Rail Franchise Agreements

– in the House of Commons at 4:00 pm on 12th March 2014.

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Motion made, and Question proposed, That this House do now adjourn.—(Harriett Baldwin.)

Photo of Penny Mordaunt Penny Mordaunt Conservative, Portsmouth North 4:11 pm, 12th March 2014

As I make my speech, Members could be forgiven for thinking that they have heard it all before, for indeed they have. It was three years and three days ago that I first set out the case for reform of rail franchises based on my constituents’ experience of the South West Trains-operated London to Portsmouth line. Since then we have had another two changes of Secretary of State and two changes of Minister of State. I have raised this issue with Ministers and with South West Trains, and have ongoing discussions with my constituents, yet matters have not improved. The debate on rail infrastructure has become even more focused on capacity, and with good reason.

When making the case for High Speed 2, the Government have pointed out that the number of passenger miles travelled on the national rail network has increased from 20 billion in 1992-93 to 36 billion in 2012-13; the number of rail passenger journeys has increased from 976 million in 2002-03 to 1.502 billion in 2012-13, a 54% increase; and inter-city journeys have increased from 77 million to 128 million in the same period, an increase of 65%. As is well known, the rail-using public pay handsomely to make those 128 million journeys, and many of them feel that they are not getting value for money when they must travel in discomfort caused by standing or an inadequate seat.

On the London-Portsmouth line the discomfort debate centres on the vexed matter of the blue 450 Desiro carriages. South West Trains introduced the carriages in significant numbers in 2006 to address overcrowding on the trains made up of 444 Desiro carriages, arguing that a rake of 12 450s has 140 more standard-class seats than a rake of 10 444s. To justify the move, SWT used the passengers in excess of capacity surveys conducted in 2005 and 2006. There are two problems with the rationale: one a flaw in SWT’s logic and the other a flaw in its argument.

First, South West Trains contends that by substituting a rake of 450s for a rake of 444s, 140 standing passengers will be allowed to sit. For example, the 5.50 am train from Portsmouth harbour showed a peak count of 164 standing passengers. When the 450s were introduced, SWT supposed that that would leave only 24 people standing. On paper that seems to work, and when replying to the previous debate, the then Minister seemed to agree with the premise that the 450s mean fewer standing passengers between Woking and Waterloo. However, in practice, matters are not so simple. The 444 carriages are four seats wide—two either side of a wide aisle and all with armrests, so there is space between each seat. The seats are mostly arranged in an airline style and one can face a fellow passenger only across a table. The tables and personal space allowed by the wide seats permit commuters to work or take refreshment in acceptable comfort. What is more, each and every one of the 299 seats in a 10-carriage rake can be used.

Madam Deputy Speaker, as sequels go, “London to Portsmouth railway line II” is tediously similar to the original, so you will know where the plot is heading.

The tedium is repeated day after day for Portsmouth commuters. The notion that there will be an increase of 140 seats when a 10-carriage rake of 444s is replaced by a 12-carriage rake of 450s is total fantasy. The 450 carriages have five seats squeezed across their width arranged in a three-plus-two format with a narrow gangway in between. There is no space between seats and there are no armrests; many passengers must travel face to face and literally knee to knee. Laughably, South West Trains’ own ergonomic investigation found that 59% of passengers do not fit within the confines of the seats

“when their elbows are taken into account”.

Simply put, that means that nearly 60% of people do not fit because, unfortunately, human evolution has not kept pace with South West Trains’ aspirations and Britons have stubbornly refused to mutate into the armless monopods for whom the company would clearly prefer to cater.

The consequence of the dimensions of the seats on a 450 is that only three of the five seats across the width of the carriage can be used if those seats are occupied by what we might call three 59ers—those among the 59% who do not fit. If only three seats in a carriage can be comfortably used on a 450 rake, there are, coincidentally, only 444 available places to sit—some 150 or so fewer than in the original rake of 444 carriages. In practice, it is not at all clear that the 450s will reduce the number of standing passengers. In addition, Portsmouth passengers are obliged to make a 97-minute inter-city journey in a carriage that is uncomfortable and was specifically designed for shorter, suburban routes.

Obviously, crowding happens when the train is nearest London, as the vast majority of passengers will use the Waterloo terminus. Arguably, the 450s are suitable for the 45 minutes nearest London, when the train is busiest. Passengers joining so close to the capital can take the discomfort and violation of personal space for a time, it is thought. However, how many of them would rather stand than cram themselves into the uninviting middle seat of what is, without gaps between seats, effectively a 129 cm bench? Those seats are no more comfortable for the suburban than the inter-city commuter; the discomfort is simply reduced by the shorter journey.

