Railways

– in the House of Lords at 2:50 pm on 29 November 2007.

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Photo of Lord Berkeley Lord Berkeley Labour 2:50, 29 November 2007

rose to call attention to the growth in passenger and freight traffic on Britain's railways; and to move for Papers.

My Lords, it gives me great pleasure to introduce this debate on the success of the railways; I feel very honoured to be opening it. It is good that we have only a fairly small, but very expert, number of Members participating. I cannot help but wonder at the lack of Tory Back-Bench interest in the railways. In my capacity as chairman of the Rail Freight Group, which I declare, I was invited to speak at a fringe meeting at the Conservative Party conference in October on how rail freight would fit into a Conservative railway policy. It is difficult to respond before knowing the policy, but I am sure that the noble Earl, Lord Attlee, will tell us today.

It is time to reflect on the success of the railways: 13 years after privatisation—though I probably prefer the word "liberalisation"—it has taken a long time. But let us not remember Railtrack. We were probably the first in Europe to liberalise, and we made some mistakes, but now we should look at the successes. I shall present a few statistics. Passenger traffic is up 43 per cent since liberalisation. The highest number of passengers ever will soon be carried on the UK's railways. Freight is up 60 per cent. Safety is very important. Not only is safety increasing all the time; since privatisation it has increased at a faster rate. The private sector has invested £1.5 billion in freight, and we have the newest passenger fleet in Europe. Network Rail is spending more on investment than on maintenance and operations. I am sure that my noble friend will be pleased to say in reply that government expenditure has reduced from a very high figure and that more goes into investment than into subsidy.

Let us not forget the technical leadership that our railway industry has demonstrated, or the world-class design and construction management, or, alongside it, the financial services and IT which are now recognised around the world. To give a couple of comparisons with our European colleagues, we have the highest gross rate of passengers in Europe and the second most reliable railway after Switzerland. We all know that the Swiss Government spend a great deal more on their railways as a proportion of GDP than we do. For freight, we have the highest gross rate in Europe. Our reliability is such that 80 per cent of arrivals—sometimes 98 per cent—are within half an hour of schedule. Compare that with the intermodal services run by the incumbent railways on the Continent where less than 50 per cent of trains arrive within 30 minutes and 10 per cent do not arrive within 24 hours. And that is probably their most reliable sector.

There is clear evidence that our structure allows full and fair competition above the tracks. The total separation of the infrastructure manager and the operators is the best—probably the only—way to achieve growth and better service quality and to contain government expenditure. That is why, like everyone else in the industry, I was very irritated when we were criticised a year or two ago by the German Government and the German railways. They gave totally inaccurate figures about the disaster that was happening here. Over the years, I hope that we have been able to put it right.

Emissions are a serious problem which we have discussed quite often in your Lordships' House. There is a link between different types of transport and the emissions that they produce. The Government recently put out a response to the Eddington and Stern reports. It is interesting because, of the five sectors of the economy mentioned, transport came out worst. It forecast that by 2020 there will be only a 10 per cent reduction on the 2000 level in transport emissions, which includes air, road and rail, much worse than all the other sectors. ATOC recently produced an interesting report showing that road transport produces double the amount of carbon emissions per kilometre than those produced by passenger rail transport, and air transport produces four times the amount. For freight, rail transport is four times better than road transport, as one would expect. Those are significant figures.

Like many noble Lords, I hope, looking into the future, I would seek to curb some of the short to medium-haul flights that could be transferred to rail. We had a discussion about that yesterday in your Lordships' House, as we have many times before. Journeys of less than four hours' travel time from centre-to-centre—and that covers journeys almost to Glasgow and Edinburgh, to most of the UK, to Paris, Brussels and Cologne, and, in future, to Amsterdam—should be encouraged to be taken by rail. But it appears that the Government do not agree. Paragraph 21 of their response to Eddington says that they are arguing strongly for an emissions trading policy which provides that every extra tonne of carbon resulting from aviation growth above the 2005 level must be matched by a tonne saved somewhere else. In other words, let us go on flying until kingdom come; it can be paid for by road freight, rail freight, rail passengers and cars, because the air sector is so important. It is a very odd policy. Of course there is no alternative for long haul, but I hope that the Government will have a rethink on short haul,.

As for the future, we face getting Network Rail's costs down and creating a 24/7 railway for passengers and freight. It is a very serious problem, as many have said before. Network Rail has been talking about it for many years, but not a great deal is happening. There is still congestion in many places. There is enormous potential for getting more trains on existing tracks before we talk about new ones, a topic which I shall come to. But let us get it right, first, by having the tracks open for customers for more hours.

I was in Belgium on Tuesday at a conference. I heard the chief executive of the Belgian railways infrastructure—Infrabel—say that it has for some years had 24/7 railway operations on all the main routes to Antwerp because the customers wanted it. It is either single-line working or a diversion route, which is its normal practice. Many of us criticise Belgium. It has not had a Government for six months, but its railways seem to be working all right. Two years ago, I visited the Canadian National railway. It managed to change a set of 60 mile-per-hour points in eight hours. It took Network Rail nine days to do so at Wootton Bassett two years ago. Network Rail wants to become a world-class company—I want that for it, too—but it needs to move a bit faster. I trust that Ministers and the regulator will encourage that process.

Our industry forecasts show that the volume of rail freight will more than double by 2030, less than 25 years away. I suspect that passenger organisations will say the same—provided, of course, that there is no change in the economics, tax and duties. But first there has to be the capacity. We have to ask whether the network can cope. We have done an analysis looking at the extra trains that would be required for freight, without changing the passenger trains at all by 2030. I found that there would be a shortage of 190 train paths a day on the west coast main line. That is the sum of both directions. Nearly 200 trains will not be able to operate because there will be a shortage of capacity. I could go through the rest of the network around London but will not; the information is available.

Are the forecasts robust enough, and are we looking at the whole economy and the change in modal split that may occur? I heard this week that Rotterdam, the biggest port in Europe, plans a 10 per cent annual increase in the number of containers going through it for the next 10 years. Because of changes in modal shift, it plans an increase of six times the number of rail freight trains between now and 2020. I do not think that Rotterdam and that part of Europe are much different from the UK. If freight needs to be moved, it will move. It will either go by road or rail in this country. Whether it goes via Rotterdam is a question of port capacity and many other things. On the rail freight side, I am not sure whether the forecast we have produced so far, which the Government largely support, is adequate.

As I mentioned in the debate on the Queen's Speech, is it not time for the Government to look at the consequences of changes in the price of oil? I do not want to go into detail, but if oil prices go up so much that petrol and diesel become very much more expensive, there will be a demand for more public transport because it is relatively cheaper than using a car over long distances. There will be more demand for rail freight and, unless the Government continue to offer tax-free treatment to air passengers, a reduction in air movements too. Are we looking at more than a doubling of the demand for railway traffic over the next 20 to 25 years, or are we looking at three or four times as much? I do not know the answer. But, in his report, even Sir Rod Eddington—who from his previous role in running British Airways is clearly in favour good old air travel—states:

"On the west coast main line corridor, capacity can be boosted by 50 per cent, but if current demand growth continues, very substantial additional capacity will once again be needed by 2024".

That is some 17 years away, and how long does it take to plan a new railway?

Crossrail will probably take 30 years from when it was first talked about to being built. The latest Crossrail opening date is 2017. The first Bill was presented to the House of Commons in 1991 and rejected for reasons that I do not fully understand. I recall talking about the rail link in the 1980s, when working on the Channel Tunnel. The rail link opened this month and what a success it is, but it has taken a great deal of time. Given the forecasts of enormous increases in demand and the time it takes to develop and build new rail infrastructure, I suggest to the Minister that we ought to start looking at these issues now. To that end, it was good to see the planning Bill published yesterday, because it may help us along the way. I need to read the Bill in detail but I am glad to see it.

What has not worked out right yet is the Channel Tunnel, and I am sure that other speakers will want to talk about it. Regardless of whether it comes right, and I hope very much that it does, the railway industry on the Continent is, as I said, expanding fast. There are leasing companies such as Angel and Arriva that are running passenger and freight trains in Germany and other countries, and EWS Railway is bringing much-needed rail competition to France. These companies are operating in markets that are less developed and still strongly protected. My message to my noble friend is this. Can the Government be a bit more proactive in ensuring that our industry and the model it has created is encouraged as they seek to influence the thinking of the European Commission and other member states? I say that because yesterday I was given a copy of one of the many explanatory memoranda on EU documentation to do with new proposals for a freight-orientated network across Europe.

Perhaps I may give one or two examples. One suggestion is that the Commission should define a freight-oriented network. The Government's response is that the Commission should not do this because the network is not owned by the Commission. What they could have said is that we have probably got it right in the UK. We may need a freight-priority network in the future, but in other member states where capacity and its allocation is, frankly, a disaster, it might be a good idea; so let us examine it further. The second example concerns priority for international freight, which is already covered by directive 2001/14/EC. The Government say that they cannot do that because the UK already has route utilisation strategies and that there would likely be significant cost implications for passengers using either domestic or international passenger service routes affected by these proposals. Given the problems of freight on the Continent and the success we have had, could they not be a bit more generous and positive in their responses? I heard at the other end of the building that the Commission is desperate for support from the British Government because it is a bit out on its own and surrounded by railway organisations which are 20 or 30 years out of date and losing traffic.

I conclude by making a plea to my noble friend, first, to help export our success for the benefit of UK business, which could start seriously and comprehensively to get business on the Continent; and, secondly, please to start looking urgently at the options for growth linked with emissions, and see where we end up. I beg to move for Papers.

Photo of The Earl of Mar and Kellie The Earl of Mar and Kellie Spokesperson in the Lords, Transport 3:06, 29 November 2007

My Lords, we must all thank the noble Lord, Lord Berkeley, for the opportunity to debate this subject, which no one can deny is relevant in the dual world of mass passenger transport and logistics transfer. My noble friends are quite enthusiastic about this debate. My noble friend Lord Glasgow will speak about the need for a high-speed line towards Scotland and the need to make long-term plans for such a network. My noble friend Lord Methuen will talk about signalling development and ERTMS, while my noble friend Lord Greaves will discuss, among other things, fares and rolling stock. My noble friend Lord Dykes will consider the Channel Tunnel dimension and about its regulation, particularly for freight—or at least I believe that he is going to speak about that. Last, my noble friend Lord Bradshaw will speak about the price of oil, the need for forward planning and the franchise process, particularly the need for rolling franchises.

