Railways: Update - Statement

– in the House of Lords at 3:49 pm on 29th November 2017.

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Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport) 3:49 pm, 29th November 2017

My Lords, with the leave of the House, I shall now repeat a Statement made in the other place by my right honourable friend the Secretary of State for Transport. The Statement is as follows:

“When Britain’s railways were privatised in the mid-1990s, it was against a backdrop of what many regarded as terminal decline. The radical Beeching cuts of the 1960s had been followed by further line closures under British Rail, and passenger numbers had been steadily falling since the Second World War—yet privatisation sparked a remarkable turnaround in the railway’s fortunes. Over 1.5 million more trains are timetabled each year than 20 years ago, passenger demand has more than doubled and other countries are now adopting Great Britain’s rail model in their own markets.

To support this growth and reverse decades of underinvestment in the infrastructure, we have embarked on the biggest rail modernisation programme since Victorian times. In addition to government funding, billions of pounds of investment from the private sector is also helping to renew and expand train fleets, upgrade stations and transform services across the country, and franchises are making an increasing contribution to the public purse—so the rail renaissance we are seeing in Great Britain today is the direct result of a successful partnership between public and private sectors.

This partnership has delivered real benefits for passengers for more than 20 years, but the success of privatisation has created its own challenges. As the number of services has increased, our network has become more and more congested, making delivering the punctual, reliable services that passengers expect more challenging. On much of the network our railway is operating on the edge of what it can cope with. It carries more passengers today than since its heyday in the 1920s, on a network a fraction of the size. When things go wrong, the impact can be widespread and quick, causing significant frustration for the travelling public.

That is why last year I announced plans to start bringing together the operation of track and train on our railways. This is a process of evolution and not revolution, and I said that the exact approach may differ from area to area, but the outcome must be the same: a railway that is predominantly run by a joint local team of people with an absolute commitment to the smooth running of the timetable, whether planning essential repairs, responding to incidents on the line or communicating with passengers.

Today I am publishing more details about our plans, an update on what we are doing and the steps that we will take to realise them. This publication, called Connecting People: a Strategic Vision for Rail, explains how we will create a new generation of regional rail operations with a relentless focus on the passengers, economies and communities they serve. It represents the biggest change to the delivery of rail services since privatisation. Although we have already achieved significant structural improvements, with joined-up working between operators and Network Rail, and Network Rail’s own transformation into a series of regional route businesses, the document explains our plans to go much further.

Where it delivers real benefits for passengers, many future rail franchises will be run by a joint team, made up of staff from Network Rail and the train company, and headed by a new alliance director. This will make the railway more reliable for passengers by devolving powers to local routes and teams, and ensuring that one team is responsible for running the trains and the infrastructure they use.

Today I am also issuing the invitation to tender for the next South Eastern franchise. This will, among other things, deliver longer trains, providing space for at least 40,000 additional passengers in the morning rush hour, and a simpler, high-frequency turn-up-and-go timetable on suburban routes, which will boost capacity and provide a better service to passengers. As part of that unification of track and train, the day-to-day operations on the South Eastern network will be run by a joint team led by a new alliance director, heading both the track and train operations. On the East Midlands main line we will also introduce a joint-team approach, bringing more benefits to passengers.

Honourable Members will know that the east coast main line has had its challenges in recent times, and I intend to take a different approach on this route. From 2020 the East Coast Partnership will run the intercity trains and track operations on the east coast main line. This partnership between the public and private sector will operate under one management and a single brand, overseen by a single leader, with a leading role in planning the future route infrastructure. Bringing the perspective of train operators into decisions on rail infrastructure will help ensure that passenger needs are better represented in the process. While we run a competition to appoint the East Coast Partnership members, we are in discussions with the existing East Coast franchise operator to ensure that the needs of passengers and taxpayers are met in the short term while laying the foundations for the reforms I have just outlined. I want the passenger to be central to train operators’ strategies. On some parts of the network, that will mean we will introduce smaller train companies.

