Railway Franchises

– in the House of Lords at 11:12 am on 11th March 2004.

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Photo of Lord Bradshaw Lord Bradshaw Shadow Minister, Transport 11:12 am, 11th March 2004

asked Her Majesty's Government:

What weight is given to past performance when new railway franchises are being awarded.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, the Strategic Rail Authority must ensure that bids for franchises are evaluated on an objective and fair basis, and that the market is open to new entrants. It therefore concentrates on evaluating bidders' proposals for delivering the SRA's specification, train service performance and service quality on a value-for-money basis rather than simply awarding franchises to operators who have done well in the past.

Photo of Lord Bradshaw Lord Bradshaw Shadow Minister, Transport

My Lords, I thank the noble Lord for that reply, in so far as it goes. When railway franchises were first let, there was no track record. Many were let to companies which have failed, cost the taxpayer large sums of money and come back for more and more. Now that there is a track record, will the Minister please indicate to the House that at least the track record of a company, in delivering services, will be a significant feature in the award of franchises? Otherwise, much of the decision-making is made behind closed doors by the SRA against some very unclear criteria. One has a suspicion that the Treasury wants the lowest-cost franchise rather than the best value.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, that last suspicion should be laid to rest—best value is the criterion. I reinforce the point that I made in my original Answer: the process seeks to be as objective and fair as possible. In evaluating a company's responses to the questions properly addressed to it regarding the franchise, of course the added valuation of what the company is promising may be affected by its performance in the past. However, the important point is that all those applying for a franchise should be evaluated on clear and specific criteria, objective to all.

Photo of Viscount Astor Viscount Astor Conservative

My Lords, will the Minister explain why, as his Government wish to encourage long-term investment by the train operating companies in the railway network, they are limiting the franchises to seven years? That is far too short a period for a company to have long-term objectives. The Government could certainly extend the period of the franchise, subject to strict performance criteria.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, of the many representations that have been received on the general issue of how we manage the railways—there have been quite a few in the context of the railway review which is currently taking place—the particular point about the seven-year franchise does not come out with great sharpness. A balance has to be struck between the point the noble Viscount rightly makes about how long we should have a franchise in order to promote effective and efficient investment against the obvious point that it is necessary for the travelling public to have guarantees that service will be up to standard over that period of time or there will be the possibility of change.

Photo of Lord Monro of Langholm Lord Monro of Langholm Conservative

My Lords, on the West Coast Main Line, which is under the Virgin franchise, will the Minister tell us in what year the track will be upgraded so that trains can be run at full speed from London to Glasgow?

Noble Lords:

Oh!

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

Well, my Lords, everyone is well aware that the delays on work to the West Coast Main Line have put timetables back over the past few years. But we are now at the latter stages of the completion of the West Coast Main Line modernisation. We look forward to the point which the noble Lord emphasised when the new rolling stock, which is of very high standard and high performance, will be running at maximum capacity.

Photo of Baroness Platt of Writtle Baroness Platt of Writtle Conservative

My Lords, is the Minister aware that there is disappointment in the eastern region that First Great Eastern has not been awarded the franchise for a second time after a very good track record? It is not perfect—there is no perfect railway company—but it is very good. What are the reasons for that, given that the company has a good track record?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, as I have indicated, the issue was not whether the previous performance was satisfactory; the issue was which of the bidders looked to be able to guarantee the best performance in the future against the criteria. Another company was chosen because its bid was superior.

Photo of Lord Shutt of Greetland Lord Shutt of Greetland Shadow Minister, Northern Ireland Affairs, Deputy Chief Whip

My Lords, is the Minister aware that there is great concern on the east coast, bearing in mind that the franchise is up for renewal soon? It is generally perceived that GNER has been giving a good service and people are very worried that they will get something inferior in its place.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

Well, my Lords, they should not be. Loyalty to existing companies is much to be welcomed, although I would not say it is universal across the railway system. However, the only reason that that franchise would not be won by the existing franchisee is if a superior bid was in place to the benefit of all the travelling public.

Photo of Lord Hoyle Lord Hoyle Labour

My Lords, my noble friend seems very complacent about the West Coast Main Line. When will it be completed, and when will Virgin introduce completely new trains on that stretch, because what it is using at the moment is absolutely disgraceful?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, if I verge towards the positive and the optimistic, it is only because I am all too aware of the trials and tribulations of all passengers who have been using the north-west line over the past decade. I am struggling to avoid this metaphor, but I see light at the end of the tunnel. However, I am not able to give the exact length of that tunnel at the moment.

Photo of Viscount Goschen Viscount Goschen Conservative

My Lords, would the Government like Network Rail to take charge of the operations of more stations, as is reported in today's newspaper?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, we have received many representations about the quality of station provision, so we are examining that matter. We know that a number of our most significant stations are not up to standard. As the noble Lord will recognise, we are currently involved in a major review of the whole system, which will report in June or July, and that factor will be taken into account.