As a railway enthusiast for the past 43 years and indeed a consumer of vast amounts of long-distance passenger rail travel, it pleases me enormously that the railway is enjoying a sustained resurgence both for positive reasons—speed, comfort, reliability and ease of boarding, and for negative reasons—road congestion, airport security procedures, carbon emissions and global warming. People need to meet and freight is needed throughout the economies of these islands and elsewhere. The railway is a British invention and needs to be at the forefront of our transport systems. The technology is well understood, yet other countries have overtaken our rail network, due in part to faltering conviction among politicians. Clearly, a railway system can be procured only collectively, so politicians are a key to railway development, or possibly a block to it.

Many minor problems need attention, and these are well known: older passenger rolling stock; lack of passenger rolling stock; lack of car park space; the shift of funding from the Treasury to the fare box, as we read in the newspapers this morning; reliability; lack of freight paths; lack of gauge enhancement, and lack of freight terminals. I was interested to hear the noble Lord, Lord Berkeley, say that reliability in Great Britain is very high, but the perception of unreliability stems from either relatively understandable engineering possessions or the less well-tolerated network congestion. It is a principal complaint of commuters and may well be perceived as a form of fraud. Fortunately, major engineering work on the west coast main line is subsiding, at least in the south, but nevertheless, less than perfect reliability is used as an excuse by those who do not want to get out of their cars, along with, "I don't believe there will be a car parking space for me". What they forgo may well be work or leisure time while driving. This intervention was developed this morning on the 0700 GNER service from Edinburgh down the east coast main line. It may be the last time I put "GNER" into the Official Report. We will now have to get our tongues around "NXEC" in future, or refer to it more easily as the "east coast main line" or "east coast line".

However, the solution to today's problems of a congested network and increasing demand lies in investment. As a start, a new high-speed network is needed. This should be a new dedicated railway linking Birmingham, Manchester and Leeds with Heathrow, St Pancras and the Channel Tunnel. International services should start from what I call the south-north of England and run through to Brussels, Paris and beyond. Services from the real north of England and Scotland would join the high-speed network outside the cities mentioned. Indeed, the existing network would be used to enter Birmingham, Manchester and Leeds for the last few miles.

Once this has been established, a further high-speed network should be planned and invested in. I accept that this is major investment. However, if we are serious about reducing carbon emissions, reducing road congestion, promoting rail-for-air substitution and enabling travel we must do it. The restricted new high-speed two network that I am talking about will produce benefits quickly, enabling confidence to be gained for the extension to the west of England, Wales, the north of England and Scotland. I believe that the real success of such a project will be direct rail services to Europe and not only to London.

On a different topic, the arrival of the much heralded 1,300 new carriages of varying designs must happen soon. It has been announced four times by government and there will be a need for more carriages by the time the 1,300 have arrived. Why are the Government holding back this order? Rising demand requires the seats now.

Why does the Department for Transport insist on saying that it is not in charge of timetabling or the rolling stock cascade? The specification of the franchises is very tightly drawn by the department and leads, for example, to the decision to make everyone on the cross-country network change trains in Birmingham. This was not a franchisee's decision.

Why does not Network Rail want to delegate the running of the track to anyone despite the success of the Merseyrail franchise in doing so? Is Network Rail frightened of being shown up on costs? Will the Government do anything to improve the governance of Network Rail, or are they content with the wide group of stakeholders that make up the governance at present?

The railway is set to do ever more for this island and its various economies. Will it be able to deliver, or will politicians restrict its performance?

Photo of Lord Snape Lord Snape Labour 3:12, 29 November 2007

My Lords, it is always a pleasure to follow the noble Earl. I join him in thanking my noble friend Lord Berkeley for giving us the opportunity to debate the railways today.

I was struck by the optimistic tone of my noble friend's speech, which is long overdue. It is not so much overdue as far as he is concerned—he is always an optimist—but it is about time that we recognised, in your Lordships' House and elsewhere, the enormous contribution that the railways have made, and are making, to the British economy and how much they have improved in recent years. As my noble friend said, they are the most successful in Europe. Yet occasionally, those of us known as the political gricers, who sit through these debates and listen to noble Lords on all sides of the House, might think that the railway industry was on its knees instead of being the success story it is at the present time.

Of course, when things go wrong, people get cross, but more things are going right now than they have been for years. I say that as someone who, in the other place, vigorously opposed from the then Opposition Front Bench the privatisation of the railway industry 13 years ago. I was probably wrong in reflecting the current thinking at that time which was all gloom and doom. But it has not been gloom and doom. It has been remarkably successful, although I do not say it would not have been otherwise.

I see in his place the distinguished former chairman of the Railways Board. I shall come to the question of the financing of the railways and Network Rail in a moment but, while I have the noble Lord's attention, I suspect that if he had been told in his time of the funding he could have for the next five years it would have been a cause for celebration. The great problem in the nationalised railways era was that it was done on a year-to-year basis. Indeed, depending on the economic crisis to strike whichever Chancellor was in No. 11 at that time, it was sometimes on a month-to-month basis. Capital projects were started and then halted—I am thinking particularly of the 1960s and the modernisation of what is now Manchester Piccadilly station, which was a virtual ruin for five years largely because the Government apparently ran out of money and certainly ran out of will. Although there have been some problems about financing over the past five years, certainly the noble Lord and, I suspect, one of his distinguished successors, the late Sir Peter Parker, would have danced with joy—their dancing days may well be over—in those days at the prospect of a proper laid-down five-year plan.

I shall come in a moment to whether the money is sufficient, but we should acknowledge that the Government have done a fair job in producing the White Paper and the associated documents. I return to a point made by my noble friend Lord Berkeley about rail freight. Again, those of us who remember the nationalised railways—and I promise not to bore your Lordships with yet more stories about the signal box windows that I have peered through in the past—will be aware that rail freight, whatever it was called, was always the poor relation of the railways industry. Many of us saw freight virtually melting away before our eyes and disappearing onto the road network. The creation of competition within rail freight, particularly through the efforts of Freightliner Heavy Haul and EWS, now under German ownership, has meant a dramatic increase in the amount of freight carried on our railways.

Again, there is a different attitude among railway managers. Many of the managers I met during my time in the railway industry were very good at their jobs but they were resigned to managing an orderly decline, as it was described to me, of the railway industry. Orderly decline will not do now, and that is not the objective that is being pursued; rather, it is orderly expansion, which for years many of us have called for. I wish that those who profess to love the railways the most could occasionally praise them a little more than they do, particularly the three trade union general secretaries. Railway accidents happen very rarely, but every time one happens one of the general secretaries appears on television speaking as though the railway industry was like the wall of death, and saying that because there has been an accident something is terribly wrong. Of course things go wrong, but the fact that the railways are as safe as they are is a direct result of safety matters being taken so seriously.

All three secretaries are united in demanding the renationalisation of the railways. I speak as a former member of the National Union of Railwaymen. I look at their own membership. At the time of nationalisation in 1948, the NUR had 1 million members. When I retired officially from BR, membership was down to 60,000. I think it is about 80,000 now; the NUR has increased its membership, as have the other two rail unions. Do we as a nation seriously want to go back to the days when senior civil servants acquiesced—or, more often than not, refused permission—to railway managers borrowing money to improve the railway system? Do we really want to go back to when a request for three extra high-speed trains for the then east coast main line could be refused by the Permanent Secretary at the Department of Transport, or whatever it is called these days? Such a policy would not be sensible, and I am glad that we are not doing that.

I turn to the question of financing and to what extent the railways are to be financed in the next control period—number four. There has been considerable debate in the railway publications, two of which I have in front of me. In the editorial column, entitled "Railtalk", of Modern Railways magazine, the question of the funding gap is addressed:

"We put the gap between funding available and the SBP's interpretation of the SoFA at between £3 billion and £5 billion".

I apologise for the acronyms. The SBP is Network Rail's strategic business plan, and the SoFA is not what it might appear: it is the statement of funds available. There is undoubtedly a gap there. Will the Minister address that problem? It is widely acknowledged throughout the rail industry, despite the kind things I have said about a five-year period. The problem is summed up a bit more bluntly in the current issue of Rail magazine:

"Railway needs more cash to meet Kelly targets", says Network Rail. There is undoubtedly a funding gap. What do the Government propose to do about it?

There is another big gap in the White Paper and the associated documents that the Government issued this year. Where is the mention of any further electrification? There is none. Maybe we know something the rest of the world does not. I go to Spain occasionally, and I notice the Spanish are electrifying the line down as far as Malaga. I cannot see a great business case for doing so, but who am I to comment on what someone else is doing? Yet we are apparently unable even to consider the electrification of one of our many main lines. I hear, although I do not know if it is true—perhaps the Minister could comment—that there is a belief at the department of energy that we will return at some unspecified time in the future to $20 a barrel for fuel so we should stick with diesel trains. If that is the case, I have heard some optimistic forecasts from governments of both political hues over the years but that is probably the most optimistic I have ever heard.

Are we really going to be dependent on expensive fossil fuels rather than having a proper long-term programme of electrification? The latter has virtually been ruled out. The same issue of Rail magazine, under the headline, "Minister rejects more electrification", says:

"Rail Minister Tom Harris has ruled out further electrification schemes for the time being. He spelt out his vision for the railways"— it is not much of a vision if there are no sparks there, but that is another matter—

"at the Sustainable Future conference in London on October 31".

That is another example of Scottish Ministers irritating the rest of us madly: the Minister tells the English we cannot have the benefits of electrification, yet almost in the same week the Scottish Parliament announces the further electrification of the Edinburgh-Glasgow line. He will be fine in his home country riding up and down on an electrified railway, but he will not let the English enjoy such benefits. That is the sort of irritating anomaly that those of us who care about the railway industry are anxious to do something about.

I return to rail freight. The Road Haulage Association, greedy as ever, is now demanding 84-tonne lorries on the nation's roads. I understand that the department is considering a trial of these juggernauts on our roads. They are road trains, and would do even more damage than the current crop of heavy goods vehicles do at present. The Germans, despite having thousands of miles of autobahn compared with our relatively few miles of motorway, have already refused such a trial in their country. The Department for Transport has done some daft things over the years, but I cannot believe that it is really going to allow 84-tonne lorries on to our roads. As well as the damage that would be caused to our road network, long-distance rail freight would immediately be undermined because someone else would pay the true track cost, as someone else does now. Despite the bully-boys of the Road Haulage Association threatening yet another blockade of our fuel stations, the two major inquiries into heavy goods vehicles during my political lifetime have both concluded that such vehicles do not pay their full track cost. Indeed, they have an 11 per cent price advantage after 10 years of a Labour Government compared to that which applied in 1997. I hope that the Minister will reject such a trial out of hand and that he will look again at the funding gap to which I referred earlier.

