Local Bus Services

Tom Harris Excerpts

Wednesday 5th November 2014 Commons Chamber

[Mary Creagh]

I think that comment dates from another time. I agree that the sort of prejudice against public transport in that comment is deeply unhelpful. I think that a man or woman who finds themselves on a bus at the age of 46, as I did this morning, has achieved a great deal in life. I want buses to be seen as an aspirational form of public transport, not something that people take only if they cannot afford something better.

[Mr Tom Harris (Glasgow South) (Lab)]

Very briefly, for clarity and in defence of Baroness Thatcher—[Interruption]—that is a quote that will haunt me for some time—she never actually said those words, which have been attributed to her. It was actually Loelia, Duchess of Westminster.

[Mary Creagh]

I aspire to a country in which even the Duchess of Westminster travels on the Clapham omnibus—or even the Westminster omnibus.

We know that the rise in bus fares has disproportionately affected the frail and the vulnerable, as well as young jobseekers and those on low incomes without access to a car. We know, too, that in some rural areas, bus services have all but disappeared—the result of this Government’s deep cuts to supported services, which my hon. Friend the Member for Coventry South (Mr Cunningham) mentioned. Freedom of information requests by my right hon. Friend the Member for Leeds Central (Hilary Benn) uncovered the fact that local authority bus subsidies across shire counties were cut by 23% in real terms between 2010 and 2014. Conservative Northamptonshire county council cut its subsidy by 55%, and Conservative-run Suffolk by 50%.

In cities outside London, there is a chaotic mix of local control over trams and metros, private provision of buses and nationally operated rail franchises—no integrated ticketing, no real-time information and no fares information at the bus stop. The bus companies say, “Ask the driver”, but can we imagine going to Tesco for a loaf of bread and being told that we have to take it to the checkout to find out the price? There is often no usable map of the bus networks and their connections. Instead, different bus companies compete for fares.

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[Mr McLoughlin]

The simple fact is that, if my memory is correct, it is legislation enacted in 2000 that allowed quality contracts to come in, yet none was introduced during that time. [Interruption.] I am saying no, but I will check the exact date.

I should point out that it is this Government who are making the difference—even Labour in the north know it now—and I am proud of our record on buses. So perhaps today, I can put straight a few of the facts; indeed, we might end up even agreeing. Let me spell them out. The motion today says that buses matter to the economy. Of course they do, which is why we have been investing heavily in them. The motion also says that bus use outside London is falling. I have some good news for the House and the hon. Member for Wakefield: actually, it is not falling at all; it is going up, reversing the trend we inherited from the last Government. In the last year alone, there have been 4.7 billion bus journeys in England, the highest number since records began. There is growth outside London as well—up 1.5% on last year. Buses in England are busier. In 2013-14, 16.1 billion passenger miles were travelled on buses in England, up from 15.2 billion in 2009-10—an increase of 900 million journey miles.

[Mr Tom Harris]

But if the Secretary of State excludes all London bus journeys from those figures, historically—from the point of deregulation in 1986 to the present day—bus passenger numbers outside London have plummeted.

[Mr McLoughlin]

No. As I have just pointed out, the trend has been reversed—[Interruption]—in the last year for which figures were available, and not just inside London but outside it too.

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[Mr Tom Harris (Glasgow South) (Lab)]

Earlier this evening, my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) offered us a quotation which she wrongly, but understandably, attributed to the late Baroness Thatcher, about the man who, finding himself on a bus beyond the age of 26, can count himself a failure. As I pointed out at the time, it was actually said by—we think—Loelia, Duchess of Westminster, but it is, as I say, understandable that it has been attributed to Mrs Thatcher over the years. I have made the same mistake myself in the past. I have a long-standing interest in transport issues, and that was one of the quotations that I gave to illustrate the dastardly Conservative attitude to public transport users.

The fact is that there is a class element in this debate, and we should recognise that. When I was a Transport Minister, it was often said, although never minuted, that suits did not use buses. That was meant to remind me how important it was for us to persevere with the Government’s programme of encouraging the growth of tram services in parts of the country. Trams were seen as a halfway house between a train and a bus. Wealthy professional people would use a tram, but would not use a bus. The problem is that over the years, especially since deregulation in 1986, bus services have become the poor relation of public transport. According to the latest Government figures, 60% of public transport journeys are made on a bus, but I suspect the figure is much higher; it certainly has been in the past. The trains and the railways get far more press coverage than the buses, however, and trains get far more attention in this House, too, and the trains receive far more public subsidy than the buses ever have, and rightly so—we all understand the reasons why.

Importantly for this debate, buses are the poor relations once again when it comes to regulation. The disparity between bus services and railway services is no more explicitly clear than in successive Governments’ approaches to regulation, and I include the last Labour Government in that, in which I served. Trains are, of course, necessarily heavily regulated, but there is not so much regulation for buses. The Confederation of Passenger Transport said last week that it opposed Labour’s plans

“for the further regulation of bus services.”

I question that word “further”, because buses are completely unregulated. There is no regulation in the bus industry. The only requirement for any Member of this House who might want to run a bus service is to be able to afford to buy a bus, and it must be roadworthy. After that, they can run a bus service along any route they wish.

[Mr Spencer]

A number of cities have gone down the route of having trams, such as Edinburgh, Nottingham and Sheffield, but they are very expensive. Does the hon. Gentleman agree that that money would have been better spent on supporting local bus services, which, of course, can vary or change their route rather than have to follow tram tracks?

[Mr Harris]

I agree with the hon. Gentleman. The tram in Edinburgh was a disaster from start to finish. I was in Edinburgh over the Edinburgh festival period, and I saw for myself the much-heralded trams and was extremely excited that there was a passenger on one of them; that encouraged me. I do not think trams are the solution, therefore, but bus services are absolutely vital, because buses are the transport mode of choice of most people. They are flexible and relatively cheap compared with the infrastructure we have to invest in for trams and trains.

Outside the capital, there is no regulation of the bus services at all, however. The bus industry has done a good job. I do not want my party to jump on the bandwagon of attacking the whole bus industry because it is entirely private. It is entirely private, and it should remain entirely private. Nobody on this side of the House is saying we should return to the ridiculous old days when local authorities owned bus companies. We do not want to go down that road.

What we are saying is that, because it is such an important mode of transport, it should be regulated. There is nothing wrong with that. The private industry has done some very good work on fares and smartcard ticketing, although I have to say I think the Secretary of State was just a little ungenerous in his comments about the progress that the last Labour Government made on smart-ticketing and on accessibility of vehicles.

Since the railways were privatised in 1995, the number of passengers using the railways, during what was a period of economic growth, has gone up to a remarkable extent—I cannot remember the precise figure, but the rise in that time is between 40% and 50%. It has been a real success story, at least in terms of the number of people using the trains.

Why has that not happened for the bus services? The hon. Member for Cheltenham (Martin Horwood) and the Secretary of State were incredibly complacent in saying, “Ah, well, in the last year there was a 1% increase in passenger numbers.” What is the number of people using the buses today compared with 1985? That is the figure we should be looking at. With a 1% increase a year, how many years will it take to get back to the level we were at in 1985? That is what we have to explain to our constituents.

