will the Minister give way?

[Mrs Villiers]

I am afraid I really do not have time. We have had a good debate.

[Albert Owen]

On the Welsh Office.

[Mrs Villiers]

I am sorry; I have many points to respond to, and only about another seven minutes—[Hon. Members: “Four minutes.”]—four minutes.

There was strong support from my hon. Friends the Members for Weaver Vale (Graham Evans), for Warrington South (David Mowat), and for Pudsey (Stuart Andrew). I also note the support of my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke). A fundamental reason for our need for high-speed rail is to deliver the capacity we need to meet the growing demand for inter-city travel. Despite significant capacity upgrades in recent years, with more to come on the west coast, Network Rail predicts that the line will be pretty much full by 2024. That saturation point could come earlier. If we fail to provide the capacity we need, we will significantly hinder economic growth and worsen the north-south divide. No Government can afford to sit back and ignore that. High-speed rail can provide the capacity we need, as well as shrinking journey times between our major population centres, spreading prosperity and creating jobs, without a net increase in carbon emissions. As the hon. Member for Cambridge (Dr Huppert) said, that is just the sort of sustainable growth we need.

High-speed rail will reshape our economic geography and start to tackle and reduce the economic divide between north and south, as my hon. Friends the Members for Lancaster and Fleetwood and for Pudsey pointed out. The full Y-shaped network is expected to generate about £44 billion for the economy. We are convinced that high-speed rail will do a tremendous amount to integrate the economies of Manchester, Sheffield and Leeds, and to spread prosperity well beyond the cities that are directly served by the line, including destinations in north Wales. As the hon. Member for Clwyd South pointed out, examples such as Lille show that those regeneration benefits are felt well beyond the cities that are directly served by the stations. We believe that the country should aspire for the future to a genuinely national network, which we hope, of course, will include Wales and Scotland. However, long before that point, passengers in Scotland are expected to benefit significantly from shorter journey times resulting from the Y-shaped network, with journeys of 3.5 hours from Glasgow and Edinburgh to London providing an attractive alternative to flights, as highlighted by the hon. Member for Rutherglen and Hamilton West (Tom Greatrex).

North Wales is also likely to benefit as a result of the project we are considering today, because of a GDP boost resulting from taking high-speed rail to Birmingham and then on to the north-west, with benefits in inward investment and tourism. We are determined to do as much as we can to respond to the points that have been made today about the importance of ensuring good connections from the conventional network into new HS2 services. That is one way in which we will succeed in spreading the benefits as widely as possible. Such good connections should enable north Wales passengers to benefit from faster journey times. HS2 would also release capacity on the existing network, benefiting north Wales and destinations in the west and east midlands and the north of England, including Northampton—

[Mr James Gray (in the Chair)]

Order. I apologise for interrupting the Minister. I congratulate hon. Members on the fact that 14 of them have been able to speak in the debate, which is a pretty reasonable number.

Crossrail

Theresa Villiers Excerpts

Wednesday 13th July 2011 Written Statements

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

Crossrail will support economic growth for London and the UK. As part of the comprehensive spending review in October 2010, the coalition Government confirmed their commitment to the full Crossrail scheme. A re-phased programme of delivery means that Crossrail services will commence from 2018. We expect Crossrail to cost no more than £14.5 billion. Forecasts continue to suggest that Crossrail will be delivered within its existing funding.

Crossrail has made significant progress since the last annual update to Parliament. Crossrail Ltd has now let all of its key tunnelling contracts, and enabling works are continuing at a number of sites across central London. Construction is well advanced at Canary Wharf Crossrail station, and tunnel boring machines are expected to be launched in spring 2012. In April 2011, Crossrail passed through the final project review point, at which point the Department and TfL delegated full contractual authority to Crossrail Ltd to deliver the scheme. The new chief executive of Crossrail Ltd, Andrew Wolstenholme, was appointed in May 2011.

During the passage of the Crossrail Act through Parliament, a commitment was given that a statement would be published at least every 12 months until the completion of the construction of Crossrail, setting out information about the project’s funding and finances.

In line with this commitment, this statement comes within 12 months of my last one which was published on 15 July 2010. The relevant information is as follows:

Train-building Industry

Theresa Villiers Excerpts

Tuesday 12th July 2011 Westminster Hall

[Margaret Beckett]

I agree in part with the hon. Lady. I take her point entirely that we are really interested in the future, but let us not overlook the fact that we have barely started. The procurement process has not concluded. All that has happened is that a preferred bidder has been identified and negotiations have been opened. The hon. Member for Amber Valley referred to the intercity express programme contract. In the hands of the Department for Transport, that went to Hitachi, but the contract for that has not yet been signed. Indeed, just before the election the previous Government ordered a review of that contract, and this Government have substantially renegotiated it. We are very far from the conclusion of this bidding process, so although I share the hon. Lady’s view entirely that we should look to the future—I will come to that issue in a second—to secure that future we must not abandon the prospect of changing the present circumstances and the award of this contract.