I am today launching a consultation on the Great Western franchise, to seek views on how it can best meet the needs of passengers and communities in the 2020s and beyond. We want to establish whether it should be retained in its current form or divided into smaller parts with a more local focus, to best deliver for customers. We will also begin the process of splitting up the Thameslink, Southern and Great Northern franchise in 2021. When the two franchises were put together, it was intended that this would help the implementation of the £6 billion Thameslink upgrade investment programme, which is now near completion.

Despite the improvements in the railway since privatisation, we are still some way from achieving the modern, high-performance, low-cost and customer-focused industry we all want to see. That is why we must continue to reform and invest in the railway, and maximise the contribution that public and private sectors make to improving services. We must continue to deliver the biggest railways investment since the steam age, which the party opposite never did when it was in government. Getting to grips with industry structure will go hand in hand with investment in the infrastructure. We need new capacity to cope with growing demand and new links to support economic growth and housing development.

The Great North Rail Project is transforming journeys across the north. There will be faster, more comfortable journeys, new direct services and room for tens of thousands more passengers. Every single train replaced in the north of England is new or brand new—again, a change we never saw when the party opposite was in power. I now intend to invest around £3 billion in upgrading the trans-Pennine route to deliver faster journey times and improved capacity between the great cities of Leeds, York and Manchester.

In the south, flagship projects such as Crossrail and Thameslink are now coming on stream to provide the capacity to underpin economic growth. Our investment in HS2 will bring the north and south closer together, and bring benefits for people across the country. It is a new railway for a new era of rail—a bold and ambitious project. But if it were not for the ambition and faith in the power of rail to transform this country, we would have no railways at all.

Our vision rejects the mentality of decline that characterised the railway in the second half of the 20th century. To complement record levels of private investment, we recently announced government funding of up to £34.7 billion for the railway in the years 2019 to 2024, as part of an overall expected spend of around £47.9 billion. This will support an overhaul of the network’s ageing assets and other vital work and improvements. Passengers value reliability more than anything, and this commitment will help deliver that. We will also deliver new connections. We are establishing the East West Rail company to restore the lost rail link between Oxford and Cambridge—lost to passengers in 1967—and provide a major boost to the region. I expect construction work to begin next summer. We will look at other opportunities to restore capacity lost under the Beeching and British Rail cuts of the 1960s and 1970s where they unlock development and growth, offer value for money and, in particular, unlock the potential for housing.

Large projects and industry reform take time, but passengers want to see faster improvements in their day- to-day experience travelling on the railway. We do, too —and we are doing something about it. We are pushing to see smart ticketing available across almost all of the network by the end of 2018. We are improving arrangements for compensation and dispute resolution when things go wrong, including supporting the establishment of a passenger ombudsman. We are working with industry to extend the benefits of discounted rail travel to ensure that all those aged 16 to 30 can access appropriate concessions. We are investing in new digital technologies and better mobile connectivity, and are committed to improving the accessibility of the network and delivering a modern customer experience, open to all.

I know that the party opposite does not believe this, but privatisation brought a revolution to our railways. That is why there are twice as many passengers as there were 20 years ago. But now is the time for evolution to build on that success by joining up track and train, expanding the network, modernising the customer experience and opening the railway for new innovation. We have a vision of a revitalised railway used to its full potential by a partnership between the public and private sectors, supporting people, communities and the economy. We are taking real action to make that vision a reality. I am making copies of the strategic vision available in the Libraries of both Houses, while the Great Western and South Eastern documents are now on the website of the Department for Transport. I commend this Statement to the House”.

Photo of Lord Rosser Lord Rosser Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Transport) 4:00 pm, 29th November 2017

I thank the Minister for repeating the Statement made in the House of Commons. We welcome and advocate continuing investment in our rail industry and measures to enhance its role and importance in the economy of this country and in the lives of our citizens, including the reopening of some lines closed under the Beeching cuts.