Why have passenger numbers on the buses not been increasing at the huge rate the trains have been enjoying? After all, bus services are flexible. If a bus company wants to increase capacity, it buys a bus, whereas doing the equivalent in the train industry is massively complicated with massive lead-in periods. The bus industry is far more flexible, so why has it not taken advantage of economic growth to increase the number of passengers, as the train industry has done? The simple answer is because it is not run well and because it is not regulated outside the capital. The passenger increases that have happened since 1986 have happened exclusively in the capital, where deregulation did not take place.

[Martin Horwood]

I have a lot of sympathy with what the hon. Gentleman is saying, but I do not think those of us who were pointing to the increased numbers overall were being complacent. I quoted statistics from the south-west and Gloucestershire which suggested that things are at least heading in the right direction. However, the hon. Gentleman is right that we should all be more ambitious for bus travel.

[Mr Harris]

I wonder whether those figures would be moving in the right direction were it not for the introduction of free bus travel for pensioners. Take those figures out and where are we with passenger numbers? I suspect that even last year’s 1% increase would be non-existent.

I want to say one last thing. This is not a debate about Scotland, but I stand here envious of my English colleagues. We have the prospect of a Labour Government next May, and of regulated bus services throughout England. If only that were the case in Scotland. Successive Scottish Executives, led by the Labour party and now by the Scottish National party, have refused to re-regulate the buses. In Scotland, for some reason, SNP Ministers do not want to introduce regulation. I cannot imagine why. What is it about the anti-regulation arguments of multi-million SNP donor Brian Souter that Scottish Ministers find so persuasive? I hope the example the next Labour Government will produce will cause Ministers in Scotland of whatever political colour to change their minds.

Rolling Stock (North of England)

Tom Harris Excerpts

Wednesday 12th March 2014 Westminster Hall

[Mr Tom Harris (Glasgow South) (Lab)]

I hope that colleagues will forgive this cuckoo in the nest—a Scottish MP intruding on the debate. I pay tribute to my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) for securing the debate. Continuing my animal analogy, I want to address the elephant in the sitting room. Hon. Members, who are rightly angry on behalf of their constituents at decisions about rolling stock and franchises, will be disappointed if they believe that chastising a Minister, of whatever party, for the decisions of civil servants at the Department for Transport can be the equivalent of a magic wand, and make everything right. The structure and nature of the industry simply will not allow train operating companies to make their own decisions about which rolling stock is most appropriate for their passengers.

I have never been an advocate of the wholesale nationalisation of the railway industry and I am not about to follow in the footsteps of the late lamented Bob Crow by doing a 180° turn on that policy. However, I draw the attention of the House to my early-day motion 954, which points out that under the present Government the railway industry is about to be nationalised. The largest part of the railway industry is Network Rail. From September, it will be recategorised as a central Government body. It will therefore come under the remit of central Government: Whitehall—civil servants. It will no longer be a private company without shareholders, as it is today. May I therefore congratulate the present Conservative Government on nationalising the British railway industry?

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

Like many of my hon. Friends I am very much in favour of genuinely free markets. However, is not the point the fact that the market is mangled? It is not delivering for the customers—businesses and passengers—who are investing a lot of money, and for whom a properly functioning railway in the north of England is vital, just as it is in the south.

[Mr Harris]

My hon. Friend is correct, but I want to issue a caveat, and point out, in defence of the Minister, the Government and the previous Government—

[Mr Iain Wright]

Declare an interest.

[Mr Harris]

I will not declare an interest. I am not being paid the salary any more; I do not need to declare an interest. However, it is a fact that since 1993, railway rolling stock has been among the newest rolling fleet of any in Europe. We have an outstanding safety record and there have been record numbers of passengers. Nevertheless, it is clear from this debate and many others in the past that the current model is not delivering for a significant number of passengers. Rolling stock is one problem, and far too often Ministers and civil servants make those decisions over the heads of the train operating companies at the behest of the rolling stock companies. That is unacceptable and clearly must be addressed if we are not to have debates similar to this in future. Another clear failure in the market—I would say it is the biggest one—is that our constituents are paying far too much for their rail fares.

The market simply does not deliver on crucial aspects. It does deliver in some areas, however, which is why I am cautious about simply saying that everything would be wonderful under nationalisation. I remember when the railways were nationalised and everything was not wonderful. We have to be cautious about taking an ideological point of view, but this is not an ideological debate; it is a practical debate.

How do we ensure that our constituents get the best possible service from the rail industry? Let us cast ideology to one side and look at what can be done practically. We may well have to follow the Network Rail example and look at train operating companies and say that the private experiment has not worked.

[Ian Mearns]

There is an interesting dilemma for Government, as they have conceded on state ownership. When it comes to rolling stock and train operating companies, they agree with German, Dutch and French state ownership, just not UK state ownership. Is that not a paradox?

[Mr Harris]

My hon. Friend is absolutely correct that that is a paradox. I have some sympathy with the Minister, because I know that his civil servants are going over the heads of the train operating companies and deciding which rolling stock is most appropriate to which franchise. I am attending this debate because every decision taken on rolling stock has a domino effect on every other franchise. The TransPennine Express franchise serves my city of Glasgow. The west coast franchise, which was badly handled, also serves my constituency and the east coast franchise, which should not be privatised before the general election, also serves Scotland. We are all in this together, as it were. All passengers rely on decisions taken by the DFT. The Minister will no doubt say that it is a privatised industry and that such decisions are out of his hands, but they are not; they are very firmly in his hands. The question we should address is: is that the correct way to make those decisions?

We must make a decision. Either civil servants and Ministers should take responsibility as well as the blame—at the moment all they get is the blame—or they should give all those decisions to the private sector and make it a truly privatised industry. My gut instinct is that that model would not work for our constituents and it is our constituents, not political ideology, that must take precedence.

Railways

Tom Harris Excerpts

Thursday 25th April 2013 Commons Chamber

[Lilian Greenwood]

The west coast main line, of course, enjoys the advantage of having had a major infrastructure and rolling stock upgrade, all funded by the taxpayer, and the east coast main line is due to have a large investment in infrastructure and rolling stock, also paid for by the taxpayer. Perhaps the Minister would like to reflect on the comments Lord Adonis made in last year’s “Rebuilding Rail” report. Some years after taking the east coast main line back into a not-for-dividend operator, he acknowledged that the current arrangements hold back our state operator.

[Mr Tom Harris (Glasgow South) (Lab)]

Can my hon. Friend reassure the House that when the Government seek to put the east coast main line out for a new franchise, as they inevitably will, she will hold the Minister to account to ensure that whatever premium is paid by the new private operator will be at least the same as that which we are now receiving from the state-owned company, because anything less will surely be absolutely unacceptable to the taxpayer?

[Lilian Greenwood]

My hon. Friend makes an important point. Of course, it is not just about the premium payments. At the moment, because the east coast main line is run by a not-for-dividend operator, not only is it making the premium payments to the Treasury, but the £40 million surplus has not been shared with private shareholders; every single penny has been reinvested in improving services. I think that is what UK taxpayers and passengers want.

Cost of Living

Tom Harris Excerpts

Wednesday 16th May 2012 Commons Chamber

[Gavin Shuker]

The hon. Lady makes an excellent point. Ofwat, the industry regulator, lays out tough targets on water companies reducing leakage in some places, but not so tough targets in others. The fundamental problem is that if the cost of water being lost is less than the cost of making the repair, it is not economically viable for water companies to make the repair. That is why we need comprehensive action and a comprehensive water Bill, rather than a draft Bill, in this Session.