Photo of The Earl of Glasgow The Earl of Glasgow Liberal Democrat 3:24, 29 November 2007

My Lords, it is surely self-evident by now that the railways are the only long-term solution to our transport problems. According to all forecasts, we can expect an ever-increasing demand for rail travel and a rise in the population in Britain.

Surely we do no want further to ruin the British landscape by building more motorways or dual carriageways, except in exceptional circumstances. If we are serious about the threat of global warming, we must cut down the number of cars and lorries on our roads. For the same reason, we must limit air travel, particularly within the United Kingdom.

What other means of travel are we left with? Buses have to compete with the rest of the traffic on our overcrowded roads, so they can never be reliable, and are unlikely ever to be comfortable unless they are half-empty. Moreover, they are hardly carbon- emission free.

Bicycling makes sense in towns and cities if you are prepared to take your life in your own hands and if it is not raining, but is not much use if you are planning to travel from London to Manchester for a business meeting. You could perhaps do that on a motorbike, but motorbikes, like buses, can hardly claim to be a clean and environmentally friendly mode of travel. Unless someone comes up with a completely new method of travelling in the next 10 years, railways are the only answer.

Network Rail already claims the railways to be the most reliable form of travel. It is only recently that that can be said. It claims them also to be the safest, though aeroplane operators might contest that. It claims them to be the most efficient. That is certainly controversial. They should be the most comfortable and civilised form of travel, but they cannot claim to be that unless every passenger can be certain of a seat.

However, as many noble Lords have already said, passenger travel has grown by 40 per cent in the past few years and rail freight by 60 per cent. Do not let the Conservatives tell you that that is a result of privatisation; it is because the roads have become intolerably congested and parking is nearly impossible. It appears that the Government are committed to spending hundreds of millions of pounds during the next few years on upgrading the existing network. Network Rail, we hear, is going improve security at stations, lengthen platforms and release pressure on bottleneck stations such as Reading and Birmingham New Street, and train operators are going to introduce longer trains and provide improved facilities. All this sounds like good news, and it is welcome, but I would like the Minister's assurance that it is really going to happen. Even if it is, the Government and Network Rail are doing no more than attempting to keep up with demands as they perceive them. They are not attempting to get ahead of demand. With the exception of improvements to Thameslink and the belated go-ahead for Crossrail, there are no plans to build any more railway lines, high-speed or otherwise, or, as far as I know, to reopen old ones.

The Government do not seem to have any co-ordinated transport plan for the future. How are we going to travel from one part of the country to the other in, let us say, 2020? The Government say that they do not want to commit themselves to any long-term investment, because circumstances may have changed by 2014, when they propose next to consider it. However, you do not have to be Nostradamus or the Delphic oracle to foresee that, in times of greater restraints on carbon-emitting forms of transport, the relatively clean option of the railways is the only way forward.

The Government must start to plan new railways now, the most obvious being the high-speed line from Scotland to London that links into the existing line to the Channel Tunnel. More than any other project, that would greatly reduce the necessity for so many polluting internal flights.

I imagine that the Government's reluctance to commit to a larger rail network for the future is due primarily to cost, yet surely the planning and budgeting for proposed new lines do not cost too much. However, as far as I know, they are not planning to go ahead even with that.

It seems likely that much of the money for funding future railways will have to come from green taxes on road users and plane operators. That does not seem to be a vote-winner for any Government. All Governments suffer from short-termism. They will get no credit now, and certainly no extra votes, for providing the country with an excellent rail service in 2025. Perhaps future planning for transport should be taken out of the Government's hands altogether and made the responsibility of some all-party executive whose members will be young enough still to be sitting there in 25 years' time. But that is just a thought.

In another sense, cost is a very real concern to those of us who believe in the future of the railways. Travelling by train is already too expensive and if newspaper reports are anything to go by the price is about to go up again. How can we hope to wean motorists away from their cars and businesses away from their lorries if the alternative mode of transport is actually more expensive? I disagree with the noble Lord, Lord Berkeley, although I thank him for allowing us to speak on this subject; I have always been opposed to the privatisation of the railways, partly because higher costs for travel is one of the inevitable consequences. How on earth anybody could believe that privatisation could make rail travel cheaper is a mystery to me. The only way in which to keep prices under control is by government subsidy, and there will never be a chance of that under a Conservative Government. My only hope is that this Government might use the regulator to control this danger. I should like to know whether the Minister is seriously considering that.

I have always believed that the railways should primarily be a service managed by a competent businessman, not a business that only incidentally provides a service. As time goes by, this distinction will seem more and more important.

Photo of Lord Faulkner of Worcester Lord Faulkner of Worcester Deputy Chairman of Committees 3:31, 29 November 2007

My Lords, I too congratulate my noble friend Lord Berkeley on securing this debate. It would be churlish of me not to commend the Liberal Democrats on the ingenious way in which they have carved the debate up into bite-sized chunks. We look forward to the later contributions from those Benches in the afternoon.

I have no financial interests to declare although, as the House may be aware, I chair the Railway Heritage Committee, I am a vice president of the Campaign for Better Transport, which your lordships may know better by its old title of Transport 2000, and president of the Cotswold Line Promotion Group. Like my noble friend Lord Snape, I have spent the whole of my adult life campaigning for a better understanding and a fairer deal for our country's railways and, like him, there were times in the 1970s, 1980s and 1990s when I almost despaired, under successive Governments, for their future. The emphasis always seemed to be on contraction, cost-cutting, and closures. Indeed, I remember that when a senior official from the Department of Transport arrived as a new board member on the British Railways Board, he announced that he was there at the Minister's behest to preside over the orderly rundown of the railways. That was the mood of the time.

Most of today's problems of overcrowding and lack of capacity stem directly from the short-sighted decisions taken at successive Governments' in the past 40 years, including many closures following the Beeching report and the singling of long sections of double-track main line railway, such as that from Salisbury to Exeter and the Cotswold line between Oxford and Worcester. However, at least we were able to prevent the implementation of the lunacy contained in the Serpell report, which would have left the nation's railway network looking a bit like that of Argentina, with closed routes and rusted lines more or less everywhere.

How different it all looks today. For the first time that I can remember, we have a government White Paper that explicitly rules out all passenger line closures, and the discussion has moved on to how we provide for growth and not look at ways in which we choke it off by cutting services. As we have heard from my noble friends, the railway's problems now are problems of success. We now run 19,700 trains each day, which is 20 per cent more than 10 years ago, and more than any other European country except Germany. Those trains carry over 3 million people each day, which is more than at any time since 1946, when the network was almost twice as large. Demand is growing at over 6 per cent a year, which is the fastest growing demand in Europe. The latest interim report from Network Rail shows that things are getting better in terms of punctuality. There was a long way to go there, but improvements have occurred. The punctuality figure of 90.87 per cent for the past six months is the highest for nine years.

In recent days, the most stunning success in the railway has been the opening of the new St Pancras Eurostar station and the completion of High Speed One, the Channel Tunnel rail link; all of it on time and on budget. I was particularly pleased that the noble Lord, Lord Heseltine, and John Prescott MP belatedly got the recognition that they deserve for their part in delivering that project.

Less publicised and less recognised has been what has been happening on the west coast main line—a source of much irritation to your Lordships, certainly in the years that I have been in this House. The west coast main line modernisation is not yet complete. It will have cost far more than originally envisaged, but at least Virgin Trains is now able to demonstrate improvements in punctuality and service quality, with the promise of three trains off-peak an hour to Manchester and Birmingham. Picking up a point made by my noble friend Lord Berkeley, there is also a possibility that we may get close at last to a seven-day-a-week railway and an end to lengthy diversions and bus substitutions at weekends.

Virgin will just about be able to cope with that within the new Virgin high-frequency timetable, but there will be no spare capacity after 2012 unless the Government are prepared to allow Virgin to add two extra coaches to each train. To have those coaches in place by 2012, the order will have to be placed now and I hope that when my noble friend replies to this debate he will be able to offer some words of encouragement on that score.

Looking further ahead, I see that the Department for Transport already appears to accept that the London-Birmingham-Manchester corridor will be completely saturated by 2024. I am delighted that a number of speakers have referred to plans for a new high-speed line from London to the North of England and on to Scotland. I sit on an advisory board called Greengauge 21 as an honorary member. Until recently, one of our members was my noble friend Lord Jones of Birmingham, but he sadly had to depart when he joined the Government. It is a worthwhile project and I am pleased that it is getting support from your Lordships in this debate, because it will take the opportunity to take all long-distance travel off the existing network, which will be freed up for local traffic, commuting and freight. We are talking about a new railway built to a specification similar to that of the Channel Tunnel high-speed line, with all the advantages of links and interchanges to the conventional railway that can be achieved.

In the short term, a lot can be done to improve services, increase capacity and satisfy rising demand. One is to give Network Rail every encouragement to reinstate some double track on lines that were single 30 years ago—the sort of routes that I mentioned a moment ago, particularly on the old western region and in the south. Another is to embark on a programme of reopenings in England such as the east-west line from Cambridge to Oxford and that down to the south coast from Uckfield to Lewes. Much more is happening in Scotland and Wales in terms of line reinstatement and reopening than in England and we should give full marks to the devolved Administrations in those two countries for recognising the potential of rail.

I warmly welcome the commitment contained in the gracious Speech to proceed with Crossrail. It is an excellent scheme and it is a pity that it has taken so long to come to fruition. I hope that when noble Lords come to examine the Bill in Committee they will look very carefully at the proposed western terminus. Maidenhead is not the logical location for that. The obvious solution is to ensure that, when Network Rail spends its promised £455 million on enhancements at Reading, Crossrail platforms are incorporated into that station as part of that scheme.

Then there is the case for electrification referred to by my noble friend. I hope that the Government take seriously a letter that was sent to them recently by Iain Coucher of Network Rail and Adrian Shooter, the ATOC chairman. I do not have time today to restate all the arguments that they use, but they are absolutely right to question the assumptions contained in the Energy White Paper. I quote one section from the letter:

"Today we have absolutely no idea about the source of energy in the future. We can immunise the railway from changing fuels (and indeed the cost of new fuels) by an electrification programme that puts those decisions elsewhere. For example, it seems extraordinarily incautious to be spending millions of pounds equipping a railway to run on one type of fossil fuel ... only to find we—as an industry—have bet on the wrong fuel type".

I would like to see a commitment to electrify all our main lines eventually but I appreciate that is likely to be some way off. In the first instance we should be starting on a programme of infill electrification to link existing electrified routes and to provide extra capacity through the high acceleration electrification gives us. This should include lines such as Leeds to York, Liverpool to Manchester and from Bedford to Kettering and on to Leicester.