The extent to which the content of the Statement and the associated strategic vision document will deliver those objectives is debatable. We have a Secretary of State who is very good at making grandiose statements about future rail developments—in fact, almost as good at doing that as he is in quietly announcing the abandonment or postponement of schemes that he has previously championed. No Government have cancelled or postponed more railway electrification schemes, or parts of schemes that they have previously espoused, than this one. On the roads, the policy is to reduce diesel mileage; on the railways, it is apparently to increase it above that previously planned. What is the Government’s strategic vision for rail in respect of the further electrification of our railways? I think the Statement was silent on that issue.

The Statement was pretty thin, too, on the issue of fares, as is the associated document called “a strategic vision for rail”. Fares have been deliberately and regularly increased by well above the rate of inflation in order to reduce the percentage of operating costs not covered by fares, and thus the costs to the Government, which they transfer on to the backs of commuters in particular. What is the Government’s strategic vision on fares? What is their objective in relation to the percentage of operating costs that should be covered by fares? How can you have a credible strategic vision without saying what your future intentions are in respect of the level of fares, fare increases in the future and the objectives that you are seeking to achieve and why?

The Statement made reference to the next South Eastern franchise and referred to providing space for additional passengers. However, that is not a strategic vision for addressing overcrowding in our railways. There are many other examples of overcrowding on our rail network, not solely in London and the south-east. Since the Government have chosen to describe their document as “a strategic vision for rail”, what are the objectives in relation to reducing overcrowding? What is the end game in respect of overcrowding and its elimination that the strategic vision is seeking to achieve? Just referring to new schemes, which may or may not be abandoned or postponed at some stage in the future, does not constitute a strategic vision against which success or failure in delivery can be judged.

The Statement set out proposals and intentions for tinkering with the organisational structure of the railways. It referred to a proposed alliance on the east coast main line, running intercity trains and track operation under one management. We had a similar arrangement between Stagecoach and Network Rail in the south-west, which did not seem to prove an unmitigated success. Why do the Government now think this proposed alliance will prove any more successful? What are the specific objectives that it will be expected to deliver under the strategic vision for rail?

As the Government thrash around to find an organisational structure for our railways and the train company franchises that they deem acceptable, they may care to look at the structure of the London Underground, which combines track and trains and has generated—in the public sector—significant increases in the numbers of passengers. It is also a system under which all the revenue goes back into providing and improving services for the travelling public, which cannot be said for our railway network as a whole. Indeed, so concerned was the Secretary of State about the success of Transport for London and London Underground in running services in the public sector, and the revitalisation of the London Overground network since it was taken over by TfL, that he felt it too politically dangerous to agree to the transfer of any further rail services within the GLA area to TfL—not much of a strategic vision there.

This Statement does not represent a strategic vision. It is silent on too many issues, including future fares policy, and silent about too many overall objectives to be such a strategic vision. It is, frankly, more a hotchpotch of separate announcements, some of them regurgitated, since they have been made previously and do not represent anything new. While I reiterate what I said earlier about welcoming new investment in our railways if it materialises, tinkering with the structure, which seems to be the Government’s modus operandi at present, will not address rail’s urgent organisational and ownership problems. Indeed, to the extent that making the structural changes proposed deflects the attentions of managers and staff from the objective of running reliable and efficient services, tinkering with the structure is more likely, in fact, simply to add to the problems.

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport)

My Lords, one thing on which we agree with the Government is that the answer to improving the railways does not lie in renationalisation. I am disappointed in this strategic vision. It is largely a restatement of existing announcements, some of which I recognise from the days of the coalition.

However, on these Benches, we welcome the commitment to assess transport projects on the basis of their potential for unlocking future growth, rather than on a simplistic assessment of current overcrowding and journey time saved. I want to ask the Minister about the announcement on reopening old lines, which had a lot of publicity this morning—but it is obvious that no new money is involved, as otherwise we would have been told. The reference in the Statement is to partnership with metro mayors. That is usually a code for saying that local government will foot the bill. What are the terms on which these proposals are made? Where will the money come from and how advanced are the plans, with specific examples in mind?