On the criterion of delivering more seats, the use of the 450 carriages is on shaky ground. We might have the same number of seats, or fewer, but we certainly have many more discontented passengers. It is little wonder that, in a survey of Twitter activity last year, South West Trains was found to be the most complained-about operator in the country.

Even if we accept the South West Trains rationale at face value and assume that all the extra seats can be used to relieve overcrowding, the case still does not add up. If the only reason for bringing in the 450s on just under 50% of week-day services was to address overcrowding, we are entitled to wonder why all but one train on the line, up or down, is formed of 450 carriages on Saturdays, when there is no danger of overcrowding.

In reply to me last time, the then Minister explained that South West Trains was obliged to lease the new Siemens rolling stock under a section 54 undertaking, but it was also confirmed that the train operating company can deploy the sets as it will. Why, then, park all the

444s and force all passengers to travel in discomfort? A possible answer comes from an anonymous Siemens employee who provided the “No to 450” campaign with evidence to suggest that the 444 services were replaced by the 450s so that the mileage on the 444 carriages would fall into a cheaper maintenance bracket, saving South West Trains some £2 million a year.

The consequence is that the passenger pays the same for a less good service and can be obliged to travel for over an hour-and-a-half on a train that was never intended for such a route and causes extreme discomfort. Furthermore, the commuters from Woking to Waterloo—the very people whom South West Trains and the Government argue are helped by the 450s—still might not get a seat or will have to take a very undesirable seat.

That is not a problem to South West Trains, reasoning as it does that the inadequacies of the 450s are merely

“a comfort issue not a health risk.”.

That is not only an unsatisfactory attitude to the welfare of my constituents, but not entirely correct either, as visits to chiropractors for regular users are not unknown. Indeed, I handed a dossier of correspondence that I received from hundreds of passengers on the line to the then Secretary of State, my right hon. Friend Justine Greening, which detailed the health complaints attributed to the specification of the 450 carriages.

My constituents and I are realistic enough to recognise that whole-scale change will not happen, but there is a change that could be made in the short term that would do much to relieve the strain on south coast commuters. Using the latitude to deploy carriage sets as it will, South West Trains should provide for a half-hourly express service between Portsmouth and Waterloo, which is made up of 10 444 carriages. As an express, it would not stop in the suburban commuter belt and, as it would be at the same times each week day, Portsmouth residents could adjust their routine to catch it, thereby relieving the crush for suburban commuters on stopping services. South West Trains might even use its imagination to give the service a name, recalling a more charming railway age. The “Portsmouth Flyer” or the “Navy Express” would do nicely. That is a modest request, and one that I hope the Minister will join me in urging upon South West Trains.

The situation on the London to Portsmouth line is symptomatic of the way the privatised railway network is configured. The forces of competition, which should benefit the customer, only work when there is a viable alternative to railway travel, or a particular railway route. In the case of Portsmouth, some alternative is offered by the improved road network and the longer journey by rail into Victoria. For most, there is simply no option but to take the train to Waterloo.

The moment of most intense competition in the privatised rail network, when market forces can have the greatest positive impact on the rail passenger’s experience, comes during the tendering process for a rail franchise. After that, the impetus of competition within the sector principally benefits the train operating company or its supplier. For example, passengers have not benefited from South West Train's apparent decision to save money by limiting the use of 444 carriages, and they have not seen a reduction in ticket price or an improved service in the light of the cheaper lease cost of the 450s. It is incumbent on the Government to use the competitive forces of the tendering process to drive the best deal for passengers, and the best way to do that is to give passengers a voice in the process.

What consideration has the Department made of how to involve passengers in the tender process? I would also like to see, as you, Madam Deputy Speaker, and the Department for Transport know, comfort requirements included in new rail franchise agreements. It is a cause of some bewilderment to me that when contracting for services that have to carry passengers the length of the country there is no criteria for the standard of comfort they should expect on different sorts of journey. The fact that rolling stock manufacturers produce different classes of carriage shows that the industry recognises the different demands of suburban and inter-city travel and it should do in the rail franchise agreements.

In its response to the “Reforming Rail Franchising” consultation, the Government said that they

“may ask bidders to commit to quality improvements which are within their control, such as the onboard environment; station environment; customer service and information.”

What progress has the Department made in that respect? Will it make those matters necessary criteria in the bidding for new franchises?