I cannot conclude my speech without saying a word about air travel. This is not an occasion for a debate about the wisdom of airport expansion in the south-east of England, although my noble friend will know that I intend to continue to oppose the third runway at Heathrow as strongly as I can, up to the point where I hope that the decision can be reversed. I would, though, like to draw your Lordships' attention to a ruling by the Advertising Standards Authority on a complaint made by me about misleading advertising by Flybe, one of the low-cost airlines which seems to delight in knocking the railways. I complained about three statements made by Flybe, which included a claim that rail fares were,

"set to soar 30 per cent", and that its air fares were cheaper than the train. My complaint was upheld by the ASA in every respect. It said that Flybe's ads breached the ASA code in six different ways, covering truthfulness, substantiation and comparison. I hope that it has taken notice of that.

Already, an increasing number of your Lordships who travel down here from Scotland prefer the train to flying, and I have no doubt that more will follow their example as the reliability of the west coast line continues to improve. I hope that those who continue to fly will take account of air quality and climate change issues too. They should remember that the CO2 output per passenger kilometre on a rail journey from London to Edinburgh is 11.9; and that for an equivalent air journey is 96.4.

The renaissance of the railway in recent years has been remarkable and astonishing, and I pay tribute to the thousands of men and women who work as members of the railway community in our country. They are generally unappreciated, often abused and yet set the highest standards of public service. I remember warning back in the 1970s that if the country were foolish enough to imagine that it could do without its railway, it would come bitterly to regret it in 20 or 30 years' time. The fact that today's debate is about expansion, not contraction, shows just how far we have travelled in our appreciation of how vital the railway is.

Photo of Lord Methuen Lord Methuen Liberal Democrat 3:42, 29 November 2007

My Lords, I welcome this debate drawing attention to the growth in passenger and freight traffic, and I look forward to hearing more about the Government's paper, Delivering aSustainable Railway.

I am particularly interested in the proposed infrastructure changes at Reading and Birmingham. It is interesting to note that the proposals for Reading station will not be the first major reconfiguration of that station. The original Brunel station was built with a single long platform for both up and down trains—a layout which survives to this day at Cambridge. It did not take long for the Great Western Railway to find out what an operational inconvenience this was, and to rebuild the station to approximately what it is today. It is now time for further development to provide yet more capacity.

I must express my disappointment that in connection with the now almost certain advent of the Crossrail scheme, there is no sign of any intention to electrify that part of the Great Western lines, as stated by the noble Lord, Lord Snape. I would have thought that Crossrail should merely be a precursor for a scheme similar to Thameslink, providing a through electrified service from at least Newbury, Swindon and Oxford, with a longer term goal of going even further west to Bristol and north-west to Birmingham and using Crossrail continuing east to Ipswich and Colchester.

Last week, as a member of the Institution of Railway Signal Engineers, I had the benefit of attending a day-long seminar on ERTMS, the European Rail Traffic Management System, and ETCS, the European Train Control System. It was very well attended by some 200 people. The keynote speech was by a senior member of the Department for Transport. ERTMS has, since its inception in the 1980s, been the panacea for the European railway industry's problems.

The original idea was to provide the international train driver with a uniform presentation of information as to how to drive his train, irrespective of the signalling style of the country in which he found himself. Not only that but—due to the multiplicity of track-to-train communication systems, every European country having its own special non-compatible brand—an ERTMS-equipped train should need but one set of equipment.

ERTMS will provide interoperability, increased safety and, due to its moving block concept, increased traffic capacity—the answer to everyone's prayers. The main problem up to now has been cost. In spite of that, a number of schemes are being implemented in Europe, and at last year's railway signalling convention in Interlaken we were taken for a run on the Swiss SBB ERTMS train—so it actually works. As a passenger on the train, one was not aware that there was anything special about it, but we were shown the type of display the driver saw, which is what is significant for the operation. One of the problems of systems involving many manufacturers and different operating regimes is to ensure that everybody operates to the same standards and change level and does not go off and do their own thing, which has been common in the past. It has cost the Netherlands railways €30 million to overcome a problem due to the change in standard levels.

In the UK, our first ERTMS system is being installed on the Cambrian lines between Shrewsbury, Aberystwyth and Pwllheli. I will comment on some operator concerns about that later. ERTMS costs in the UK have up to now been too high, with the payback period being too long. A critical re-examination, the "red diamond challenge", has recently taken place to establish a business case for ERTMS. As a result, a national implementation plan has been established, running to 2044. The breakthrough is to co-ordinate the implementation of ERTMS with the phased replacement and rollout of life-expired existing railway signalling systems and rolling stock, rather than superimposing ERTMS on the existing installations. That way, costs are minimised as less equipment should be needed on the ground, and the business case can be made.

One benefit of ERTMS is expected to be increased track capacity, due to the provision of moving block capability. I am not convinced that that will be achieved in practice on a route handling a mixture of fast express trains, suburban services and freight. Another fact is that the system relies on GPS to provide train position. That is unlikely to be sufficiently precise in densely tracked areas such as London terminals, so it is likely that conventional track circuits will still have to be used in such areas, again reducing the cost benefits.

I would like to comment on the practicalities of implementing ERTMS, as presented to the IRSE's seminar by an operational staff member who has to make it happen. He said:

"ERTMS is not a technical project, but predominantly an operational one".

That organisation, which has the Cambrian franchise, is not geared up to undertake a major project of this nature as part of the day-to-day job. He has to design, install and maintain a whole new set of signalling equipment on a train that was not built for it, which may result in loss of passenger accommodation to accommodate an equipment cubicle. He has to train drivers, gain safety approvals, maintain the service and manage the costs. There are a lot of practical questions. Where do you put the kit? Is there an adequate electrical supply on the train? What is the effect on traffic of releasing trains from a limited fleet for modification? Who pays for new driving techniques and new operating rules, and so on?

Such problems will occur just as much on the other major routes when ERTMS is rolled out nationwide over the next 40 years. The various ROSCO and ATOC contracts will need to take account of those considerations. ERTMS will take time to establish itself; I hope that it will be worth the wait.

Finally, when will something be done about the dreadful and disgraceful state of Derby station? It has been falling down for a very long time.

Photo of Lord Greaves Lord Greaves Spokesperson in the Lords, Environment, Food & Rural Affairs, Spokesperson in the Lords (Planning), Department for Communities and Local Government 3:50, 29 November 2007

My Lords, I, too, thank the noble Lord, Lord Berkeley, for introducing this debate. The noble Lord spoke eloquently of the success and growth that permeate much of the railway in this country. I want to talk about some problems, as other noble Lords have done, but we should not let the problems that exist detract from the fact that there is a real success story at the moment. My noble friend Lord Mar and Kellie said that he had been a train enthusiast for 43 years. I thought; only 43 years! What it is to still have the joys of youth.

I want to talk about some aspects of the north of England. A lot of the growth that has taken place and a lot of the proposed investment as the Government and the industry chase that growth have occurred and are occurring in the south of England, particularly the south-east of England and, as other noble Lords have said, in Scotland, where a different political system has produced a more ambitious approach to rail openings. Not everything in the north of England is gloom by all means. The services to London are now incredible and would have been unimaginable in the days when I used to stand as a train-spotter at Wakefield station. Northern Rail took over a very difficult franchise that was thought to be a basket case and went through an inquiry which many people thought was going to result in a lot of service reductions. However, Northern Rail is really doing quite a good job. The growth in traffic that is taking place in the north of England is a credit to it, as is the improvement in services and reliability. The new TransPennine franchise, against the expectations of many of us, is turning into quite a success, with the fancy new class 185 trains.

Nevertheless, there are still many examples of lack of a joined-up railway and a lack of connectivity, as people might say, partly due to the continued fragmentation of operational services and partly due to the dismantling of large amounts of the railway that took place in the 1960s and progressively in little ways for the 30 years afterwards. I will not talk about the need for a high-speed railway to the north of England; other noble Lords have mentioned that. The two glaring examples where electrification is needed in the north are strategic lines; the Leeds to York line and the Manchester to Preston line, which are an integral part of the east coast and west coast operations—and they could be far more so if they were electrified, not least as diverting lines. We can dream and look ahead to the future to the electrification of the Settle and Carlisle and what that could do. Not very long ago, we were all campaigning to stop people closing that line down.

On a much more local level, here is an example of a lack of common sense in the operation of services. I often get the 20.30 from Kings Cross to Leeds when I am going home. That has an advertised connection at Wakefield Westgate with the last train to Huddersfield. Time and again, passengers are advised to stay on the Leeds train and take a much longer journey to Leeds, because the Leeds trains are a few minutes late and the Huddersfield train is going to leave on time from the other platform across the station bridge. People sit on the train watching the Huddersfield train set off while they are still on the Leeds train. This last week, people were advised to stay on the Leeds train, and a few enterprising people got out, raced across the bridge and got on the Huddersfield train. Others were sitting watching them do that. It is crackers. It is all to do with the fact that they are under different ownership and because there are tight targets on punctuality. It is the last train at night; that train is not going to hold anything else up. It is just about a lack of common sense in providing the good service that could be provided.

I give another example. On Monday this week, my daughter went to Colne station for the Preston train, on her way to work in Manchester. It should have left at just after seven o'clock, but it did not arrive. There were no indications or announcements on the Tannoy to say that it was not going to arrive. There were 20 passengers waiting at Colne to go to work who had to wait an hour for the next train, because it is only an hourly service. Why? It was because the train had been late getting to the section of line between Gannow junction and Burnley and Colne, an 11-mile single-track siding. Once a train is on it, no other train can get on it for the best part of an hour, so the trains are turned around early. It is madness. How on earth can you persuade people to take the train regularly and not find other ways of travel when that happens more often than it ought to? It seems to happen about once a month. The answer is to reinstate the passing loop at Nelson, where there is an island platform and where, even after they "singled" the whole line from Gannow junction, there used to be a passing loop. It is common sense that that should be reinstated to allow a proper, flexible and reliable service. Otherwise, how on earth do you expect people to use that line to go to work?

Those are just examples of joining up missing links on a very small scale. For the rest of my time, I want to talk about the railway line between Colne and Skipton. Of course, it is not a railway line, because it does not exist. It is a missing link. It was closed down in 1970. Since 2001, when the campaign group SELRAP, the Skipton East Lancashire Railway Action Partnership, was formed, it has had tremendous success; indeed, a number of noble Lords in this Chamber have signed up to the campaign. Some 10 years ago, pretty well everyone thought that the line was a lost cause. It is now being looked at as a serious proposition. If anyone wants to know more, they can Google SELRAP and will find a most impressive website.