This week, the Minister replied to a Written Question from the noble Lord, Lord Berkeley, setting out total transport expenditure across each region of England. I am grateful to the noble Lord for asking the Question. The Answer, which I recommend to your Lordships, makes extraordinary reading. Capital expenditure in the last year is a total of £16 billion across the whole of England, £6 billion of which was spent in London. Only £520 million was spent in the north-east, and £666 million in the east Midlands. This entrenches the inequality and the divide in our society, and I am disappointed that this Statement does not provide new announcements on projects for the north and the Midlands that are desperately needed. What are the Government going to do to change that balance of spending within the country?

Finally, there is no reference here to electrification projects. The stalling of electrification and the abandonment of those plans was a huge blow to those poorer parts of the UK, including south Wales—west of Cardiff being an example. It is important that they are given the renewed investment that electrification with provide. That will also improve the quality of our air.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

My Lords, the noble Lord, Lord Rosser, asked how we will deliver these schemes. As the Statement announced, we have already provided up to £34.7 billion directly in government grant, we expect significant amounts of that to be spent on enhancement during the period, and the funding is provided within that grant to support that. We are also making funding available for early-stage development of the new enhancement schemes.

Both the noble Lord and the noble Baroness, Lady Randerson, brought up electrification. We understand that passengers expect high-quality rail services and, of course, we are committed to electrification where it delivers clear passenger benefits. We are also taking advantage of state-of-the-art new technology to improve journeys. The decision to cancel some of the electrification was made to deliver the benefits to passengers sooner than would otherwise have been possible. We are focused on using the best technologies to improve each part of the network, and will continue to do so.

On fares reform, of course we carefully monitor rail fares and changes in average earnings, and will keep them under review in calculating rail fares. The regulated rail fares are capped in line with inflation each year and for the next year. In the five years to 2019, Network Rail is spending more than £40 billion to improve the network. On average, 97% of every pound of the passenger’s fare goes back into the railway. We recognise that the fare system can be complicated, and the Rail Minister is working with the industry to consider what can be done quickly to help passengers find and choose the best ticket.

On overcrowding, obviously the expansion we are talking about today will help. HS2, once it is up and running, will take huge amounts of people off the overcrowded rail network. As I said in the Statement, the South Eastern franchise is a good example. We are hoping that it will provide space for at least 40,000 additional passengers in the morning rush hour.

The noble Baroness, Lady Randerson, asked how we will decide on the new rail lines and when they will be delivered. We of course want to work with partners in industry to develop the proposals for the next generation of those lines. We are developing guidance for investors and developers to ensure that the process for taking the proposals forward is as clear and transparent as possible. We cannot today commit to specific amounts or the timescale when the proposals are still in such early stages of development. The strategy refers to some of the potential ones, so we are aiming to take a sensible and measured approach, helping our partners to develop those proposals. As I said, we are funding schemes to help develop business cases.

The noble Baroness mentioned the north. We are investing huge amounts of money into rail in the north. For example, there is the £1 billion in the Great North Rail project to 2020, the train operators of Northern and TransPennine Express will invest over £1 billion in buying new trains and there will be more than 500 new carriages. The Great North Rail project has seen the journey times between Manchester and Liverpool improved by 15 minutes. In addition, we are working with Network Rail in the regions to develop options for major upgrades between Manchester, Leeds and York to provide more seats and faster journeys.