I feel that perhaps I should apologise for putting the House through this litany of complaint once again, but I hesitate to do so because I am aware that my commuting constituents have lived with it on each of the three years and three days since its last outing in this Chamber. Will the Minister meet me to discuss these matters and work with me to ensure that, in another three years, by which time a new rail franchise agreement will have come in, I can—my constituents willing—make a rather different speech?

Shakespeare wrote:

“There is a tide in the affairs of men

Which, taken at the flood, leads on to fortune;

Omitted, all the voyage of their life

Is bound in shallows and in miseries”.

Let us take the opportunity of new rail franchise agreements to ensure that Britain’s railway users need not voyage in misery, but travel thanking their good fortune that my hon. Friend Stephen Hammond served as Minister for the Railways.

Photo of Stephen Hammond Stephen Hammond The Parliamentary Under-Secretary of State for Transport 4:25 pm, 12th March 2014

I thank my hon. Friend Penny Mordaunt for securing the debate, and indeed for her closing remarks—I give all thanks for God’s good fortune that I am a Minister. I hope that she will take some comfort from my remarks about the changes we have made to the franchising system since re-establishing it in March 2013, as some of the things she spoke about are now integral to the new franchising process.

As we heard, my hon. Friend has been an extraordinary doughty campaigner on behalf of the constituents in relation to the service from Portsmouth. I know that there is a significant file of correspondence between my

Department and her on the subject, and I know that she has previously secured debates on the matter in the House.

Although I am tempted to use the three hours available, that might not find favour with you, Madam Deputy Speaker, so I will limit my remarks to the standard length for Adjournment debates and speak for about 15 minutes. I will talk first about the franchising process and the reforms we have made, and then address some of my hon. Friend’s specific comments and offer some words that hopefully will help her as she continues, quite rightly, to campaign to ensure the best for her constituents.

It is important that we understand exactly what a franchising process is and the general principles the Department follows in that regard. Strictly speaking, as most people understand, a franchise agreement is merely a contract between the Department and the operating company that sets out the responsibilities of each party. In many ways that is what we are buying through the privatised railway. Our franchise agreements contain a number of schedules, all of which include obligations that the train operating companies and the Secretary of State have to one another.

However, it is also pertinent to the debate to point out that when we make a franchise agreement with a private sector partner we go through a number of processes to ensure that the process is run correctly and is free of influence. The Secretary of State announced a new franchising programme in March last year, including, for the first time, a long-term schedule and the direct awards that we will make. That ensures that the process can be for the long term, that bidders can bid correctly and that there is the right number of bidders in the process to ensure value for money. We plan to update that schedule annually, and I or one of my colleagues will update the House on that in the near future.

The process the Departments undertakes has been set out in detail in the franchise competition and process guide. There are detailed changes from competition to competition, but the process is broadly simple. However, there have been a number of changes that I think are pertinent. One of those changes—a huge change—has been in the consultation that takes place with the public and the rail industry. That is essential to the ongoing franchise programme. We are revising our public consultation procedures to ensure that we consult as widely as we can when setting objectives for new franchises, and that has dramatically increased the amount of consultation that the Department undertakes.

In recent competitions, we have worked extensively with Network Rail and the Office of Rail Regulation, but also, more importantly and pertinently for the issues that my hon. Friend raises, with Passenger Focus and, particularly in the London area, with London TravelWatch. That has ensured that the wider industry and the wider interests outside the bidding community have been involved in looking at what should be the proposed specifications. We are asking organisations to provide in future their own advice on bidders’ responses to franchise competitions. We have also spoken to Members of Parliament, local authorities and other local groups, and consulted widely with the Rail Delivery Group and the bidders themselves to ensure that our propositions are robust and deliverable. All those groups now have a chance to make a significant contribution to, and have a significant impact on, the specifications. It is absolutely key to the new franchising process that the Government have committed to that level of engagement as we move forward, and there has clearly been an improvement.

As my hon. Friend said, the privatisation of the railways has seen an industry that was in decline turn into a resounding success story. We are now moving into a crucial period where Government, having reset the franchising process, must work in partnership with the private sector to build on that success. That is why the process has been restarted. We are taking steps to improve the way in which we contract with the private sector. That has been highlighted most recently in the new contract procedure that we are undertaking with the east coast main line, where we set out a prospectus that provided for consultation with the public and the rail industry, as I described, before the invitation to tender. We in Government need to deliver the highest quality specifications in invitations to tender that ensure that the bids we get mean that the franchise arrangements will deliver the best possible rail services for passengers and taxpayers.