[Mr Tom Harris (Glasgow South) (Lab)]

Does my hon. Friend see any merit in the idea of alleviating drought conditions in the south of the country with some form of network distribution of water? That should be implemented in order to allow water from Scotland—believe me, we have too much of it—to be transported south in an efficient manner through a national pipeline network.

[Gavin Shuker]

We are jumping around in water here. My hon. Friend is my new colleague in the shadow Environment, Food and Rural Affairs team and I am sure hon. Members on both sides of the House would want to welcome him back to the Front Bench. He makes an extremely good point. What is required in the industry to move water from places where it is in good supply to areas where there is less? For me, that is not primarily about building a big pipeline from north to south; it is also means getting interconnectors between different water companies working appropriately. Of course, the carbon cost of that is great.

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[The Secretary of State for Transport (Justine Greening)]

I am obviously delighted to be here today. The hon. Member for Garston and Halewood (Maria Eagle) ought to try re-moding some time. We re-moded a lot of Ministers out of their cars at the last election, and I am pleased to say that many of them have had to get used to using the public transport system that many Ministers themselves use today, and very good it is, too. I came in on the District line today, and it was working perfectly.

We have had a broadly constructive and important debate on the cost of living, and some measured contributions from around the House. They have borne out that everybody realises the pressures that global oil and food markets and prices—combined, of course, with inflation—have put on household bills in recent years. That is why, even as we deal with the deficit left to us by Labour, this Government are taking action wherever we can to help family budgets. It is why, through raising the personal allowance, we are cutting income tax for 24 million people and taking 2 million people on the lowest incomes out of income tax altogether. It is why we have helped councils up and down the country to freeze the council tax for the second year running. It is why we cut fuel duty in the Budget last year, deferred the increase planned by the last Government in January, and cancelled another increase proposed by the last Government for this August.

When it comes to home owners being able to pay their bills, the most important thing we as a Government can do is to help maintain the conditions for the Bank of England to keep interest rates low. The hon. Member for Washington and Sunderland West (Mrs Hodgson) talked about the importance of that aspect of family budgets, and she is absolutely right. We have focused on that through the spending review, making a number of announcements setting out a credible plan to tackle the deficit and get control of our debts, meaning that we really help to keep interest rates low for the 11 million households with mortgages. That is in stark contrast to the impact of Labour’s plans.

I was very pleased to hear a number of Members welcome the Groceries Code Adjudicator Bill, which is in many respects long overdue. I look forward to the debate that will take place in this House to ensure it can be as effective as I am sure many Members want it to be.

The right hon. Member for Croydon North (Malcolm Wicks) and the hon. Member for Newport East (Jessica Morden)—I cannot see her in her place—talked about the importance of supporting families. This Government agree, which is one of the reasons why we have extended free nursery care to 15 hours for all three and four-year-olds and doubled the number of disadvantaged two-year-olds receiving 15 hours of free child care a week, helping 260,000 families. These are difficult decisions that we face, but we are doing our best to ensure that, in spite of that, we are helping the families that need our help and taking action wherever we can.

We need not take any lessons on the cost of living from Labour. Most people in Britain remember their record in government. Theirs was a Government who never lived within the public’s means, giving us the deepest recession since the war and running up the biggest budget deficit in our peacetime history. When it comes to measures that help to put money back into people’s pockets, we need not take any lessons from a party whose only approach to helping hard-working people make ends meet was to take more and spend more, raising tax 178 times, including 12 hikes in fuel duty. Labour Members talk about the cost of living, but on their watch band D council tax more than doubled; gas bills doubled; between 2004 and 2009 regulated train fares went up by nearly 20% and unregulated train fares went up by a quarter; and, for the first time since records began, GDP per capita actually fell in the last Parliament.

[Mr Harris]

rose—

[Ian Lucas (Wrexham) (Lab)]

rose—

Rail Reform

Tom Harris Excerpts

Thursday 8th March 2012 Commons Chamber

[Justine Greening]

The Labour party may not be prepared to rule out nationalisation, but I am.

[Mr Tom Harris (Glasgow South) (Lab)]

I am disappointed in the statement. In the time I have been in the House, I have never heard a ministerial statement so lacking in substance. This is not a statement; it is a coincidence of ink patterns on a bit of paper. The Secretary of State says that she wants £3.5 billion of efficiency savings by 2019, but she has not given us a single way of saving one penny. Was she even in the House yesterday when the Prime Minister told the nation that government was about making tough decisions? Where is a single tough decision in this statement? She does not have any solutions; all she has come up with is a series of clichés and warm words put together by civil servants not wanting to offend anyone.

[Justine Greening]

I recommend that the hon. Gentleman read the documents that we have published, which have a lot more of the detail that he wants. I am not going to take any lectures on tough decisions from someone who, when asked about Network Rail bonuses, said:

“Bonuses … are a matter for the company’s remuneration committee, not for Ministers.”—[Official Report, 24 June 2008; Vol. 478, c. 174W.]

I do not think that showed any backbone whatsoever.

Civil Aviation Bill

Tom Harris Excerpts

Monday 30th January 2012 Commons Chamber

[Justine Greening]

The hon. Gentleman correctly points out that exclusion and I will address his point shortly. When Sir Joseph Pilling reviewed that matter in 2008 he concluded that the current approach was appropriate.

Importantly, the CAA’s decisions will become more accountable because the Bill will provide greater access to challenge regulatory decisions. As the CAA discharges its responsibilities, it is essential that its decisions are guided by the needs of customers. Therefore, clause 1 establishes for the first time a single, clear, primary duty on the CAA to further the interests of consumers—all passengers and owners of air freight both now and in the future—and, wherever possible, to do that by promoting competition.

Some airlines have argued that the CAA’s duty should be extended to airlines as users of airports, alongside passengers. The airlines are important of course, but I am in no doubt that if conflicts of interest arise between airlines and passengers, the regulator must be squarely on the consumer’s side. To protect consumers at all airports, the Bill gives the CAA powers to enforce competition law concurrently with the Office of Fair Trading in the airport services sector.

[Mr Tom Harris (Glasgow South) (Lab)]

The Secretary of State makes a valid point about what should happen if a conflict of interests were to arise between passengers and airlines. However, can we not address this issue by stating in the Bill that the CAA’s prime obligation is to passengers and that the airlines are specifically a secondary priority?

[Justine Greening]

I do not think we need to go that far. As I have said, the Bill’s key purpose is to provide clarity on what the CAA must focus on primarily, which is consumers. It is important to provide that clarity.

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[Mr Tom Harris (Glasgow South) (Lab)]

Thank you for giving me an opportunity to contribute to the debate, Mr Deputy Speaker. Let me begin by offering my best wishes for the speedy recovery of the Minister of State, Department for Transport, the right hon. Member for Chipping Barnet (Mrs Villiers). I trust that when she returns to her duties after that speedy recovery, she will use her ministerial car rather more often and her push bike rather less often.

[Fiona Mactaggart (Slough) (Lab)]

Why?

[Mr Harris]

I would never suggest that any Minister should do anything other than what I did when I was a Minister.

Too often in these environmentally conscious days, those in the airline industry are seen as the bad guys. I see a parallel with the car industry and car ownership. Although I do not consider myself to be a class warrior, I observe some class consciousness in the debate. Car ownership was initially seen as a good thing that improved the quality of the lives of those who could afford it, but as cars became cheaper and more ordinary working people could afford to own one, they suddenly became a threat to the environment. I see the same happening with air travel. It was a wonderful thing that made every corner of the globe accessible; but then ordinary people had the damned cheek to afford to use it regularly. Fares were reduced, and suddenly it too was a threat to the environment—what a surprise—rather than the opportunity that it used to be. My own view, which I hope is shared throughout the House, is that a healthy, expanding airline industry is essential to any successful nation, and if the Bill contributes to that end, I welcome it.