Photo of Lord Elton Lord Elton Conservative 4:12 pm, 29th November 2017

My Lords, the Great Central Main Line was closed under Beeching on the grounds that a consultation and survey showed that travellers preferred massively to use the parallel line going north. I was a passenger and commuter on that line during those years, and saw how the traffic on it was strangled by the huge reduction in efficiency, punctuality and cleanliness before the consultation took place. Before that campaign it carried a great deal of traffic, both long distance and commuters. Is reopening all or part of that line still feasible, or would it be considered now to be in competition with HS2, which would be a grave misjudgment?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

We are looking at every economic case for each of those rail lines, and as I said, we are working with partners to see whether an economic case can be made. Obviously, demand has changed significantly since the railway line was shut. I do not have specific details on that line but I can certainly come back to my noble friend on that.

Photo of Lord Berkeley Lord Berkeley Labour

I thank the Minister for repeating the Statement, and congratulate her on some of the things in it. Now is the time to see what can be and will be delivered. It sets out in a very positive way the contestability of some of Network Rail’s costs and how other contractors can do enhancements. I like the list of new openings and enhancements, some of which I have been involved in. I notice that something dear to my heart and that of my noble friend the Chief Whip is missing from the list—the reopening of the Lewes to Uckfield line. Perhaps the Minister can say why it is not included.

My biggest concern is the structural issue of the east coast main line, which is mentioned a lot in the report. It is easy to say that having the passenger and the Network Rail operators work together is a good thing, but there are open access operators and freight. I declare an interest as chairman of the Rail Freight Group on that line. The passenger figures for the open access operators on the east coast main line are very positive, so competition has brought benefits, not just to the traffic on the main line but to some of the other places served. Can the Minister explain how what the Government are trying to create as a big monopoly is going to protect the interests of the other open access operators and freight on a vital artery?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

As for the specific line the noble Lord referred to, the ones used in the strategy were just examples of lines that could be reopened; of course there are many others across the country. As I said, we will look into the economic case for all of them. On the east coast partnership, I acknowledge that the increased competition has led to increased numbers, but we believe that that suggested partnership between private and public ownership will be the best solution for the passengers. On freight, we think that joining up the track and train will benefit freight as well. We will ensure that those interests can contribute to the decision-making process on the franchising, and on the use of the rail lines.

Photo of Lord Framlingham Lord Framlingham Conservative

My Lords, I welcome much of what the Minister has said—but not, she will not be surprised to hear, the bit about HS2. This albatross of an infrastructure project is now forecast to cost over £100 billion. If that money were directed to the rest of the country—the rest of the regions and services that really need it—it would transform our railway system and get rid of a project that everybody now knows is completely discredited.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

My noble friend will not be surprised to hear that I do not agree with him on the benefits of HS2; nor do I recognise the £100 billion figure that he quotes. Our trains are becoming increasingly crowded, and that is why we need HS2. We have invested £55 billion in it, but that is not at the cost of other improvements in our rail network. The announcements we have made today will enable both HS2 and our existing railways to improve.

Photo of Lord Adonis Lord Adonis Labour

My Lords, I congratulate the noble Baroness on her appointment to the best department in the Government, the Department for Transport. I also welcome what she said about HS2 and east-west rail. Is she aware that when this House voted on HS2, it voted by a majority of 10 to one in favour of the project? That is a degree of unanimity that the House has shown on no other subject that I am aware of—besides its opposition to Brexit.

However, I find the Statement disappointing, because the document that the Government have published today is, essentially, a smokescreen, with all the blather about reopening Beeching lines—which, of course, is not going to happen. It is a smokescreen for a very big announcement, which is detectable only in the small print: that the Government intend to end the current east coast franchise three years early. They intend to do so—forfeiting hundreds of millions of pounds of payments that would have been made to the Department for Transport—in order, it appears, to bail out the two private companies that currently operate that route, in the guise of a public/private partnership that will do nothing other than excuse those companies from making the premium payments to which they were previously committed.