The second point that is key in understanding the changes to the franchising process that we have undertaken in the past year is that, for the first time ever—this is one of the biggest changes we have made—we are taking into account non-financial factors in our assessment of bids. We are doing this right now as we evaluate the bids for the Essex Thameside and the Thameslink, Southern and Great Northern franchises. In the past, ever since the start of rail franchising, we have scored bids only on the financial elements and the elements that deliver a return in terms of premium or reduced subsidy. The financial factors are obviously important, but, as my hon. Friend said, the quality of service that passengers receive, and therefore the quality aspects of bids, must be taken into account. The Department now does that, particularly when, as is often the case, the financial aspects are relatively closely matched and the quality aspects can be a potential tie-breaker in the assessment of bids.

This has been put in place to drive a certain set of behaviours in bidders, which, in turn, drives a certain set of changes to the bid and the outcome for passengers once the franchise agreement is in place. Putting quality into the bidding process is not only changing the mindset of bidders but, most importantly, putting the passenger at the forefront of the franchising process. We have recognised that in the past this process has not always delivered for the passenger or the taxpayer, and that is the rationale for the change. These are often rightly referred to as the quality issues, and they will improve the experience of passengers.

Each franchise competition will inevitably assess its own approach to quality and consider the balance between affordability and appropriateness with regard to the objectives that the Secretary of State and the private sector hope to achieve in the franchising process. It will also consider the ways in which we can improve the experience for passengers and the long-term value for the taxpayer.

The Department recognises the need to provide the right environment to encourage the continuing success of the railways. A large amount of my hon. Friend’s speech rightly centred on the rolling stock. The Department faces some considerable capacity issues. The increase in the number of people wishing to travel on a number of routes means that we need to find ways to increase capacity.

People who travel often want to sit and I understand the tensions my hon. Friend has referred to with regard to the rolling stock on the Portsmouth to London line. The class 450s that were put in place by Stagecoach South West on that route have undoubtedly increased the seating capacity, but she is right to raise issues about how that capacity is reached. There is a regional trend towards the common adoption of three-plus-two seating in standard class, which allows more passengers to be seated and fewer to be required to stand, but I recognise that there is a judgment to be made on comfortability.

My hon. Friend referred to an interesting report that concludes that a seat that is judged to be comfortable can lead to some pain and that, conversely, a seat that is judged to be uncomfortable may cause no damage at all. Although the report rightly highlights some of the possible complaints about the 450s and their formation, I am not sure that it is as conclusive as has been suggested to her campaign. None the less, she is right to point out that the 450s have implications for many of her commuters who do not regard them as comfortable. Therefore, as I pointed out, the new franchising process seeks to achieve a balance between affordability and quality. We must consider whether the balance between capacity and the appropriate comfortableness of passengers is right.

I would be delighted to meet my hon. Friend to discuss in some depth the merits of the 444 against the 450 and its appropriateness for her commuters. I also hope that my rather long explanation of the franchising process—although it could have been much longer—has led her to recognise that there has been change that allows for the possibility of new services that would be of benefit to her commuters. I would very much welcome her contribution on that and I am sure we will discuss it at our meeting. A semi-fast Portsmouth Flyer, or even the Mordaunt Express—which would be an excellent innovation—would be possible under the new franchising process.

One of the aspects that I have not described in more detail is that, while we are setting minimum temporary speed restrictions as a train service requirement, we are also giving points to bidders to consider how new markets and opportunities, which the new capacity we are building and the huge Government investment in the railways afford, can be incorporated into the new franchise agreements. When we start the refranchising process for my hon. Friend’s line, I would urge her to take the opportunity to engage in that process. There is a real opportunity to influence it. I hope she will take it and I am sure she will make that point at her meeting with me.

My right hon. Friend the Secretary of State has quite rightly said that we need to put passengers at the heart of franchises. The changes that we are making to the franchising process are starting to make a real change in ensuring that passengers are central to the franchise competition. We are now consulting them, and we are looking at the possibility of using innovation to take that consultation through the evaluation process, so that the quality provided to passengers is assessed in the bidding process for the first time ever.

It is a new and changed process, and I hope that my hon. Friend agrees that it will certainly start to make a potential difference to her commuters when we put the line’s new franchise process in place in two years’ time. As I have just said, I am delighted to have the opportunity to meet her in the interim. I hope that my remarks have given her some comfort that the Government recognise the plight of the Portsmouth commuter and recognise that some changes are possible.

Question put and agreed to.

House adjourned.