[Mark Lazarowicz]

Does my hon. Friend agree that it is also important for the aircraft industry to try to produce more environmentally friendly and environmentally efficient aeroplanes, and that the absence of measures to encourage that is regrettable?

[Mr Harris]

I entirely agree, and that is precisely what is happening in the airline industry. It is acutely aware of its responsibilities in this respect, which is why I do not see it as the enemy of the environment.

I note that my party’s Front-Bench team has accepted the Government’s decision not to go ahead with the third runway at Heathrow; indeed, the shadow Secretary of State said that in today’s debate. I trust that that acceptance is based on the parliamentary arithmetic—on the fact that the Members who support the third runway are outnumbered by those who do not—rather than on agreement with the Government’s arguments. The real reason the Conservative party opposed the third runway when in opposition was votes. It was concerned about seats to the west of London, not the health of the UK economy and the airline industry on which we depend. It was seats that were uppermost in the Conservative party’s mind when it chose to oppose the previous Government’s support for Heathrow.

[Fiona Mactaggart]

My hon. Friend refers to seats to the west of London. Does he accept that many of those seats depend hugely on Heathrow for local employment?

[Mr Harris]

I entirely agree. In 2009, I spoke twice in support of the Government’s plans to build a third runway, and I did so with jobs and the economy in mind, along with the conviction that the Conservative party’s stance at that time was based on cynical electoral calculation rather than any concern for the environment.

I look forward to hearing the contribution of the hon. Member for Spelthorne (Kwasi Kwarteng). I believe that, like me, he supports the third runway—although he might wish to correct that. His predecessor in this House also supported it; he courageously stood against his party’s line, and it is a pity that he chose to retire at the last election—although I am, of course, delighted that the current hon. Member for Spelthorne is now a Member of this House.

The hon. Member for Perth and North Perthshire (Pete Wishart) referred to the sale of British Midland International and the impact on Scottish air services. Those of us who supported—and still support—Heathrow’s third runway pointed out the blindingly obvious fact that a continued squeeze on capacity at Heathrow would inevitably lead to the withdrawal of domestic slots in favour of more profitable international slots. Earlier this month, BAA chief executive Colin Matthews warned:

“Capacity constraints are damaging the UK economy today when the country can least afford it.”

The Conservatives may have won the vote on the third runway, but they have certainly not won the argument.

[Kelvin Hopkins]

May I point out both that our party has also accepted that there will be no third runway at Heathrow and that one way of relieving capacity at Heathrow would be by shifting some medium-haul and short-haul flights to Luton?

[Mr Harris]

My hon. Friend makes a perfectly understandable constituency point, which I am sure will not have gone unnoticed by the Luton Observer, or whatever his local paper is called.

The provision of security is of great concern to all our constituents. The Government’s policy paper that was published at the same time as the Bill in November claimed that the transfer of aviation security regulations functions would save the taxpayer £24.6 million over 10 years. However, it also stated that the CAA would incur costs of £5 million each year, more than double the level of savings to the Department for Transport. Will the Minister explain either in summing up or in Committee why this transfer of powers appears to result in a net annual cost increase of £2.5 million? If that is because we can expect a more secure airport experience, I welcome the move, but if there are to be higher costs but no improvement in security, I will be concerned, particularly if that extra cost is to be passed on to the travelling public, which I understand is the case.

I welcome this Bill, however, and, without wishing to second-guess the great wisdom of the Labour Whips Office, may I say that I look forward to scrutinising it in Committee in the weeks ahead?

Rail Fares

Tom Harris Excerpts

Wednesday 11th January 2012 Commons Chamber

[Justine Greening]

I think many people watching the debate will wonder why the hon. Lady’s party did nothing in 13 years. I will shortly publish a Command Paper setting out our approach to tackling a number of the broad challenges that exist.

[Mr Tom Harris (Glasgow South) (Lab)]

I am disappointed that the Secretary of State is being so churlish and saying that the last Government did nothing to reduce costs. Is she even aware that in the five-year control period ending in 2009, they forced Network Rail to improve its efficiency by 33%? Why has she not admitted that that was a major achievement, or that further efficiency savings were included in the next control period ending in 2014?

[Justine Greening]

I do not think there is any way in which the hon. Gentleman can dress up the outcome of the McNulty report, which set out very clearly just how expensive our railway industry is compared with those in mainland Europe.

I understand that rail fares are a large part of household expenditure for many people, particularly commuters, who often travel significant distances to go to work and earn a living. Of course, the taxpayer subsidises the rail industry alongside rail fares, and thanks to difficult decisions that the Government took in the emergency Budget and the spending review, the Chancellor was able to announce in the autumn statement that we would fund a reduction in the planned increases in fares so that regulated fares would increase by RPI plus 1%. That reduction is helping millions of people who use our trains.

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[Justine Greening]

I really suggest that the hon. Lady stops digging the last Labour Transport Secretary into a deeper hole than he is already in. The contract is absolutely clear-cut, stating categorically in black and white that the flexibility levels introduced by her party’s Government would be reintroduced the year after their abolition.

[Mr Tom Harris]

Irrespective of what the legal agreement was, does the Transport Secretary personally believe that it would have been a good idea to renegotiate a further period for which the flex would not have been in force?

[Justine Greening]

I do not, because I believe that the train operating companies need flexibility, so I support my predecessor’s decision. If I did agree with negotiating a further period, it would represent a spending commitment. I agree with the shadow Chancellor that now is not the time to make any further spending commitments, even if the hon. Member for Garston and Halewood does not. We can see the absolute disarray that the Labour party is now in.

I find it incredibly frustrating and galling, as I think many other people do, to hear on one day the leader of the Labour party—the party that left this country in a worse financial state than any other Government ever have—profess that we must be responsible, even though Labour was irresponsible and did not have the custodian values that it needed in looking after our public finances, then the day after, to hear Labour talk about more spending and more debt in the middle of a debt crisis. The very people who let this country down the most and left our public finances in their worst state ever are now the ones talking about responsibility. Most people outside will see that for exactly what it is—absolute political gibberish.

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[Mr Tom Harris (Glasgow South) (Lab)]

Since the Secretary of State spent some time talking not about rail fares but about the economic legacy of the last Labour Government, I wish to make one brief point first. As an Opposition Member, she was a member of the shadow Treasury team and, up until November 2007, the Conservative party’s policy was to support every penny of spending made by the Labour Government. If she is claiming that the deficit that the Government inherited was created in the last 18 months of the Labour Government, that is something that the House would like to debate. She cannot pour scorn on the spending of that Government when she sat on the Opposition Front Bench and supported every penny. That is double standards. The Secretary of State shakes her head, and I am more than happy to give way if she wants to explain why she did not tell the then shadow Chancellor that he should not support Labour’s spending plans.

[Justine Greening]

Everybody in Britain knows exactly which party got the country into the financial mess. It is precisely why Labour Members are on the Opposition Benches now: it was them.

[Mr Harris]

That says quite a lot about the Secretary of State’s reluctance to accept her own culpability for supporting the spending plans of the previous Labour Government.