One concern about the attitude that the company is likely to take relates precisely to the issue of opportunities for the future. If this procurement goes ahead, we may lose the opportunity of an offer made by Bombardier. As I understand it, it has decided at the highest level to establish a worldwide centre of excellence for the design and manufacture of new cars for high-speed trains, for future procurement—of exactly the kind referred to in the debate. Bombardier was prepared to site that worldwide centre of excellence in Derby. That offer was, in effect, thrown back in its face. That concerns me greatly. We would be talking about more jobs—jobs with even higher skills levels than we see now, and with the potential for new technologies. Although I and many in my party applaud what the Cabinet and the Prime Minister said in my Derby constituency about manufacturing, skills and the need to rebalance our economy, the skills base in our city is not just Bombardier; it is also Rolls-Royce. We are a strong manufacturing base, but that base depends on the interaction between those two companies, among others, on the supply chain, and on their ability to work together to establish and maintain that skills base.

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

Does the right hon. Lady acknowledge that the Government of which she was a member set the criteria for the procurement, and that there is no way for this Government simply to ignore the Siemens bid and give the contract to Bombardier? We are bound by the criteria and by European Union rules and we cannot simply rip up the process. Is she advocating that we stop the procurement altogether and start afresh? That would delay considerably the Thameslink programme—which we inherited from the previous Government already running 16 years late—and we would still have no guarantee of Bombardier being the winner at the end of the new procurement process.

[Margaret Beckett]

I am sorry that the Minister decided that this was a good time to make that party political point, when all of us are present to get her and her Department to change their minds and look afresh at all the implications. We all know from our constituents that there are very real questions about whether the right decision has been made and whether proper account has been taken. We have talked about the financing so far, but we have also touched on whether the vehicle is fit for purpose and whether Siemens—although it is a fine company with a great engineering tradition—has the capacity to supply the trains needed.

I am genuinely quite sad that the Minister made that point. As the storm has arisen, not only in the Derby area but in the north-west and elsewhere, we have been inundated with requests from people throughout the country, with other Members and members of the public asking, “What can we do to help? This is a mad decision and none of us agrees with it.” However, for some days I have had the feeling that, to get the Government off the hook on which they so far seem determined to impale themselves, some have been saying, in effect—I am prepared to exempt the Minister—“If we can palm off the blame for this on to the previous Government, then we don’t need to look again at the decision.” I am sorry, but that will not wash this time, because of genuine concern about how the financing was handled, about the train, about the lost opportunity for new manufacturing in the UK and about the knock-on effect on Rolls-Royce. This is not a done deal.

The hon. Member for South Derbyshire (Heather Wheeler) referred to the chair of Bombardier in the UK going to South Africa with the Prime Minister to promote British exports. I would not blame him for viewing the journey with some irony. In South Africa, they will be travelling on new trains, made by Bombardier for South African Railways, which felt able to award that contract. We can all ask why Bombardier could win that contract, but not one in this country.

We are very much at the opening stage in the process of negotiating the contract. The Government have only recently taken delivery of the McNulty report, which also considers the supply chain; we have hardly touched on that yet this morning, but the implications throughout the country are enormous. Genuinely, I say to the Government that this decision is a mistake. I do not accept the simple case that they have put because, as I pointed out, there were opportunities for the Department to look at the financing, but let me take a step back from that. They can blame it on us if they like, but they must change the decision—that is what matters.

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Mr Gale. I congratulate my hon. Friend the Member for Amber Valley (Nigel Mills) on securing a debate on this important issue. I welcome the contributions that he and other right hon. and hon. Members have made on this issue, which is important for Derby and the UK. I emphasise that the Government fully understand the concern that is felt. We, too, deeply regret the job losses that are under way in Derby, and we, too, are determined to do what we can to help Derby and Bombardier.

We recognise that Bombardier was hugely disappointed not be made the preferred bidder for Thameslink, but the procurement was set up and designed by the previous Government. Although we were left to open the envelope on preferred-bidder status, they set the criteria against which bids had to be judged. We are legally bound by the criteria set by Labour at the beginning of the process.

We are also legally bound by European law to judge bids on a completely blind basis. Under EU law, domestic and overseas suppliers must be judged impartially and on a wholly equal footing. Against the published criteria we inherited, the Siemens bid clearly represented better value for money.