Does the Minister understand that treating private companies in this way in respect of contracts they have entered into will simply encourage other private train operators to try for the same kind of bailout? Is she aware that when I was Secretary of State we faced exactly the same pressure with the downturn in projected passenger numbers on the east coast main line, which led the then private operator, National Express, to ask us for a bailout, which we refused to give? It was as a result of that refusal that the east coast nationalisation took place: it was a huge success, and should not have been ended. Had the East Coast national company continued operating that line, the return to the taxpayer would have been significantly higher than we now face. Can the noble Baroness answer two specific questions? First, can she tell me precisely how much the taxpayer will lose in premium payments that are currently contracted under the new public/private partnership which she announced this afternoon? Secondly, will she undertake to publish all the communications between Stagecoach, Virgin and the Department for Transport which have taken place prior to the development of the strategy that she announced this afternoon?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

My Lords, I do of course recognise the noble Lord’s vast experience in this area but I am afraid that I do not recognise the description of the announcement today as a bailout. As the noble Lord will know, as part of the bidding Stagecoach made a series of financial commitments. It has met them in full to date and the Department for Transport expects it to continue to honour them. We will hold VTEC to its obligations and in the meantime will ensure that passengers are protected. The noble Lord mentioned the Directly Operated Railways solution. Since 2015, VTEC has contributed on average 20% more per rail period to the taxpayer than when the line was operated by Directly Operated Railways, and has achieved consistently high passenger satisfaction. It will have a rollout of new rolling stock in 2018. The choice today is not between OLR and privatisation. As announced, we are implementing the first regional public/private partnership on the route to deliver the best of both the private and the public sectors.

Photo of Lord Bradshaw Lord Bradshaw Liberal Democrat

My Lords, I draw three points to the Minister’s attention. On electrification, we had a meeting which demonstrated that the technology of the hybrid trains to which she referred may save some money and some face in the short term but will leave behind a trail of costs far in excess of those of electrification. Therefore, it ought to be considered very seriously. Secondly, I put in a word for CrossCountry trains along the lines of the reference made to Great Central. CrossCountry trains used to make much use of that route. In the new dispensation the Minister announced, will the significant success of CrossCountry trains in providing services across the country rather than to London be safeguarded? Thirdly, in the era of Dr Beeching, British Rail made a lot of money out of parcel traffic. It seems there is a new opportunity to harness the appetite for parcel services with delivery from terminals in cities by pollution-free vehicles, which could perhaps replace a lot of the vans that create both congestion and pollution chaos.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

I met the noble Lord recently to discuss electrification and we are seriously considering its benefits versus other options. We are trying to focus on the outcomes and what will provide better value quicker. As regards CrossCountry trains, the idea is that more railways will be opened up. I do not believe that will affect competition in relation to that company. On the noble Lord’s last point about parcels and freight, with HS2, as I said, and the expansion of the other railways, rail freight would be expected to increase.

Photo of Lord Lansley Lord Lansley Conservative

My Lords, my noble friend the Minister will know that increased communication opportunities between Oxford and Cambridge offer significant national economic potential. However, when will the public have an opportunity to look at, and be consulted on, the route of such a rail link between Sandy in Bedfordshire and Cambridge? I should declare an interest as a resident west of Cambridge.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

My noble friend mentioned East West Rail, which is a good example of our delivering on the opening of tracks. Since last year, we have been building up the team to work with Network Rail and the department to accelerate the permissions needed to re-open the route and reduce the cost. As part of that, there will be consultation with the people it affects.

Photo of Lord Darling of Roulanish Lord Darling of Roulanish Labour

My Lords, I appreciate that the Minister did not write the Statement—it is somebody else’s—but it contained a somewhat inaccurate précis of what happened to the railways after privatisation. There are two problems: one is that only central government is capable of providing the sustained level of investment needed to make the railways work. That dried up after privatisation. What the Minister referred to happened in the late 1990s and early 2000s, when investment started. The second mistake is to believe that the operation of track and rail could be fragmented. They are intimately connected, for obvious reasons, although that escaped the architects of the original privatisation.