I do not believe that the railway industry is broken, or a basket case. I was proud to serve as a railway Minister in the last Labour Government, and I understand the successes that have grown from 13 years of Labour governance of the railway industry. We have more people travelling on the railways than at any time in their history outside of wartime. We have more services every working day than ever before, and punctuality is at an all-time high. Those were achievements that this Government have managed to continue—and I hope that that continues—but fares are a fundamental weakness. They are the crucial interface between the travelling public and the railways and—irrespective of the public subsidy to the railways—if we do not make rail travel affordable for ordinary people, it will not be surprising if they feel that the railways are letting them down.

The previous Secretary of State for Transport, the right hon. Member for Runnymede and Weybridge (Mr Hammond), famously described the railways as a “rich man’s toy”. A few weeks ago, I challenged the Secretary of State in the Transport Committee about whether she agreed with that assessment and, understandably, she did not want to commit herself. She told the Transport Committee that she wanted to see the balance between the taxpayer and the fare payer move towards the latter. She also said that in the long term she wanted the fare payer to pay less. Well, she can have one or she can have the other, but she cannot have both. It is clear that unless the taxpayers’ contribution is increased, fares will not come down. The Secretary of State refused to answer that point at the time.

[Paul Maynard]

The hon. Gentleman raises the interesting question of whether the burden can be switched to the fare-paying passenger at the same time as reducing fares. Does he agree that if we do what McNulty recommends and try to reduce the overall cost base of the railways, that conundrum could be solved?

[Mr Harris]

I am sure that the hon. Gentleman, who also sits on the Transport Committee, is as much of an expert as any other Member, and I will agree to consider his comments.

The Prime Minister was wrong today and failed to give the facts about the policy of the last Labour Government and the policy of this Government. Even if it was for only one year, Lord Adonis managed to challenge the rail industry on the so-called basket of fares and whether the RPI plus 1% policy should apply to individual fares or to a basket of fares. He got a lot of support on both sides of the House for insisting—against the arguments of his own officials and the resistance of the industry—that that policy should apply only to individual fares. As we know, if it is applied to a basket of fares, some can go up by 6%, instead of 1%. Whether or not that was a temporary agreement for one year, surely when a new franchise is let the Minister has a responsibility to challenge the industry and set such an arrangement in stone at the very start.

When the railways were first privatised, the policy—it was then RPI minus 1%—was applied to a basket of fares, as agreed with Ministers. That was what Lord Adonis succeeded in challenging, but sadly only for one year. Will the Secretary of State give a commitment that, in future new franchises, the Adonis approach will be applied to fares to protect fare payers and to ensure that train operating companies take money out of their own pockets, rather than the pockets of fare-paying passengers?

[Mrs Villiers]

Will the hon. Gentleman give way?

[Mr Harris]

I only have six minutes and the Minister will have plenty of time to wind up at the end of the debate.

I hope that the Secretary of State will not take the same path as has been followed in Scotland, where the SNP Government—for the first time since the 1960s and Beeching—are threatening to close stations, including Kennishead in my constituency, even as passenger numbers are increasing there and throughout the network. That is a disgraceful approach for any so-called progressive Government to take, and I hope that the Secretary of State will make a commitment that she will not close stations or lines in the rest of the country.

It is too easy to criticise rail services and forget some of the major advances that have been made since privatisation, but at the crucial interface between train and customer, there is a growing crisis of affordability—on the personal level, rather than the national taxpayer level.

[Charlie Elphicke]

The hon. Gentleman says that the Adonis policy was for one year only. Was that not an election year? I am sure that most people would agree that that is the kind of cynicism that used to characterise the previous Government and it is a good thing that we have got rid of that.

[Mr Harris]

Most fare-paying passengers would not agree that it is a good thing that that policy was got rid of, because they are paying more as a result. Perhaps the hon. Gentleman represents constituents who are very wealthy and can afford to pay unlimited increases in fares. If he is claiming that it was a cynical manoeuvre by Lord Adonis, he has clearly never met him. It was officials who recommended that the agreement should be for one year. Is the hon. Gentleman really saying that a Secretary of State should ignore legal advice? That is disgraceful and completely misrepresents what the then Secretary of State and Labour Government were doing for rail passengers.

--- Later in debate ---

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

Time is too short to refer to every contribution to today’s debate, but I welcome all those that have been made.

The hon. Member for Glasgow South (Mr Harris) criticised a fares system that he presided over as rail Minister. My hon. Friend the Member for Wimbledon (Stephen Hammond), along with many others, pointed out that RPI plus 1 and above-inflation fare increases were introduced under the Labour Government and did not start under the coalition.

The hon. Member for Pontypridd (Owen Smith) commented on the Government’s continuation of a major investment programme and called for a simpler ticketing system. My hon. Friend the Member for Cambridge (Dr Huppert) also welcomed our commitment to a programme of rail improvements that is probably the biggest since the Victorian era. He welcomed the fact that we had been able to prioritise it despite the deficit because of the difficult decisions that we have made in other areas. My hon. Friend the Member for Milton Keynes South (Iain Stewart) welcomed the progress on East West Rail and made some important points about how fares operate.

The hon. Member for Bolton West (Julie Hilling) made a moving speech about the hardship that her constituents are feeling. As for buses, we are of course doing all that we can within the constraints of the fiscal straitjacket created by the deficit that we were left by Labour. Within those constraints we are of course striving to help those who are facing hardship with the cost of living.

My hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) pointed out the impracticalities of having a single uniform peak throughout the country and that the Opposition transport team appear not to have read the speeches made by their leader or the shadow Chancellor. I particularly liked my hon. Friend’s reference to the game of policy Twister that they have unfortunately had to play today.

The hon. Member for Lewisham East (Heidi Alexander) commented on the concern about the effect of inflation and fare rises. That is exactly the concern that the Chancellor responded to in his autumn statement in putting the limit on the average rise in national rail, tube and bus fares at RPI plus 1. That help for people struggling with the cost of living was welcomed by my hon. Friends the Members for Fylde (Mark Menzies), for Cambridge and for Milton Keynes South. We ought to pay tribute to the Secretary of State for her role in that. We were able to do that at the same time as delivering a major investment programme only because of savings made elsewhere in government to tackle the deficit—the kind of spending reductions that Labour has consistently opposed.

[Mr Tom Harris]

“Many families are feeling the pinch because of stratospheric fare increases—racing ahead of inflation—inflicted by the Department.”—[Official Report, 24 July 2007; Vol. 463, c. 691.] Those are not my words, but those of the Minister in this House. Can she point out any improvements that have been made since then?

[Mrs Villiers]

The former rail Minister has made my point for me. The Opposition must be suffering from collective amnesia if they think that this problem suddenly appeared in May 2010 when the coalition took over. In 2006, a Labour-dominated Select Committee described the Labour Government as “breathtakingly complacent” on value for money in fares. The truth is that concern about rail fares has been growing for years, as my hon. Friends the Members for Bexleyheath and Crayford (Mr Evennett), for St Albans (Mrs Main) and for Milton Keynes South have said.

A major reason for the increases is that under Labour the cost of running the railways spiralled and hard-pressed passengers and taxpayers were left to foot the bill. It is fair that passengers contribute to the cost of running the railways and to the massive programme of upgrades that we are taking forward, but neither fare payers nor taxpayers should have to pay for industry inefficiency. This Government understand how vital it is to get the cost of running the railways down and to tackle the legacy of inefficiency that we inherited from Labour. That is the long-term, sustainable solution to delivering better value for money for taxpayers and fare payers.