We cannot make the location for the proposed manufacturing part of the criteria. Contrary to what the shadow Secretary of State, the hon. Member for Garston and Halewood (Maria Eagle), said, it was not a criterion for preferred-bidder status in the IEP contract that Hitachi set up a factory at Newton Aycliffe, although it has chosen to do so.

In response to a number of points made by different hon. Members, I should say that we could not simply rip up the procurement started by our predecessors. That would leave the Government at risk of facing damages in the courts and lengthen the delivery of Thameslink, which, as I have said, and as hon. Members have acknowledged, was already running 16 years late when we inherited it from the previous Government. There was no legal way we could simply ignore the Siemens bid and hand the contract to Bombardier; it simply is not in our legal power to do that.

[Maria Eagle]

Is the Minister really saying she has no power in this matter? She is the Minister.

[Mrs Villiers]

I am saying that, as the Minister, I need to abide by the law and by our obligations under the European Communities Act 1972 and the treaty of Rome; I am afraid I have no choice in that. Going forward, we of course recognise the need to examine wider issues about whether the UK approaches the application of EU procurement rules in the right way and achieves the right balance of risk. Similarly, I agree with my hon. Friend the Member for Amber Valley that we need to see whether our approach is consistent with those used in other member states. That is why the issue will be considered as part of the Government’s growth review.

[Nigel Mills]

On that point, I would like to draw my right hon. Friend’s attention to another quote from Mr Scrimshaw, who is the head of Siemens’s train building in the UK. Rail Professional asked whether he would ever look at building in the UK, and he replied:

“I wouldn’t rule it out. Currently, all the tenders from DfT don’t include requirements for UK manufacture. We have a model that works quite well.”

It seems that Siemens did not entirely rule out the possibility that such a requirement might exist. Perhaps the Department could look at that in future.

[Mrs Villiers]

Even if we had designed the criteria, it remains the case that we could not have made the location of the manufacturing process a condition of successfully achieving the contract; that is simply not permitted by EU law. However, I totally deny the allegation that the Government are sitting back and not taking action. I agree that we need to take action to help Derby and Bombardier. The reality is that Bombardier advised the Department for Transport that it expected to make more than 1,000 redundancies, regardless of the outcome of the Thameslink procurement, because several of its orders are about to reach completion. However, whatever the reason for the redundancies, we want to try to help Derby and the surrounding area at this difficult time.

As a result of the review by Bombardier of its UK rail operations, the Business Secretary has set up an economic response taskforce. It will he headed by Margaret Gildea and its remit will be to mitigate the economic impact of job losses at Bombardier, in its supply chain and in local communities. It will draw on representatives from Derby city council, the county council, Derby college and the Skills Funding Agency. Jobcentre Plus will also deploy its rapid response service, to support workers who will be affected. That is in addition to the work on skills that the Government have been involved with in Derby in partnership with Rolls-Royce and Bombardier, and the support that the Department for Transport is giving to the National Skills Academy for Railway Engineering, which my hon. Friend the Member for South Derbyshire (Heather Wheeler) mentioned. We shall do our best to help Bombardier to get the overseas contracts it is bidding for, such as in South Africa. That is one reason why representatives from Bombardier will accompany the Prime Minister on his visit to South Africa, which is coming up.

[Margaret Beckett]

I should not be a bit surprised if those representatives make the point that it will not help them to gain confidence overseas if they cannot get contracts at home.

I want to raise a point that has been made in several quarters, about the job losses. I, too, have seen the letter from Bombardier to the Secretary of State. It makes two things clear, one of which is that, indeed, as no one has attempted to deny, there were temporary, short-term contract jobs that were due to come to an end, which is a pity. However, it is also clear that more than 400 skilled engineers and designers are being made redundant now because of the loss of the Thameslink contract. Also, I know that the Department has been aware for some time, as I hope Ministers have, that Bombardier has made it crystal clear that if it did not get the Thameslink contract, not only would the new jobs not be coming, but those 400-odd would be the start of the process. It is not right for the Minister to pretend that all those jobs were going to go anyway. That is just not true.

[Mrs Villiers]

As I have said, whatever the reason for the job losses, it is important that we should work together to help Derby in this difficult time.

[Chris Williamson]

Will the Minister give way?

[Mrs Villiers]

No. I am afraid I have only a few more minutes, and a long list of points to get through. I want to try to respond to my hon. Friend the Member for Amber Valley.

My hon. Friend was concerned that in some way the Department for Transport discriminated against Bombardier. Absolutely not. We fully respect the excellence of the engineering facilities at Bombardier. We are determined that it should be judged on an impartial basis, so there is no question of any predisposition against Bombardier, or any discrimination.

