Railways: East Coast Main Line — Question

– in the House of Lords at 2:57 pm on 12 May 2009.

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Photo of Lord Berkeley Lord Berkeley Labour 2:57, 12 May 2009

To ask Her Majesty's Government what is their response to reports that National Express is in discussions about the future of the franchise for the East Coast main line.

Photo of Lord Adonis Lord Adonis Minister of State, Department for Transport, Minister of State (Department for Transport)

My Lords, the Department for Transport meets all train operating companies on a regular basis and these meetings include discussion on the impact of the current economic climate.

Photo of Lord Berkeley Lord Berkeley Labour

My Lords, I am grateful to my noble friend and I am glad to hear that he often meets the train operators, but will he clarify whether there will be any circumstances in which a franchisee who fails would be allowed to renegotiate his contract into a management contract to reduce the risk? Does my noble friend not agree that, unless franchisees are excluded from renegotiating their own contracts, after the first one is done, all the other franchisees in difficulties will wish to follow the lead of the first one?

Photo of Lord Adonis Lord Adonis Minister of State, Department for Transport, Minister of State (Department for Transport)

My Lords, Section 30 of the Railways Act 1993 gives the Secretary of State the duty to provide or secure rail services where,

"a franchise agreement is terminated or otherwise comes to an end".

Management contracts are one of a number of ways that the Secretary of State can meet that obligation.

Photo of Lord Bradshaw Lord Bradshaw Spokesperson for Transport

My Lords, in view of the collapse of Railtrack, the bankruptcy of Metronet and now, we are told, the imminent collapse of some railway franchises, will the Minister explain to the House the benefits of involving the private sector in the provision of railway services?

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It would be worth the Lords looking back at the state of the rail network at the end of BR. They were not running a railway, they were running it down. What is needed...

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Photo of Lord Adonis Lord Adonis Minister of State, Department for Transport, Minister of State (Department for Transport)

My Lords, we inherited the current arrangements in terms of the privatisation of the railways, but we do not believe that it would be in the public interest to have another period of institutional turmoil in an industry whose quality of service is systematically improving, although there is still a good way to go to improve further.

Photo of Lord Mawhinney Lord Mawhinney Conservative

My Lords, as a former Transport Secretary, and in light of the previous question, I declare an interest and a disappointment that the Minister did not point out the enormous increase both in the number of people using the railways and in investment in the railways since they went into the private sector. Would the Minister be willing to place in the Library of the House those clauses in the National Express contract that indicate how the payment made by the operator relates to the general state of the economy and how it may rise or fall depending on the state of the economy?

Photo of Lord Palmer Lord Palmer Crossbench

My Lords, when this was debated under the previous Administration, I, along with the late Lord Peyton, felt very strongly that railways should not be privatised. In view of the current economic crisis, it is worth the Government at least looking at taking the entire rail network back under their control. Does the Minister not agree that this has merit?

Photo of Lord Adonis Lord Adonis Minister of State, Department for Transport, Minister of State (Department for Transport)

No, my Lords, I will not accept that invitation, if the noble Lord will forgive me. As I said in reply to an earlier question, we see no benefit to the public in further institutional turmoil in the industry. Quality of service is improving, rates of investment are also improving and we want to see those responsible for the management of the industry in its current state get on with the job and continue to improve the service. We do not believe that hanging a sword of Damocles above their heads would serve any public good whatever.

Photo of Lord Faulkner of Worcester Lord Faulkner of Worcester Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, following on from the reference by the noble Lord, Lord Palmer, to the late Lord Peyton, can my noble friend confirm that he succeeded in moving an amendment in your Lordships' House which gave the then British Railways Board the opportunity to run franchises in competition with the train operating companies which were bidding for them? Can he confirm also that, if franchises fail, he and the Department for Transport have an emergency plan for other operators to step in and take over?

Photo of Earl Ferrers Earl Ferrers Conservative

My Lords, I wonder whether the noble Lord would be good enough to rethink his original Answer and to answer the Question on the Order Paper, which asks the Government,

"what is their response to reports that National Express is in discussions about the future of the franchise".

As I understood, it, the noble Lord said, "We are often in a lot of discussions with rail companies", but I did not hear him say what the conclusion was.

Photo of Lord Adonis Lord Adonis Minister of State, Department for Transport, Minister of State (Department for Transport)

My Lords, these discussions are commercially sensitive and it would not be appropriate for me to give a running commentary on them. The noble Earl can be reassured, however, that we meet the railway companies frequently to discuss all matters of concern to them and to the Government.

Photo of Lord Brooke of Sutton Mandeville Lord Brooke of Sutton Mandeville Conservative

My Lords, given the present tourist boom and the Minister's own admirably extensive travels, can he say how many cathedrals in the United Kingdom cannot be seen from a train?

Photo of Lord Adonis Lord Adonis Minister of State, Department for Transport, Minister of State (Department for Transport)

My Lords, I am trying to think of my passage around the country and how many I saw, which was quite a large number. I will undertake to write to the noble Lord with that information—unlike the earlier information requested, I do not believe that it is commercially sensitive.

Photo of Earl Attlee Earl Attlee Shadow Minister, Transport

My Lords, if a franchisee—a TOC—has to hand in the keys to a non-profitable franchise, is he able to retain the profitable ones?

Photo of Lord Adonis Lord Adonis Minister of State, Department for Transport, Minister of State (Department for Transport)

My Lords, the department has the power to cross-default franchise operators, but we would take a decision on that in each individual case.

Photo of Lord Stoddart of Swindon Lord Stoddart of Swindon Independent Labour

My Lords, is the noble Lord aware that some people will be disappointed with the dusty answers he gave the noble Lords, Lord Bradshaw and Lord Palmer, about taking the railways back into public ownership? Is this not an opportunity for the Government to honour the promise made by John Prescott before the 1997 election that he would renationalise the railways?

Photo of Lord Adonis Lord Adonis Minister of State, Department for Transport, Minister of State (Department for Transport)

My Lords, as I have said repeatedly this afternoon, we see no public interest being served at all in creating further institutional turmoil in the railway industry.

Photo of Lord Roberts of Conwy Lord Roberts of Conwy Conservative

My Lords, during the noble Lord's recent travels, it was noted in Wales that he did not visit Wales. Will he include Wales in his next itinerary?

Photo of Lord Adonis Lord Adonis Minister of State, Department for Transport, Minister of State (Department for Transport)

My Lords, that is a vile falsehood. As the noble Lord will know better than anyone, the train from Shrewsbury to Chester passes through Wrexham.