--- Later in debate ---

[Mrs Villiers]

The hon. Lady need not worry as I will come on to the fares basket in a moment. Before I do, it is crucial to say that we are determined to deliver our goal of ending the era of above-inflation fare rises. The only long-term, sustainable solution to delivering better value for money for taxpayers and fare payers is to get the cost of running the railways down, not the short-term, uncosted, poorly thought-through proposals that we have heard from the hon. Member for Garston and Halewood (Maria Eagle) this afternoon.

We have started reform already, with the reform of the franchising system and our commitment to further electrification to reduce costs. We are also determined to see the rail industry working together better, with a strong shared incentive to reduce costs and deliver better outcomes for passengers.

Another key plank of getting the cost of the railways down is making working practices on the railways more efficient. When Labour was in charge, pay in the rail sector rose more than twice as fast as it did in the economy more widely. Difficult decisions may lie ahead, and I do not believe Labour is capable of taking those decisions where the interests of the unions conflict with the goal of getting better value for money for passengers.

[Mr Tom Harris]

Will the Minister give way?

[Mrs Villiers]

No.

Labour failed to deal with the problem in government, and its heavy dependence on union funding would make it utterly incapable of dealing with it if the country were unwise enough to return a Labour Government. If the Opposition were really serious about getting better value for money for passengers, they would not be making glib announcements in the House; they would be remonstrating with their friends in the rail unions about a responsible approach to pay, from the boardroom to the platform.

I turn now to the fares basket and the flat cap on prices. Frankly, the shadow Secretary of State was in all sorts of trouble on the matter. The claim made by her and the Leader of the Opposition that the suspension of the cap was an ongoing policy, representing a dramatic change of heart by Lord Adonis, is simply not borne out by the facts of what Lord Adonis did in government.

[Mr Harris]

Will the Minister give way?

[Mrs Villiers]

No. The hon. Gentleman did not do anything about the flat cap in his entire time as a rail Minister, so I will not take his intervention on the matter.

Lord Adonis inserted in the franchise contracts a one-year suspension of the flat cap. That conflicts with what the shadow Secretary of State said today.

[Mr Harris]

I promise it is the last time, but will the Minister give way?

[Mrs Villiers]

No.

More important, the shadow Secretary of State has given us no indication of just how much it would cost to repeal the fares basket provision. Amazingly, she did not even seem to understand that it would have a cost. I can assure her that it would. She has given no credible explanation of how Labour would pay for the change, and whether it would come from higher fares, higher taxes, cuts in services, the cancelling of extra carriages or upgrades or more borrowing.

Just one day after the Leader of the Opposition finally acknowledged that dealing with Labour’s deficit means that there is no more money left to spend and said that the Opposition would take a more responsible approach, the shadow Secretary of State stood at the Dispatch Box making spending commitment after spending commitment on rail fares, concessionary bus travel, local government funding, school transport, VAT—the list goes on and on. She and the shadow Minister, the hon. Member for Nottingham South (Lilian Greenwood), made several billion pounds of commitments today.

The truth is that when it comes to the cost of living and the economy, Labour just does not get it. It must be just about the only political party in the world arguing that the way to get out of a debt crisis is by borrowing more money. Whether it is a credit card bill or the international gilts market, that simply does not work. There is no way that interest rates could have stayed at today’s low levels without the action that we have taken to deal with the deficit and avert the crisis enveloping other European countries with public finance positions almost as bad as ours.

In government, Labour brought this country to the brink of bankruptcy, leaving Britain with one of the biggest structural deficits in the developed world. Today’s debate demonstrates that, contrary to what the Leader of the Opposition said, Labour has learned nothing in opposition. The biggest threat to the cost of living in this country is the spiralling interest rates that we would get if we gave way to the demands that Labour makes every single day in the House for more and more spending.

It is clear that if Labour had won the last election—thankfully it did not—it would have utterly failed to take the tough decisions needed to get the deficit under control. That would have had disastrous consequences for the cost of living for millions of families right across the nation. I urge the House to reject the motion.

Question put.

Rail Investment

Tom Harris Excerpts

Thursday 17th February 2011 Westminster Hall

[Paul Maynard]

I agree almost entirely with that point—but perhaps only 80%. It very much depends on where someone is flying from and where they are going to, and I suggest that in 15 years’ time perhaps no one will be flying domestically to Heathrow, if only because it might have ceased to be an international hub. We might all be flying to Paris, Amsterdam or Frankfurt, but that is another matter entirely.

The key variable in the discussion on HS2 is demand. Whether demand will increase is contested, but as someone who travels regularly on the west coast main line, I know full well that that line is already reaching capacity. The east coast main line is also struggling, and we cannot have people being herded into pens at Euston station on a Friday evening and say that we are not at capacity already. I accept entirely the argument that extra capacity has to be provided, but it is not simply a matter of expanding a few platforms here and inserting a few carriages there, making cattle class a literal concept for millions of travellers. We have to discuss what type of capacity to provide, and I realise that that is perhaps a confused area for people on both sides of the argument.

[Mr Tom Harris (Glasgow South) (Lab)]

The record will show that the hon. Gentleman has just referred to a literal cattle class. I hope that he will take time to examine exactly what that means. When I was in a previous position and people used to challenge me about whether it was right to treat humans in the same way as cattle, I was always quick to point out that the cattle’s final destination was somewhat less enjoyable than Paddington.

[Paul Maynard]

I accept the hon. Gentleman’s point, but the conditions that many passengers are forced to face on our inter-city trains are analogous to those experienced by animals, even if their end destination is perhaps more pleasant.

--- Later in debate ---

[Kelvin Hopkins]

The hon. Gentleman raises the point that I want to address now. The problem with putting more freight on such routes is that it would be impossible to fund the provision of sufficient gauge. It would be prohibitively expensive to make all the tunnels, bridges, platforms and so on able to take freight. We must have trains these days that are capable of taking full-scale containers—that is W10—and I suggest a scheme that could take full-scale lorry trailers on trains. Hauliers would put their trailers on the trains and they would be taken straight through from Glasgow to Rome, or Rome to Glasgow. I have spoken to the logistics managers of big companies and asked whether they would like to bring their water, wine or whatever from Bordeaux, which is a favourite town of mine, to Birmingham. They say it would be wonderful—fabulous—to send it all the way on the train. What they do now is train it to the coast of the continent and then put it on lorries. That transit would become unnecessary. They could roll a trailer on in Rome or Bordeaux and roll it off in Birmingham or Glasgow.

The problem with trying to upgrade all the existing routes for freight is that there would have to be a through-operation for continental freight trains. They are larger gauge and cannot get through our platforms, because they are wider, or through our tunnels or under our bridges, because they are taller. Certainly we could never have lorry trailers or double stack containers, as we are suggesting. To get serious volumes of freight through, a dedicated freight route is needed, and that is what our scheme is about. As I have said, I have no pecuniary interest in it. I have been passionate about it ever since I heard about it some years ago, and I have spoken on many platforms. I took a team of people to see Geoff Hoon when he was Secretary of State for Transport; they included representatives of supermarkets, Eurotunnel, the rail constructors and AXA—the insurance giant that funds terminals. There were 15 of us. I think that we answered every question put to us adequately. We could not persuade the Secretary of State then, but I hope that the present Government may listen sympathetically, at least.