Several hon. Members have expressed concern about the combination of long-term funding and maintenance and whether we should take the approach to procurement in the future of judging each procurement on its merits. It was not possible to sever those elements of the bid process from the criteria we inherited from the previous Government. They combined long-term maintenance and funding, and it would not have been possible for us to sever those criteria and start again, for the reasons I have given.

My hon. Friend the Member for Amber Valley thought that there was a case for leaving more procurement decisions to the train operators and the rail industry. I agree on that. He also asked about the margin between Siemens and Bombardier. I am afraid that that is commercially confidential at the moment and I cannot share it with the House. It would not be in the interest of Bombardier, Siemens or the taxpayer for me to do that. Several hon. Members, including my hon. Friend and the shadow Secretary of State, have expressed concern about the Siemens bogie. That has been evaluated. The bogie is based on proven technology used elsewhere. Its development began in 2007 and it is expected to have undergone about 1 million miles of testing before it goes into passenger service. As to concerns about peaks and troughs in rolling stock orders, yes, we need to consider that in future, and we shall do so as part of our consideration of the McNulty review.

My hon. Friend the Member for Mid Derbyshire (Pauline Latham) spoke passionately and movingly about the impact of job losses. She asked about a meeting with the Prime Minister, and he has asked the Business Secretary to meet Councillor Philip Hickson of Derby city council. In answer to the question of the hon. Member for Derby North (Chris Williamson) about assessment of the position in Germany and France, we looked carefully at their approaches, and will also do so as part of our growth review. As to whether we will publish the results of the value for money assessment of the Siemens bid, it is not possible at this point, as I have said, to publish such commercial details, because they are commercially sensitive. The hon. Gentleman asked what legal advice the Department obtained on changing the invitation to tender. As I have made clear, we are legally bound by the criteria we inherited from the previous Government, and those were thoroughly assessed by our legal advisers.

[Chris Williamson]

Will the Minister give way?

[Mrs Villiers]

No, I am sorry. I have a lot of points to make, and I propose to make them.

My hon. Friend the Member for Solihull (Lorely Burt) rightly emphasised the benefits of open markets and highlighted the dangers that going down a protectionist route might have. The hon. Member for Birmingham, Erdington (Jack Dromey) talked about how the Government could use their £100 billion public procurement programme to underpin economic recovery. Of course we will consider that as part of our growth review. My hon. Friend the Member for Crewe and Nantwich (Mr Timpson) was concerned about the amount spent on consultancy. The bulk of that happened under the previous Government, but I agree that we need a more efficient approach to spending on consultancy in relation to procurement in the future. Since the general election the consultancy spend has been considerably reduced.

It is important to recognise that Bombardier, alongside other train manufacturers and train and component supply chain businesses in the UK, will have the opportunity to bid for a range of contracts in the future. We are reforming the franchise system to incentivise train operators to invest in new rolling stock. We have given the go-ahead for the tube upgrades. We have secured funding for Crossrail. We are going ahead with a consultation on high-speed rail. Bombardier is a highly successful global company, with a proven record of winning big contracts for its Derby works and elsewhere. It has done so in the past; we see no reason why it should not be well placed to do so again in the future. In recent years it secured orders for nearly 1,400 carriages for London Underground’s sub-surface line, 376 for the Victoria line and 232 for London Overground. It has been shortlisted for the Crossrail order. Its striking success rate on tube-related contracts must put it in a strong position for when London Underground next needs to procure new carriages, which, thanks to the securing of funding for the tube upgrade, will happen in due course. Only a few weeks ago, Bombardier won a £354 million signalling contract for London Underground.

For all those contracts we are determined to ensure that domestic suppliers are treated entirely impartially and given a fair chance of getting them. The fact that the coalition Government have secured funding for such a major programme of capacity enhancement will result in major opportunities, not just for Bombardier but for other train component and supply chain manufacturing businesses in this country. Following its nomination, for example, as the preferred bidder for the intercity express programme contract, Hitachi has announced that it is locating its train manufacturing services for Europe at Newton Aycliffe in County Durham. That will provide significant opportunities for UK component manufacturing. As has been said, if the Siemens Thameslink bid proceeds to conclusion, it will involve the creation of 2,000 jobs in the UK. It has indicated that it intends to use elements of the UK supply chain to supply its bid.

This has been a difficult debate, and it is a difficult time for Derby. We are determined to help.

[Chris Williamson]

Will the Minister at least give an undertaking to take legal advice on the possibility of calling in the decision and reviewing it, with the possibility of reversing it, as has happened with previous contracts?

[Mrs Villiers]

We have looked extensively at the contract and have done the numbers very carefully. As I have said, it is not legally possible for us to rip it up. We need to ensure that in future, Bombardier and all our domestic suppliers will be well placed to compete effectively for bids and competitions that will be made possible by the coalition’s commitment to investing in our railways.