It is topical today, because tomorrow in Skipton there will be the official launch of a SELRAP study, commissioned from independent consultants JMP Consulting, into the business case for reopening the railway line. If people tell me that reopening railway lines is not a possibility and a hopeless dream, I merely produce in evidence my noble friend Lord Mar and Kellie, who will wax lyrical, when asked, about the reopening of the line to Alloa, with which he has had something to do. We are talking about increasing patronage of railways by passengers. SELRAP has made its own small contribution to this. On 1 April this year, a special train called the Missing Link was commissioned by SELRAP to travel from Colne to Skipton. It had to go a long way around and took five hours. It was the subject of a cartoon in the local newspaper, the Colne Times, showing a drawing of a train at Skipton station with the following caption:

"We apologise for the 37-year delay to the Colne train. This was caused by vandals removing 11 miles of track".

I hope that I live long enough to see the service reinstated.

The 70-page report is embargoed until tomorrow, but I have permission from SELRAP to tell noble Lords a little bit about it today. The study was carried out at the suggestion of the Department for Transport and Network Rail, which told the campaigners that if they wanted to have their case taken seriously, they had to produce a business case and feed into the Lancashire and Cumbria Route Utilisation Strategy, which is being prepared and is due to be published next year. It would provide a missing link between central Lancashire—which the Government think is a city region—and the Leeds city region. It would provide Pennine Lancashire—towns such as Blackburn, Accrington, Burnley, Nelson and Colne—with a link to better rail services to the west to Manchester and to Leeds and Bradford. It would also increase overall trans-Pennine rail capacity. The Northern Way, an organisation which the Government tell us is leading the way in the north of England, has put forward the concept of a Pennine or north of England Crossrail. The idea arises from the need to increase the capacity and amount of trans-Pennine, east-to-west rail traffic in the north of England.

Many of the Government's policies on railways seem to be based on what, in road terms, has been discredited as "predict and provide". Clearly, if there is increasing rail traffic in some areas, you have to provide for it, but there is also a need to use investment in railways as part of regenerating areas. The regeneration of East Lancashire—in housing terms, the Elevate area, now branded as Pennine Lancashire—is absolutely crucial. Reinstating the Colne to Skipton rail service can play a real part in the regeneration of the old Pennine Lancashire textile towns. According to the study, the cost is between £43 million and £81 million, but the cost-benefit analysis suggests that there is real potential. The study mentions a positive cost-benefit ratio for single track reinstatement with potential for a positive cost-benefit ratio on a double track, wider economic and social benefits for employment, new businesses, visitors to the region and to the Yorkshire Dales, and a positive environmental impact with a net reduction of greenhouse gas emissions. I commend the report to the Government and to all your Lordships who are interested in these matters, and we look forward to its launch tomorrow.

Photo of Lord Dykes Lord Dykes Spokesperson in the Lords (Europe), Foreign & Commonwealth Affairs, Spokesperson in the Lords (Cap Reform), Environment, Food & Rural Affairs 4:01, 29 November 2007

My Lords, the principal difference between my humble contribution to this debate and those of the previous speakers is that they all know a great deal about the railways in seriously profound detail and I sometimes pretend to know a little about it.

There is also an emotional content to what I have to say, forced on me compulsorily by my very close friendship with the late Robert Adley MP in the other place. He became one of the most famous pro-railway characters in British political society as a result of his noble campaigns and very interesting visits to foreign railway systems, including in China, where I was the humble PPS and equipment carrier. He, the artiste, took dramatic photographs of wonderful locomotives and train sheds and so on, and I was lumbered with carrying the heavy equipment. None the less, it was a privilege. In those days, a tiny number of Conservative MPs were pro-railway in a practical as well as an emotional sense and they wanted to see it succeed. Like me—I was a Conservative MP then as well—they were horrified at the details of the Government's railway privatisation scheme. I agree with the remarks of my noble friend Lord Glasgow, who said that he regretted that privatisation ever occurred.

I remember those days very vividly but shall reminisce only briefly because it was a long time ago. I remember how shocked people were to see the plundering of state assets that went on with these schemes for railway privatisation. New companies were launched together with the original infrastructure company, and company ownership and control changed hands several times. There were a number of examples of that, of which the Great Western Railway was just one. Although I shall not say who it was, just by chance I happened to know a non-executive director of the board of the first company that was then sold on to another buyer. He said, "I know nothing about railways at all but have just made £850,000 clear profit as a result of this transaction".

Then there were the leasing companies that suddenly sprang up. They made enormous supernormal profits from an artificial situation involving state assets. The taxpayers wrote off all the debts to ensure that they were in a perfectly good, pure and pristine state for flotation and issue, and they were then released on to the market. South American politicians were heard to comment in various countries, "Gosh. I wish we could still do that kind of thing in South American countries like we used to in the old days, but fancy the British doing it!". Therefore, the country that invented railways went through a very sad and sombre time, with City-oriented plundering of assets for private gain. To be fair to the eccentric thinkers who sat in boxes with people pushing food through twice a day asking, "How are you getting on with that scheme for railway privatisation, Cedric?", they were producing a slightly dotty scheme, to say the least, for separating the infrastructure company from the train services as a way of bringing about the tension of competition and therefore cost-reduction pressures on the assets coming from the interlinking of these activities. It was all theory, written by Friedman and others in a sort of miasma of nightmarish ideas of right-wing economic theory rather than practice. It was a horrible initial period that lasted for many years; it took years for new trains to come along. Before ceasing to be a Conservative MP in 1997—

Photo of Lord Graham of Edmonton Lord Graham of Edmonton Labour

My Lords, I am interested in the noble Lord's horror story, but is it not a fact that he was a Member in another place and a supporter of the Government who put that hotchpotch through?

Photo of Lord Dykes Lord Dykes Spokesperson in the Lords (Europe), Foreign & Commonwealth Affairs, Spokesperson in the Lords (Cap Reform), Environment, Food & Rural Affairs

My Lords, I am on the record with a small number of other colleagues who proposed a series of amendments to try to mitigate the effects of the legislation. The pressure is very great on Members because of the Whip system, but the most important amendment that we tabled was to allow British Rail to carry on as an entity and main, principal franchise applicant. We had no chance because no one else would support the amendment of a small group of colleagues, of which I was one. British Rail would have been able to apply and presumably get a number of the franchises successfully, which would have mitigated the disastrous effects of that initial period.

Later on, just before I ceased to be a Conservative MP, I remember pleading with a number of Opposition spokesmen who dealt with transport matters in the other place to try to reverse the policy as soon as possible when taking over. Tellingly, they all refused to do anything of the kind as ultimately it would have been that great department of state—the Treasury—that would determine the amount of money needed to bail out bona fide shareholders in these companies, and all the rest of it, which would have been far too expensive. I foolishly and naively had a session on a plane to Hong Kong with the then shadow Chief Secretary to the Treasury who wisely refused to listen to my blandishments. He was a shadow Treasury spokesman who became Chief Secretary later on.

Rightly too, as the Government—accidentally, I suppose—have a success story in one or two aspects. What has happened to the railways is a genuine, real success story, which to some extent is chance but also because of the Government's actions since then. I commend the Labour Party in government since 1997 for the wise way in which the Government said that they would think about the matter long term to see what happened. I know that they had an emergency to deal with when they had to replace the old infrastructure company with Network Rail. That was a genuine emergency, and they rightly nationalised it. I was pleased about that; at least it was partial deprivatisation.

They took on the rest of the issues and gradually new trains came along. I suppose that subsidies are beginning to taper off now, although they got larger in the initial period after the plundering and flotations of those artificially constructed companies, which City investors loved to the utmost degree, as did their international friends, in buying the assets of these new companies. The situation has improved over a long period with a lot of patience from the Government, which is why they should be commended. The Minister deserves the same plaudits as his other colleagues in that the Government have patiently and gradually persuaded the companies to improve their management, including all the technical people who run the railways—those in between the senior managers and the strategic board—the people lower down who do the physical day-to-day work.

I do not think that the subsidy system will ever be satisfactory, as my noble friend said. Indeed, railways have to have financial input to some extent to succeed. That is the pattern everywhere. If you do not do it, as in the United States, you have a truncated, limited system of a few long-distance services, and then the dense network in the north-east around New York city.

We have to think about the future. I believe that the public want to travel more by train than by car. Even if they own their car—there is a psychological need for ownership—they recognise the need to restrict its use both in urban and intercity settings. That is the great example that we have, and there is an opportunity to do something.

I agree with all the remarks that have been made hitherto by noble Lords. I am proud that six of the 12 speakers today are members of the Liberal Democrat Party. I hope that the public will notice that we are primordial in the promotion of a modern railway system. The UK system has the capacity to be extremely effective, but we are in the difficult intermediate stage of horrendously overcrowded trains that are still putting people off and causing lots of grumbling. There are overloaded platforms; the one at Banbury Station was a telling example from the chief executive in his statement a few days ago. As the Government are once again part-owners of the total entity through renationalisation, which I am glad about, they have a strong obligation with the rail regulator to try to get this right in the long-term, at long last. They must make this country, the inventor of trains, the great leading train country of Europe again.

I was grateful to attend the opening of High Speed 1 the other day; it was a great occasion. I took the opportunity of speaking to a number of French executives and businesspeople who have been involved in many of the subsidiary construction activities, both of the station and the high-speed trains. What a pity that the Hitachi locomotive could not have been British-made, but at least it was substantially made in Britain despite being originally a Japanese model. The French executives paid tribute to the work done in the creation of this modern railway system.

The nightmare period is over and we can think about the future. I conclude with one or two brief points about that. We now have 110 kilometres of high-speed line; France has 7,000 with another 2,000 already on the stocks ready to come through. The dense high-speed networks of the European countries which we have seen recently in Spain, Germany, France, Belgium and Italy—now with trains coming from the east of France—and so on, are all linking up together into a Europe-wide network. We have got High Speed 1 just in time to play a part in that, but we must have a high-speed line going up as far north as possible in the United Kingdom to make that total network logical. It will presumably gradually go up even into the Scandinavian countries; although their trains are very modern anyway, so maybe they do not need it. That is therefore an obligation upon the Government.

Finally, I refer to the Bill now coming through from the other place. I am grateful to my noble friend Lord Mar and Kellie for telling me what I was going to talk about today, so I have left this to the end. Clause 2 of the Channel Tunnel Rail Link (Supplementary Provisions) Bill is about the rail regulator's function, under an amendment, for the Channel Tunnel rail link. Importantly, will the Minister today make a point of assuring us that this does not mean any reduction in the competitive free-access system which we believe in for all these, and future high-speed, lines; and that both foreign and British applicants will be able to play a full part in these matters, including, of course, freight through high-speed lines into the Channel Tunnel? Now that the Channel Tunnel company mark two has been reformed so successfully by Jacques Gounon, the French chairman, there will be freight on freight trucks as well as lorries on freight-carrying coaches, as in the present Channel Tunnel system. Those are important matters. We need reassurance on Clause 2, because some people are worried about its implications unless the Government react accordingly.