What I propose could be done very cheaply. We have a precise route, which would involve only 14 miles of new route, nine of which would be in tunnels. The route would, as I have mentioned, use the Woodhead tunnel. The rest would be on existing under-utilised routes and old track bed. Initially we put a cost of £4 billion on it. One of the rail constructors said it could do it for £3 billion. We are now being generous and suggesting £6 billion; but that is still one third of what we propose to spend on Crossrail—which I also support. Nevertheless, our whole scheme, with its 400-mile route, would cost a third of what we are to spend on Crossrail, and would be commercially viable, because of the amount of traffic on it.

[Mr Tom Harris]

Just for the record, and so that we are talking about exactly the same figures, is my hon. Friend aware, when he talks about the scheme costing a third of what Crossrail does, that the Government’s funding of Crossrail is less than £6 billion, and is a third of the total?

[Kelvin Hopkins]

Indeed. I suggest, although I am a public investment person, that the scheme I am describing would attract outside investment. Already, at the meeting with Geoff Hoon, AXA said it would fund the terminals. It already does that. The prospect would be commercially viable. We suggest it would take 5 million lorry loads off the roads.

Finally, the scheme would make a massive difference to carbon emissions. Heavy freight taken by road produces 12 times as much CO₂ per tonne-km or tonne-mile as freight taken by rail. Even lighter freight produces six to eight times the amount. That is a massive carbon saving from rail. Every tonne we put on to rail makes a substantial saving in CO₂ emissions on those 5 million lorry loads a year on a 400-mile route. That would also transform the links between the northern economies and the continent of Europe and breathe new life into the northern, Welsh and Scottish economies. It would not just be about the south-east. At the moment lorries must get through the treacle of the south-east. With a through, dedicated rail freight route we would overcome that problem. It would be of enormous benefit to colleagues who represent northern constituencies. Instead of being peripheral to the core of the European economy they would become part of the central European economy, which would benefit them and the country enormously.

--- Later in debate ---

[Mr Tom Harris (Glasgow South) (Lab)]

I have been involved with the railway industry to a greater or lesser degree for the best part of 20 years now, but I have never suffered the ignominy of going native. When I was the Minister with responsibility for railways—the Minister is welcome to use this joke if she wishes, although most of her audiences will have heard it a number of times from me—I used to joke that although I had succumbed to the lure of the railways and started buying railway magazines regularly, I was always careful to buy a copy of Playboy and put the railway magazine inside it to avoid embarrassment.

There is a healthy turnout of right hon. and hon. Members here. It says something about the lure of the railways that 80% of our constituents do not use them—I expect that it is more than 80% in most constituencies—but the subject attracts and engages Members of Parliament. I suspect that most of us receive more letters a week from our constituents about railways than about motorways or local roads, despite the fact that roads are a vastly more popular mode of transport.

[Kelvin Hopkins]

Are the railways regarded as a national treasure like our forests?

[Mr Harris]

I will refrain from trespassing on the Government’s sadness at this juncture.

Although I do not stand every weekend with a flask of tea, a pair of binoculars and a camera at the end of the platforms at Glasgow Central, I am, if not an enthusiast, a strong supporter of the railway industry. I congratulate the Government, because most of us feared the worst when this shower came in.

In the previous Parliament, the Labour Government did a great deal to invest in the railways to try to improve the services that our constituents rely on. The figures show that we have the largest number of passengers travelling on the railways, apart from during the wartime period, since they began. We also have the best safety record and there are more services running per weekday than at any time in the history of the railways. There was concern upon the arrival of the new Government, whose Ministers seem unable to speak without using expressions such as, “Cleaning up the mess left by the previous Government,” and talking about deficits and so on. We assumed that that would be a simple mechanism and excuse for starving the railways of investment. However, I must say, in all seriousness, that that has not happened, and I am delighted about that.

I am also delighted about the Government’s commitment to High Speed 2, and I regret that my own Government only saw the light on high-speed rail in the latter part of their period in office. That was a mistake, and I accept my own personal responsibility for not pushing it as hard as I could have done when I had the opportunity to do so. I was the Minister who saw through the Crossrail Act 2008, so I am delighted that Crossrail, as well as Thameslink, will be fully funded. There is a lot to celebrate in relation to the railways—there always has been, even at the most difficult times in the network’s history. We have now had two successive Governments who seem to have a genuine commitment to growing the network.

On procurement, my right hon. Friend the Member for Derby South (Margaret Beckett), who is no longer present, mentioned that the manufacturing base of the railway industry in this country is, sadly, significantly smaller than it has ever been. She mentioned Bombardier in particular. I totally understand the pressure that Ministers are under in relation to procurement and an open procurement process throughout the European Union. The Minister will be aware, and she will have been told by her officials, that certain European countries somehow manage to get around the procurement rules and, miraculously, give very large and helpful contracts to their domestic manufacturers rather than to foreign competitors, which is something that Britain has, sadly, never managed to do.

I do not expect the Minister to deviate from her line—I understand the legal ramifications if she were to say that she agrees with me in any respect at all—and I do not even expect her to mention this when she makes her summing-up speech, but she will find very little, or no, opposition from my party if she could find a way of making it easier, within the rules, for British manufacturing companies to be given the same kind of contracts that foreign companies get from their own Governments. If she has that fight with the Treasury, she will have my full backing.

Luton is very well represented on the Transport Committee, and my hon. Friend the Member for Luton North (Kelvin Hopkins) made a point about signalling, which is absolutely crucial. I will not labour the point, because he made it very well, but, given that there is no commitment to building new lines outside HS2, if we are to get more trains more frequently on the existing network, the only way of increasing capacity is to invest in new signalling. When we were in Brussels last week, we heard about the ongoing Galileo project. It is a new satellite system that might, in a couple of hundred years, if it is given an infinite amount of money by every country in the European Union, be able to go into operation. It is the kind of global positioning system that would help provide railways with a satellite navigation system in future, provided that it is accurate enough, which it is not yet. Perhaps Galileo, if it is given an infinite amount of money, might be able to provide that solution.

Value for money is crucial to the railways. My hon. Friend and I are members of the same party, but I hope that he will not object if I say that we come from different parts of it. We have a different view of who owns the railways and whether public or private ownership is the right way. I shall let you conclude for yourself, Mr Owen, which side I fall on and which side my hon. Friend supports. I do not think it matters much whether Network Rail is publicly or privately owned. The fact is that the McNulty review on value for money is absolutely crucial, if we are going to identify ways to cut the costs of the railways.

[Kelvin Hopkins]

McNulty has concluded that our railways cost up to 40% more than continental railways to run. The only major difference between them and us is that they are publicly owned and integrated, while we are privately owned and fragmented. I have made that point to the Secretary of State, who did not strongly disagree.

[Mr Harris]

I am grateful, as always, for my hon. Friend’s intervention, but I disagree with him. Network Rail has had imposed on it an obligation to improve its efficiency and make significant improvements year on year. I do not believe that it is a failing organisation, or that it matters whether it is privately or publicly owned. I am glad, however, that the Secretary of State has thrown out any pretence that Network Rail is a private company, inasmuch as he does not seem to care whether the National Audit Office will, with the stroke of a pen, commit Network Rail’s debt to the public books, which Ministers in the previous Government went to great lengths to avoid. The Secretary of State has taken a more relaxed, and probably more sensible, approach. By the end of this year, Network Rail may well be categorised as a nationalised company. However, if it is not efficient and is not doing the job, does it really matter who owns it? We must get efficiencies back into the railway industry, and we must make sure that the public purse, which is asked to pay a significant amount of the cost of the railway industry, is getting value for money. That is the way to restore people’s trust in the railway industry.

