The Government believe that franchising is the best way of delivering benefits for both passengers and taxpayers. The proof of that is in the benefits we gain for passengers and taxpayers on the open market, such as new trains, new services, more frequent services and improved stations. As my hon. Friend is aware, we are currently consulting on the specifications for the next south western franchise. I hope that she and her constituents are fully engaged in the process.
Southern rail allegedly serves Fareham, Swanwick and Portchester stations in my constituency, but commuters are fed up with the cancellations and severe delays. I am glad that the Secretary of State acknowledges that the service is not good enough, but will he reassure me that the mainline west and coastway west routes will be considered as part of the future improvement plans? Will the franchise be withdrawn if no improvement is shown?
We are seeing unprecedented growth in rail traffic and transport. Importantly, the Government have matched that by increasing the investment for Network Rail over the next control period. Some of the improvement that my hon. Friend talks about needs to take place. I say to my hon. Friends, however, that there will be disruption while some of this improvement is taking place. Sometimes that will be because of the train operating companies, but sometimes it will be because of the failure of previous Governments to invest properly in the railways and upgrade them.
There is unlikely to be much UK steel used in the train contract that has just been awarded to the Spanish. What can the Government do to use franchising and other measures to ensure that their new procurement guidelines, which are a big step in the right direction, begin to have some purchase to ensure that steel content is included in such contracts?
First and foremost, I would point out to the hon. Gentleman the amount of money that is spent by Network Rail in purchasing steel from his constituency or thereabouts. That is an important movement in the right place. It would have been a bigger betrayal to the people of the north had we not said that we need new rolling stock to replace the Pacers. I am pleased that the Government will replace the Pacers. The very fact that our train builders in this country—Bombardier and Hitachi—are busy is because of the record investment the Government are putting into the railways.
Yes, but the new franchising could lead to more passengers on that track and the problem might grow. I am very pleased with the investment taking place in and around my hon. Friend’s constituency, not least the work on the Farnworth tunnel, which will increase the capacity and availability of electric trains to eventually serve his constituency.
Will the Secretary of State learn from the Scottish Government on franchising? As well as new trains and capacity, will he get commitments for the real living wage for all staff and subcontractors, new apprenticeships, no compulsory redundancies and, importantly, an end to toilets being emptied on to railway tracks?
In 2011, FirstGroup, which runs Great Western, avoided paying contractual premium payments to the Treasury by choosing not to take up its option of a three-year extension, but in January 2013, the Secretary of State abandoned the competition for a new franchise and simply agreed a renewal with First until 2015, and subsequently announced a second direct award running till 2019, thereby avoiding the inconvenience of a competitive bidding process. Have not the Government made a mockery of free market franchising?
I welcome the hon. Gentleman to his post. As I said last week in a transport debate, I hope he lasts longer than his predecessor—[Interruption.] I think there was somebody in between. The contract to which he refers did have a break clause for First, but it was negotiated by the Labour Government. Therefore, they caused that break and it was part of their contract.
I am pleased to be able to remind the hon. Gentleman of the words of Sadiq Khan, who I believe has an important role in the Labour party—I hope it is a very unsuccessful one in a few weeks’ time. He said:
“one reason we are able to invest record sums in our railway service is the revenues that the franchises bring in and the premiums that they pay”.—[Hansard, 1 July 2009; Vol. 495, c. 430.]
He said that when he was in a position of responsibility: that of Transport Minister.