Photo of Lord Bradshaw Lord Bradshaw Spokesperson in the Lords, Transport 4:13, 29 November 2007

My Lords, I am not a railway enthusiast. Like the noble Lord, Lord Snape, I simply laboured at the mill in trying to run the system, as we both did also in the bus industry. One of the most important things we can focus on today is oil prices; I mentioned it in my question to the Minister yesterday. What oil price scenario is built into the planning of the airports and the railway? If people are thinking of $20 a barrel, I can tell them that they are in cloud-cuckoo land. I am still convinced that by 2035, if not sooner, it will cost £4 a litre to put petrol or diesel into a car or lorry.

The world is short of oil, demand is going up and people are increasingly willing to use oil as a political weapon to get their own way. The House needs a real explanation of the basis on which the Government are building models through which they can condemn possible expansions of the railway and justify the expansion of Heathrow. The Minister was not present last Tuesday at the Second Reading of the Climate Change Bill, but the scenarios that were painted by a number of noble Lords, particularly by the noble Lord, Lord Puttnam, were quite frightening, and the only way that we can confidently predict providing a railway service is if it is electrically driven because electricity can be got from all sorts of power sources. I believe that it will come from nuclear power, which will give a firm basis for our economy. It almost ranks as one of the essential elements in the defence of our national life because if the oil is turned off a lot of problems will arise. We must plan for that fairly early because even if the Minister, in a fit of generosity, were to get up today and say that we will go ahead with some electrification and with the high-speed line—which I do not expect—we shall wait years before we have the locomotives and the track, get through the planning processes and weather the protests that we shall, no doubt, have on the way.

Can the Minister give us some justification for the fare rises that are taking place? The people who get franchises seem to have extracted from them promises that can only lead to fares going up. There is nothing else they can do. If they want the franchise, they have to agree to increase the fares. The Government may like to shelter behind the fact that it is the private companies that put up the fares, but the decisions behind that are all made in Marsham Street or in the Treasury.

The franchising process is one of the products of the system that the noble Lord, Lord Dykes, so rightly condemned. It is a very good system for keeping lots of consultants in work and for employing lots of civil servants at the Department for Transport and it is well subscribed to by paint manufacturers because often the only new thing on a train is the coat of paint and otherwise it is the same service as before. Why can we not have a franchising process that is longer, demands that the franchisee invests money— because that is presumably what the Government are most short of—and contains a clause whereby if somebody does a good job they can put that towards their franchise bid? The people who used to run Midland Mainline recently lost their franchise, but it was voted the best railway company in the country. It is ironic and ridiculous that the system should be so. It is not beyond the wit of man to invent a franchising process that gets lots of investment, steadily improves performance and serves the country far better than the crazy system designed by OPRAF in the run-up to privatisation. The Government need to be taken to task because they have not got their mind around this major problem. I am quite happy for people who do not live up to their promises to lose their franchise and to do so quickly, but if somebody is doing a good job and is investing money, I cannot see that the public interest is in any way served by terminating the franchise.

One of my noble friends mentioned that we have been told four times that we will get 1,300 new carriages. It may be that we will hear that a few more times before some orders are placed. When are they going to be placed? Many franchises around the country are absolutely desperate for more capacity. I could mention the Great Northern franchise and the First Great Western franchise, and could take the noble Lord, Lord Bassam, to many other places where that is a major problem.

If the noble Lord, Lord Bassam, says that he does not have the money to buy new rolling stock, or that the rolling-stock companies will not lease it, or that they are so concerned with being brought before the Competition Commission that they will not lease it, there seems to be nothing to prevent the Government leasing it. You do not actually have to pay; you pay an annual rental charge. A market that is a sclerotic as the rolling-stock market in this country wants a good bit of old fashioned competition. The Government should buy 200 or 300 new trains and put them on the railway. Let us see what that does to the ridiculous prices that are being charged for the Pacer trains that are about to be reintroduced to Devon and Cornwall. The noble Lord, Lord Snape, might agree that introducing in 2007 what were Leyland National buses, which I think the bus industry got rid of 25 years ago, is absolutely disgraceful.

The Government might also consider safety regulation, which is almost strangling parts of the railway. It has been put together in bits, and because of it, we close two lines of railway on a Sunday. There used to be single-line working on the railway for which the noble Lord, Lord Snape, and I used to work. Much of our railway is now signalled for two-way working, but we do not use the second way. If the noble Lord, Lord Bassam, cannot tell me now, will he find out later why we are not using it? We did not go around killing lots of people; that is a complete misinterpretation of the facts.

When the noble Lord, Lord Bassam, answered a Question from me on Monday, he cited,

"the likelihood that, on current projected trends, over the next decade there will be an increase in the number of rail passengers of about 30 per cent".—[Hansard, 26/11/07; col. 1026.]

He does know, does he not, that we are at present getting more than 6 per cent? If, at the end of 10 years, one trajectory is at 3 per cent and another is at 6 per cent, there will be a very big gap that will be filled with dissatisfied, disaffected customers, despite the eulogy started by the noble Lord, Lord Berkeley, who said that things were getting better. Doubtless they are in some places—they are certainly getting better for freight, for which British Rail had almost a death wish. However, it is the satisfaction of customers to which the noble Lord, Lord Bassam, should turn his attention, because in the end the customers are voters who will get very cross with him and his Government if something more positive does not come forward.

Photo of Earl Attlee Earl Attlee Conservative 4:23, 29 November 2007

My Lords, I am grateful to the noble Lord, Lord Berkeley, for introducing the debate this afternoon. I am acutely aware of my limitations in this because I have no background in the railway industry. I do, however, understand technology a little.

Whenever I talk to anyone who has expertise on the railway industry outside this House, one name always comes up: that of the noble Lord, Lord Berkeley. He is not some anorak who will tell you some obscure detail about the utilisation of a particular piece of rolling stock. He had a substantial track record, and few noble Lords can match his experience. He continues his excellent work with his chairmanship of the Rail Freight Group.

The noble Lord teased me slightly about our policy on these Benches, but actually we are quite enjoying watching the business flourish in the private sector and in the way he described. He said that in the UK we were about 30 years ahead of our EU partners.

I noted the comments made by the noble Lord, Lord Dykes. Like the noble Lord, Lord Graham of Edmonton, I am not quite sure why the noble Lord did not join Liberal Democrats much earlier than he did. But it would be quite easy for me to be really—

Photo of Lord Dykes Lord Dykes Spokesperson in the Lords (Europe), Foreign & Commonwealth Affairs, Spokesperson in the Lords (Cap Reform), Environment, Food & Rural Affairs

My Lords, perhaps I may remind the noble Earl that I was sorely tempted from 1995 onwards. I have always disapproved strongly of crossing the Floor of the House because you usually cheat the public by not having a by-election and the mandate therefore is distorted. It is a party system rather than a personal system. Once I was freed from that by being defeated in 1997, some while later I joined another party.

Photo of Earl Attlee Earl Attlee Conservative

My Lords, I thank the noble Lord for that comment. My MP is the Member for Grantham and Stamford. It would be easy for me to be quite negative. The noble Lord, Lord Snape, might have expected me to be. But we are talking about a problem of success. I shall not repeat the figures that we have heard today, but the challenge is to increase capacity, reliability and utilisation.

The noble Lord, Lord Berkeley, started with a predictable attack on my noble friends, because none of them are contributing to the debate, and it is disappointing. But last week we had a debate on defence. Yes, there were two Labour Back-Benchers, but only one of them could be remotely said to be supporting the Government. We are all poor at supporting each other's debates, but the underlying problem is another matter.

The noble Lord, Lord Berkeley, talked about the carbon cost of road and aviation modes of transport, compared with rail transport. He suggested a four-hour rule. But how would overseas businessmen coming to Scotland feel about that? What would be the effect on the Scottish economy? I would not want to be responsible for implementing that policy. It seems to me that the railway system comprises of civil engineering assets, the permanent way, the signalling and power systems, the rolling stock, the staff, and then the passengers and freight customers. As far as I can see post-privatisation, the problem of the poor condition of rolling stock is largely solved, but I listened very carefully to the comments made by the noble Lord, Lord Bradshaw.

Because of the system of penalties for breakdowns and the need to attract customers in order to maximise revenue, operators have gone for better quality rolling stock. Old or unreliable rolling stock does not make commercial sense, but in the day of the noble Lord, Lord Snape, it kept plenty of rail maintenance personnel in work, as he indicated. At one time I thought that the noble Lord was auditioning to join these Benches. He then slightly spoilt it by resurrecting the road-rail debate, and longer and heavier vehicles. I am surprised that he did not challenge me on the policy on that. But we should wait and see what the report from the Heriot-Watt University says.

Photo of Lord Snape Lord Snape Labour

My Lords, I am grateful to the noble Earl for giving way. The reason why I have been a member of the Labour Party all my life is because my father was, too.

Photo of Earl Attlee Earl Attlee Conservative

My Lords, I do not think that I need to respond to that.

The noble Lord made some quite forceful observations about the road haulage industry. I can see little advantage for the road haulage industry in going to longer and heavier vehicles because all the productivity advantages would go to the consumer, as they did with the advent of 38 tonners and 44 tonners.

The noble Lord, Lord Greaves, made several detailed observations about rail connections, and he is right. The disappointment is that it is taking so long to sort out these problems. No doubt, long waits or the disruption of connections are a real deterrent to the use of rail rather than car. This month, Network Rail published its strategic business plan, which was derived from the high-level output statement. It is certainly exciting and seeks to address some of the problems arising from the success of railways post-privatisation. The SBP covers control period 4 from 2009-14.

In asking questions about the long-term budgets, I accept that the situation is much better than the one described by the noble Lord, Lord Snape, many years ago when we had very short-term budgets, but can the Minister tell us whether the strategic business plan is all funded in the CSR in future expenditure plans, or is it an aspiration, just like most of the 10-year transport plan? Is it really going to happen, and is it enough? Can the system cope in the future, as the noble Lord, Lord Berkeley, asked? What can be afforded?

Prior to privatisation in the mid-1990s, I read a report about capacity constraints. This was many years ago so I cannot remember all the bottlenecks, though there many even then. But for example, I recall that the Welwyn viaduct was mentioned. Can the Minister arrange for details of all the current bottlenecks in the rail transport system to be placed in the Library? The noble Lord, Lord Berkeley, painted what I am told is an accurate picture of the increase in requirements for transport. The Freight Transport Association is extremely exercised about the lack of capacity both of the ports and from them, so I hope that the HLOS does enough to provide an increased freight capacity.