On that point, I want to ask the Minister something. I welcome the idea that track and train should work closely together. It is not new; it started in 2003. I know that because I was there at the time, but I am glad that it is still being thought about 14 years later. On the point made by my noble friend Lord Adonis, what is happening on the east coast main line? Is the Virgin franchise continuing, or not? There is a real problem when we grant franchises to railway companies that come to believe that if it gets too difficult, or they do not want to do it, they can bail out and hand the keys back to the taxpayer. That is not acceptable and it needs to be stopped, so I hope the Minister will answer the noble Lord’s point. If she does not, that question will be asked again and again, because transparency is needed on what exactly is going on.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

On the separation of track and train, we acknowledge the benefits of putting together the operation of both those things. That is exactly what today’s announcement is all about. On the east coast partnership, as I said, the new partnership will come in from 2020, at which point the current franchise will be terminated. That was originally expected to happen in 2023. As I also said, we will hold VTEC to the obligations it made.

Photo of Lord Judd Lord Judd Labour

In the Government’s concern for the future, are they taking seriously the lessons to be learned from recent investment? I am a regular user of west coast rail services. How can we justify the level of expenditure in the new signalling system on the west coast, when delay after delay still occurs because of signal failure? What are we learning about quality of investment? On Cumbria, and the frequently loose talk about the north, specifically, what are the Government’s plans for Cumbria—west Cumbria in particular—and for real improvement in the communications between Newcastle and Carlisle?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

On the West Coast Partnership, I understand that passengers are benefiting from its new technology. Obviously, we want to see improvements in the passenger experience on the west coast services. On the detailed question on Newcastle and Cumbria, I am afraid I will have to get back to the noble Lord.

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

My Lords, I welcome the Statement. It is something of a counter-revolution. I remember sitting on the Front Bench, opposing the legislation that split operation from track maintenance. I am glad to see that after all these years, the lesson that track and operation go together has been learned. Will legislation will be needed to put these proposals into operation? That is important. Can the Minister say whether smart ticketing will abolish going online, to a railway station or to some agent to book a ticket? If those options are not retained, a lot of people will not able to travel by train.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

I thank the noble Lord for his recognition of the importance of integrating the track and train systems, which will obviously help to reduce delays and increase performance for the passengers. We will not need legislation to make these changes: they will be rolled out as the new franchises come up. We are driving forward the roll-out of smart ticketing so that, by the end of 2018, almost everyone will be able to buy smart tickets. They will be able to use their mobile phones, barcodes and smart cards. They will have the choice of travelling without a paper ticket but the paper ticket will still be available.

Photo of Lord Scriven Lord Scriven Liberal Democrat

Will the Minister clarify an earlier answer? Electrification, particularly of the Midland main line, is not at all in this strategy. If we are talking about faster, cleaner, cheaper and greener railways, electrification has its role. In answer to my noble friend, she said that the Government would look at electrification again. Is she giving a firm commitment that the Midland main line is being looked at again by the Government for electrification?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

As I said, we are making decisions on electrification. We obviously see its benefits, but our focus is on improving rail journeys and passenger experience as quickly as we can. In some cases, electrification would take many years and cause a lot of disruption. The noble Lord mentioned the environment. We have introduced the new, state-of-the-art bi-mode trains, which, while giving passengers more comfortable and quicker journeys, will also help the environment.

Photo of Baroness McIntosh of Hudnall Baroness McIntosh of Hudnall Deputy Chairman of Committees, Deputy Speaker (Lords)

Will the Minister have another go at answering questions put to her by my noble friends Lord Adonis and Lord Darling? She has conceded that the current franchise on the east coast will end three years earlier than originally anticipated. Can she tell the House—if she cannot today, could she please write to me—what the net cost is of that franchise being ended? That is, what money will the Treasury not receive as a result of that franchise being ended that it would otherwise have received?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

I will certainly have another go at that. The noble Baroness is quite right: the franchise was originally due to end in 2023 and it will now end in 2020 when the east coast partnership will take over. As I said, the current franchise owners have made a commitment and we will hold them to it. I will come back to the noble Baroness on costs.