In the run-up to the general election, the Labour Government had a much greater willingness to look at longer franchises. The franchising process itself costs huge amounts of money, not only for the competing companies but for the Department for Transport. The figure of £5 million is often quoted as the cost to the Department, and the longer the franchise, the less often that cost has to be borne. Recently, I had an interesting conversation with an ex-civil servant, who shall not be named. He told me that the reason why seven years was seen as the best period for railway franchises to begin with—from 1995, when the railways were privatised—was that they would start in 1995 and end after the first term of an unpopular Labour Government, at which point, the Conservatives would be able to come back in and look again at the franchise system. But things did not quite work out that way. Seven years is clearly too short a period, and some of the franchises that have been let recently are, for practical reasons, even shorter than that. I hope that we move to a longer franchise period of, perhaps, a standard 10 years, with a two or three-year extension, depending on performance.

I will mention open-access and freight operators in the same breath, because those two users of the network are entirely free of public subsidy of any kind. Open-access operators are, in my view, a good thing. That may not be the view of certain officials in the Department, but we should welcome a private company if it can come in and run a profitable passenger service between two points without seeking any public subsidy, without taking any of the revenue from existing franchises, and without causing any delays to other franchises or to freight operators. I am disappointed that the Wrexham, Shropshire and Marylebone railway finally shut up shop at the end of January, which was a great blow to those people who used it. I say to my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), who chairs the Transport Committee, that open-access operators are of great interest to the wider railway and to the travelling public. I hope that, at some point soon, we will have the opportunity to look at the whole open-access framework in order to think about what makes open access valuable, what makes it work and, crucially, what makes it fail.

My hon. Friend the Member for Liverpool, Riverside has mentioned fares, and I hope that the Minister will address that issue when she speaks. When Lord Adonis was Secretary of State for Transport, he made an instruction to the train operating companies that resulted in a radical change from previous practice. As has already been said, the retail prices index plus 1% fares annual increase was interpreted in a very generous and broad way by the train operating companies. The highest increase had to be RPI plus 1%, but the train operating companies would take a basket of fares. Within that basket, there could be reductions and increases by up to RPI plus 6%. However, Lord Adonis said that all regulated fares must be increased by a maximum of RPI plus 1%. That took away a lot of manoeuvrability and flexibility from train operating companies, who obviously had a vested interest in increasing season tickets and other fares by more than RPI plus 1%. There may well be perfectly valid reasons for moving away from that approach. If possible, will the Minister say something about where we are now and what effect that policy has had during the past 18 months or so?

Innovation does not sound as if it is directly related to priorities for investment, but the issue comes back to value for money. The criticism made by my hon. Friend the Member for Luton North of the privatisation of the railways is entirely valid in the following respect. It is the only privatised industry in which innovation virtually disappeared—from the point of privatisation until now. In almost every other industry that was intrinsically profitable and was therefore privatised, innovation flourished. However, that has not happened in the railway industry. I tried to do something about that when I was the Minister, but there is very little that the Minister and the DFT can do, because it is up to the industry. If there is a level of innovation that can transform the processes within the industry and the passenger experience, that is how we partly move towards a situation in which we develop better value for money for the passenger.

[Kelvin Hopkins]

One of the problems is that the railways are long-term and expensive and private companies have short-term balance sheets. Inevitably, the tendency is to sweat the assets to maximise profit in the short term and leave long-term considerations to others.

[Mr Harris]

That is undoubtedly the case, but I do not accept that that is necessarily an immovable barrier to innovation. Network Rail is the greatest purchaser and procurer in the whole of the industry and it works in the long term. Frankly, many of the manufacturing companies that rely on contracts from Network Rail want to deal in long-term investment and want a long-term reassurance that the work will be there 10 or 20 years down the line. If the will is there, innovation can happen and, as I have said, that is irrespective of whether the industry is privately or publicly owned.

I shall say a few words about High Speed 2. I have long been a supporter of the project, although not on environmental grounds. As Rod Eddington said in his 2006 report, there may well be a case for high speed on capacity grounds, but there is probably not an environmental case. In addition, there is probably not a great case in terms of connectivity, because Britain is a relatively small country and is already pretty well connected. However, there is a case for high speed on capacity grounds. When we get letters and complaints from our constituents, apart from fares, capacity is the burning issue at the moment. It has been for a number of years and will continue to be until we do something serious about capacity. HS2 will relieve capacity on the west coast main line, and I hope that it will do something for freight as well.

I worry about the debate that is developing in this country on HS2 and that supporters of it are dismissing out of hand the concerns of people who live along the line and colleagues who represent communities based along the line. I hope that we can conduct that debate in a more consensual and less provocative manner.

[Mrs Villiers]

The hon. Gentleman is too pessimistic when he says that the supporters of HS2 dismiss the concerns of local communities. As far as I know, the vast majority of supporters of HS2, including the Government, take those concerns very seriously. We believe that significant efforts need to be made to mitigate what will inevitably have some local impact on communities.

[Mr Harris]

I accept the Minister’s reassurance on that. I simply speak from the point of view of reading reports of the debate that is going on. I am not trying to separate the arguments; I am trying to bring people together. I make the point that people’s concerns are not down to nimbyism or the fact that they are selfish or somehow anti-public transport. People have valid concerns, which can be overcome. HS2 is a nationally important strategic piece of infrastructure that must go ahead for the good of the country, but we cannot sweep those concerns under the carpet. I have heard the Minister say that those concerns will not be swept under the carpet, and I therefore hope that between now and when construction starts, we can come to some kind of agreement and compromise. We need to accept that those concerns are absolutely valid and that people have a perfect right to protest and raise concerns about something that might well have an adverse impact on their local environment. I thank you for giving me the opportunity to speak, Mr Owen.

--- Later in debate ---

[Chris White]

I agree with that specific point. However, if China, which has an economy twice the size of ours, is considering whether high-speed rail gives value for money, despite the point made by hon. Friend we should think again.

As the Eddington transport study highlighted, it is not that Britain’s transport system is not quick enough, but rather that it is extremely dense and we need greater investment in capacity.

[Mr Tom Harris]

The hon. Gentleman advocates that we follow China’s example on high-speed rail. I presume that he is aware that when the Chinese want to build a high-speed line they demolish houses that get in the way. Planning arrangements there are rather less democratic than ours. I would be wary about following that example.

[Chris White]

Those last two interventions show the similarities and differences in how our two countries operate.

The Committee says that we are reaching full capacity and that we need to put extra capacity in place, and I respect that. However, high-speed rail is not the only answer, and I believe that that should be investigated. The Department for Transport’s report on alternatives to high-speed rail, rail package 2, was able to deliver the necessary capacity improvements at a superior rate of return, and it was costed at a mere £2 billion. We should be considering all these options rather than deciding on large-scale prestige projects. Further areas of concern could be highlighted, such as the potential economic disadvantage that may be caused to other areas of the country that do not have access to the high-speed network.

As I said, I am grateful that the Committee chose to consider the matter, and I believe that it will provide a platform for real debate on our rail investment priorities over the coming years. I hope that everyone will engage in it fully.