I share the concern of many noble Lords about the poor utilisation of the Channel Tunnel. It is bizarre to have lorries going from the Midlands all the way to Italy when their freight could go by train. Can the Minister indicate what the problem is, what he is doing about it, and whether he will follow up the suggestion of the noble Lord, Lord Berkeley, and have a go at the EU Commission?

Prior to privatisation there seemed to be some confusion in the rail industry as to whether it existed for the benefit of those within it or its passengers and freight customers. There is little doubt about the answer today, at least in the UK. The noble Earl, Lord Glasgow, suggested that it was not privatisation which raised the utilisation of the railway system, but that congestion elsewhere made it essential. I do not know the answer, but if we had not reformed the industry, we really would be in a mess now. However, passenger care still has some way to go. This week we had some interesting media reports about the lady annunciator, if that is the right term, who will be experiencing severe delays before her next assignment arrives. But why are some of the announcements so dreary, Stalinist and unintelligible? There is plenty of good practice around, so why is it not universal?

I use the Tube system extensively, but I never bother to buy a ticket because I use an Oyster card. For how long are we going to persist with the antediluvian system of buying a ticket immediately before starting an ad hoc train journey? Why can there not be some form of national Oyster card? Of course it would have to be smarter than the current system, but it would avoid the risk of missing a train by a few minutes and the associated stress of that, and it would save the cost of issuing tickets in terms of labour, capital and space. I hope sincerely that the Minister can also tell us what progress is being made in extending the Oyster card system to all of the London commuter rail system. It would be interesting to compare the number of ticket machines at Victoria station with the number of retail outlets. Quite often at Victoria you see queues of very frustrated customers at each and every ticket machine, trying to buy a ticket before their train departs.

Finally, the signalling system is clearly key to safety, reliability, productivity and even fuel emissions, and we have been extremely lucky to have the contribution this afternoon of the noble Lord, Lord Methuen. I understand that the safety problems associated with SPAD have largely been solved, but now accidents at level crossings are the biggest risk to the system. Noble Lords did as much as they could during the passage of the Road Safety Bill to reduce that risk, but I am unhappy about the reliability of the signalling system. I do not understand why, from a technical point of view, we have such reliability problems. I am guessing, but I would not be surprised if a more sophisticated signalling system could produce a nugatory acceleration and deceleration of trains, which are very heavy, thus saving even more emissions. However, I recognise that rail transport is already very efficient on emissions.

Fortunately, my noble friend Lord Pearson of Rannoch is not in his place and so I can safely mention the European rail traffic management system so well described by the noble Lord, Lord Methuen. I am told that it will provide greater capacity, efficiency and reliability. If we want a pan-European rail freight system, as advocated by the noble Lord, Lord Berkeley, we will need to accept this European system.

As to our aspirations of what we can do with signalling in the long term, we have to ask whether they are ambitious enough. I am not an expert on signalling—I cannot answer the question—but if I were the Minister I would look very closely at it.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip 4:36, 29 November 2007

My Lords, I join in the general congratulations to my noble friend Lord Berkeley on securing the debate. In fact, I will go further than that and say that I have benefited greatly today from listening to the contributors to the debate. They obviously know far more about the history and development of the rail network than I do and I feel somewhat humble and inadequate in their presence. There is a wealth of knowledge in your Lordships' House, both on the Opposition Benches and the Benches behind me, on the rail network and its development. I pay tribute to all noble Lords who have contributed.

It has been a good debate because it was framed in a positive mode and was full of encouragement. It is a rare pleasure these days to be involved in debating issues where there is a genuine recognition that great improvements have been made, particularly over the past decade or so.

I share the sadness that was expressed at the outset by my noble friend Lord Berkeley about the absence of contributors on the Conservative Benches. I pay tribute to the noble Earl, Lord Attlee, for playing his part. It is sad that there has not been more of a contribution because the Conservative Party has a lot of explaining to do for the damage it did to the rail network during its 18 years in government. We have worked hard to put that right. Many of the problems we still have are because of the long-term lead-in necessary to solve them. This pre-figures what we have to do in order to roll out continuous improvement.

The noble Lord, Lord Faulkner, was right to discuss a renaissance in the railway network. That is certainly what is happening and we want to continue that renaissance. As many noble Lords have said, we are currently seeing record levels of train patronage. In the most recent full year figures the railways saw annual growth in passenger numbers accelerating to 7.5 per cent, up from 3.6 per cent in 2005. That takes the number passenger journeys to well over 1.1 billion, the highest level for 60 years, which is a real achievement when the railway network is now between 30 and 40 per cent smaller than it was in the 1940s. This makes our railway network the fastest growing in Europe.

The noble Lord, Lord Bradshaw, made a good point when he said that we will have to take account of this more recent rapid growth when considering our forward plans and our current prediction of a 30 per cent growth in passenger numbers. It is a fair point that has not escaped my attention; I have made it to officials on more than one occasion.

Like the passenger railway, rail freight is now growing after a long period of decline, a point made by a number of noble Lords, in particular by my noble friends Lord Berkeley and Lord Faulkner. The amount of freight moved has increased by 66 per cent since 1995 and we expect it to grow by another 30 per cent in the next 10 years. Noble Lords will appreciate that that growth, coupled with rising passenger numbers, will substantially increase the competition for space on the network. To cope with those ever-increasing numbers, we are taking steps to increase capacity. Over the next two years Network Rail plans to more than double its average annual investment in enhancement schemes to expand network capacity. Platforms will be lengthened, new platforms added, new tracks laid and line speeds raised.

The rail White Paper that was published in July, much praised during the debate, is a vote of confidence in rail travel. It is the most positive statement about the growth and development of Britain's railways in 50 years. It sets out the funds we intend to make available for the railways in the medium term, together with the improvements we expect the rail industry to deliver in return. It covers the period from 2009 to 2014. The aim is to develop a modern, sustainable system that is accessible and easy for passengers to use. In addition, it sets out our plans in the context of a long-term strategy covering the next 30 years. The White Paper is unique in delivering the single biggest programme of investment for a generation. More than £10 billion will be invested in enhancing capacity between 2009 and 2014. Overall government support for the railway will total some £15 billion.

Much has been said during the debate about the 1,300 extra carriages that are to come into service between now and 2014 and will go to the routes and services with the worst overcrowding problems. That will provide nearly 100,000 new seats for passengers on intercity commuter trains to our major cities. It will increase that capacity and will help us cope with the 30 per cent increase we currently project for the decade ahead. Roughly 900 of those new additional carriages are expected to go to London and the south-east, with the remainder being allocated to regional cities and inter-urban areas. Precise details have still to be finalised.

The next step in the process is for Network Rail and the industry to consider in more detail how best to deliver the Government's targets on capacity, safety and reliability through the introduction of more rolling stock. The department will publish a rolling stock plan in January 2008 setting out its proposals in more detail. The noble Lord, Lord Bradshaw, was particularly keen to learn about that. We hope to see the introduction of new rolling stock following on swiftly from that plan.

We are aiming for a network that can handle—

Photo of Lord Faulkner of Worcester Lord Faulkner of Worcester Deputy Chairman of Committees

My Lords, before my noble friend leaves rolling stock, will he confirm that the review in January will cover the issue of the Virgin request for two extra coaches for its Pendolino service? That is crucial for matching the supply of seats to the demand that is likely to exist in 2012.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, I do not have that detail but I will write, as I will have to on a number of the issues today. I appreciate the point the noble Lord has made. I had already made a careful note of it in my notes, and we will try to come to that in correspondence.

The Secretary of State has also specified an increase in reliability, which has been one of the hallmarks of our recent success, from 88 per cent to 92.6 per cent in 2014, and a further 25 per cent reduction in delays of more than 30 minutes. It is important to tackle both those issues.

The new InterCity Express programme vehicles will be introduced in addition to the 1,300 new carriages identified in the White Paper. The IEP will create a new design of train that will be lighter and more environmentally friendly than current long-distance trains. They will also be longer and capable of carrying significantly more passengers than current stock. This is a flexible train that can be deployed on different lines in different lengths and with different sources of power. We aim to award the contract to the successful bidder in the winter of 2008-09.

In planning future passenger services we need to ensure that the needs of freight are properly taken into account. We are investing £200 million in a strategic freight network that will help to reduce congestion on our roads. The Government see the productivity element of the transport innovation fund as a potential funding stream to enhance the network. It also represents the first steps towards the development of a strategic freight network.

Some passengers are concerned about possible fare increases—we have heard comments on that in today's debate. Now that industry costs are under better control, our aim is to return the balance of taxpayer funding to historic levels. In the past six years, the amount invested in rail has risen. However, nearly all of that increase has been met by taxpayers. Our objective is to restore the balance.

Under the franchise system, nearly 300 million more passengers a year use the trains. The revenue earned by franchise operators is paying for the capacity to accommodate the 180 million more passengers a year that we are expecting by 2014. We are delivering record numbers of new passengers and delivering the investment necessary to accommodate them. Our emphasis on increasing capacity means that we can make a start on tackling some of the worst overcrowding.

More than half of all rail journeys are on regulated fares, which we are continuing to protect at RPI plus 1 per cent up to 2014. Regulated fares are still on average 2 per cent lower in real terms than they were in 1996. They compare well with the cost of using a car if all motoring costs, and not just the cost of fuel, are taken fully into account.

Other fares, as noble Lords will know, are unregulated and can be set at operators' discretion. That does not mean that operators can simply increase fares as they wish, because they have to compete with cars, coaches and airlines. We want to see operators pricing people back on to trains and making train travel more affordable. In this way, we will maximise the benefit of the rail network to passengers, as well as reduce road congestion and help the environment. If fares rise, it is because they are helping to pay for new carriages, more frequent trains, improved stations and refurbished tracks.

Photo of Lord Dykes Lord Dykes Spokesperson in the Lords (Europe), Foreign & Commonwealth Affairs, Spokesperson in the Lords (Cap Reform), Environment, Food & Rural Affairs

My Lords, I hope that the Minister will forgive me for interrupting at this stage. He spoke about making trains more comfortable and affordable, and more attractive for other non-fare reasons as well. Will the Government put their full weight behind a move to have more quiet coaches, where mobile phones are not used, with people using their phones in between rather than in the carriages?

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, that is an aspect of passenger comfort. Like the noble Lord, I suffer from the excessive noise of people sitting beside me and the overuse of mobile phones. It is an issue that we continue to raise with the train operators.

To make it easier for passengers to identify and buy the ticket they need, we are bringing greater transparency to the fares structure. We are radically simplifying the fares structure by creating four simple categories across the whole network. They will be: anytime, off peak, super off peak and advance. The rail industry needs more efficient ways to sell tickets if it is to cope with the predicted growth in demand. The noble Earl, Lord Attlee, referred to the success of the Oyster card. We certainly support those developments, and other developments such as using a mobile phone to buy tickets. Increasingly, people want to be able to access services on their own terms, at a time and place of their convenience. As noble Lords will I am sure appreciate—I certainly do—they do not want to queue. That is why we will roll out ITSO smartcards across the rail system, supported where appropriate by ticket-to-mobile and print-at-home facilities. Additional internet-only fares will be allowed where they bring real value, responding to the recent growth in the trend for buying tickets over the internet. For the more traditionally minded among us, tickets will be available to purchase at stations. The National Rail Enquiry Service will provide a single source of comprehensive information through its website and over the telephone. Details about timetables, service disruption, real-time train running, fares and facilities will be available. Passengers will be able to find information about any fare available on the network and will be able more easily to plan their route.

A number of noble Lords mentioned standards of physical access and facilities at stations, which vary across the network. The noble Lord, Lord Methuen, raised the sad case of Derby station, which he thought was badly in need of attention. That is one of the 150 mid-size stations for whose refurbishment and modernisation the Government have set aside £150 million. Of course, that money has been set aside on top of the £370 million of accessibility funding that we have announced at an earlier time. Precise costed plans for the near future include approval for the £5.5 billion Thameslink project, a £120 million grant for the major redevelopment of Birmingham New Street to improve passenger capacity and station environment and works at Reading station to eliminate a major bottleneck on that particular part of the network.

A number of noble Lords referred to the Crossrail project. Of course, much is known about that—it is a new east-west railway, linking Maidenhead and Heathrow with Shenfield and Abbey Wood through new tunnels under the centre of London. It is to be funded by the Government, Transport for London and businesses that will directly benefit from that link. Work on this massive £16 billion project will begin in 2010 and the first trains are expected to run in 2017. It will carry nearly 200 million passengers a year, significantly increasing capacity on the network into and across London. That will be achieved by increasing peak east-west capacity by some 40 per cent, adding 21 per cent to total rail capacity to the City and 54 per cent to Canary Wharf. Its contribution towards relieving congestion and overcrowding on the existing national rail and underground networks should not be underestimated. Ultimately, Crossrail will help to meet the substantial growth in demand for travel in the capital expected over the coming decades and continue the important regeneration and growth in London's economy.

Crossrail is and should be recognised not just as a project for London but as a project for the nation, as it will benefit not only London but the country as a whole, providing strategic interchanges for local, national and international rail passengers.

Photo of Lord Methuen Lord Methuen Liberal Democrat

My Lords, does the Minister agree that Crossrail would be much more effective if it was extended as I suggested?

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, the noble Lord makes a fair and reasonable point. No doubt that is one of the issues that will be reviewed over time.

It is estimated that Crossrail will add some £200 billion to the UK's GDP and attract an additional 80,000 jobs to regeneration areas.

In their positive contributions noble Lords made a number of very important points and raised a number of very important issues. One of those was the air versus rail substitution issue. We of course support the use of rail when it can provide a reasonable alternative to short-haul air services. Studies suggest that rail competes well with air on point-to-point journeys of two to three hours. For longer journeys, air travel is a mode of choice and investments to improve our inter-urban rail network will over time increase the attractiveness of rail as an alternative, as will more attractive pricing packages offered by the rail companies.

It is not up to the Government to dictate how and when people travel, as that is obviously a matter for personal choice, but we are keen to get more people on to the rail network and it is true that as a percentage or proportion fewer people travel by plane and more by train. To give an example, over the past five years passenger numbers on the rail network have increased by some 15 per cent. Rail's share of travel between London and Manchester has switched, for example, and now two-thirds of passengers travel by train rather than plane, up from one-third in 2004. There have been similar improvements on the main links between London and Scotland. So we can see and look forward to continuing improvements in that regard.

The noble Lord, Lord Berkeley, made one interesting point—of special interest to me, as I share an interest in planning issues. He praised the Government for introducing the Planning Reform Bill—and I welcome that support—because of its potential for ensuring that strategic rail freight interchanges benefit from the careful consideration that will no doubt be given to them through the new Infrastructure Planning Commission, which means that they will be subject to statutory timetables and that the potential for delay will be much reduced. In that context, we may well see that Birmingham New Street, Reading and the other smaller upgrades announced in the rail White Paper could be considered by the Infrastructure Planning Commission. That would helpfully speed matters along in terms of considerations.

Several noble Lords referred to the European Rail Traffic Management System. The noble Lords, Lord Berkeley and Lord Methuen, made some important points about that. It is an important advanced signalling system, which will eventually replace line-side signals with in-cab signals with all the benefits that that might bring, potentially offering the ability to run trains closer together and increase capacity on the network. However, the technology is still being developed and trials are being set up. I think the noble Lord, Lord Methuen, referred to the Cambrian coast line pilot for which money is already allocated. We launched the technical strategy at the same time as the publication of the White Paper and we made it clear that the ERTMS is part of our medium-term to long-term thinking. It has great potential for the future.

Reference was made, particularly by noble Lords on the Liberal Democrat Benches, to the value of introducing high-speed lines. Interest has focused on this with the opening of the Channel Tunnel high-speed link. I understand the argument that noble Lords on the Liberal Democrat Benches made for this and it is welcome that they want to enter into this debate, but it should be fairly said that high-speed lines do not address the priorities for the railway system as it is. The danger is that the sort of investment into high-speed lines that those noble Lords are asking for could distort our budgets and absorb large sums of money for gains that are not so apparent. The commitment to a network of that sort could lead to expenditure somewhere in the region of £30 billion. I would be interested to hear from the Liberal Democrats where they see that money coming from.

The Eddington transport study recommended pursuing high-speed rail options only where they have been demonstrated to be the highest value for money option to relieve the congested corridors, which makes good sense. We need to ensure that we increase capacity in order to tackle congestion on the network. Our belief is that the measures in the high-level output statement and strategy will do this in the foreseeable future.

To add to the argument, the economic geography of the United Kingdom is different from our European partners with their emphasis on high-speed lines. Our main challenges are congestion and reliability, rather less being journey times and connections. I understand the force of the argument and I am encouraged by the commitment to debate on the issue, but we will get greater value for investment in the InterCity Express programme. I have spoken a fair bit about that and the increase in vehicles that we will have to service that commitment.

My noble friend Lord Snape made some telling comments. I was grateful to him for his support for the Government's programme and his general encouragement. He asked questions about the funding gap. We cannot expect the Network Rail business plan to match the High Level Output Statement and White Paper exactly. After all, it is an iterative process. The so-called funding gap largely relates to items that are optional extras rather than commitments such as the 1,300 new carriages. We are in continued discussions with the Office of Rail Regulation and we will be developing the next version of its business plan which is not finalised until the start of the HLOS period in 2009. There is much discussion to continue, quite properly, and we have to look at issues such as assumed rates of return and put in place some precautionary schemes which may or may not be required to deliver on reliability and improvements.

My noble friend also drew our attention to the importance of electrification. We do not rule out further electrification. We obviously recognise the benefits of electrifying some routes and certainly recognise and understand the environmental arguments for it. We have to measure the priority for electrification in good business terms and in terms of operational need. If we can reduce the cost of electrification, the case for it can be strengthened. The key question is whether the investment will recover its costs within a 10 to 15 year period so that it can pay for itself regardless of what the optimum longer term carbon choices turn out to be.

Photo of Lord Snape Lord Snape Labour

My Lords, I am sorry to interrupt my noble friend but if we are to have a diesel-hauled railway in financial control period four up to 2014, what is the Government's estimate of the price of a barrel of oil between now and 2014?

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, I intend to come to that point because the noble Lord, Lord Bradshaw, asked a similar question about our projected costs. As regards my noble friend's other point about the heavier goods vehicles, there has been a lot of coverage on this and I think there was an article in the Times on 26 November. There are no plans to allow LHVs in the UK. The Transport Research Laboratory—one noble Lord also referred to the Heriot-Watt study—is undertaking a desk study to assess what the effects might be if LHVs were to be committed. That study was commissioned in response to a growing interest within the rail freight industry. However, I reiterate that we have no plans to allow LHVs in the UK.

I am conscious of the time. I realise that I am running over but I shall comment on oil. The noble Lord, Lord Dykes, gave an interesting historical discourse and made important points about the Channel Tunnel Rail Link and freight. The opening of section two of the CTRL does not threaten its use by freight in any way; in fact it will free up more paths on those parts of the conventional network not currently used by Eurostar. We are in continued consultation on the charging regime for CTRL and that covers passenger and freight operations. There is no doubt that freight operators will continue to let us have their views and that will inform our negotiations and discussions.

The noble Lord, Lord Bradshaw, asked me at Question Time yesterday about the assumptions made on fuel prices that underpin the DfT forecasts. Those assumptions are set out in the UK air passenger demand and CO2 forecast November 2007 report. The forecasts are based on the Department for Business, Enterprise and Regulatory Reform's central forecasts on oil prices. Its forecast is that oil prices will fall from $65 per barrel in 2006 to some $53 dollars per barrel in 2030, with most of the decline occurring from 2012. That is the basis on which those projections are made. Of course, there will be a wide-ranging debate and continued reflection on that and no doubt there will be considerable disagreement too, but that is the model on which we currently base our view.

I shall stop now as I recognise that I have gone on for far too long. However, this has been a very helpful, enjoyable and positive debate. Noble Lords asked many questions. The noble Earl, Lord Attlee, asked me quite a few detailed questions that I have not dealt with. I shall endeavour to put my answers together in a compendium letter which I shall circulate not just to those who asked the questions but to all other noble Lords who contributed to this very useful and positive discussion on the future of our rail network.

Photo of Lord Berkeley Lord Berkeley Labour 5:04, 29 November 2007

My Lords, I am most grateful to all noble Lords who have contributed to the debate. It demonstrated the wide-ranging expertise and knowledge about railways in your Lordships' House, and has been really good. As my noble friend Lord Snape said, this is the first time that we have had a five-year plan financed for the railways. Most of us have debated where growth should come, which is very positive.

I leave your Lordships with one interesting statistic. The noble Lord, Lord Greaves, mentioned that the reopening of his line from Skipton to Colne was estimated to cost between £43 million and £81 million. I am told that that is the price of delaying the Crossrail project next summer by one month, so that gives us some food for thought as to where the allocation of new investment should go. With that, I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.