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[Sir Nicholas Winterton in the Chair] — Sustainable Railways

– in Westminster Hall at 12:00 am on 12th February 2009.

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[Relevant documents: Tenth Report from the Transport Committee, Session 2007-08, "Delivering a sustainable railway: a 30-year strategy for the railways?", HC 219, and the Government's response, HC 1105, Session 2007-08.]

Motion made, and Question proposed, That the sitting be now adjourned.—(Steve McCabe.)

Photo of Louise Ellman Louise Ellman Chair, Transport Committee 2:30 pm, 12th February 2009

The Committee's report "Delivering a sustainable railway: a 30-year strategy for the railways?" was published on 21 July 2008 and the Government published their response to it on 20 October. The White Paper considered in the report sets out the Government's general vision for the railways for the next 30 years, as well as their specific strategy for 2009-14, as set out in their high-level output statement. At new year 2008, Network Rail's overruns at Rugby, London Liverpool Street and Glasgow Shields junction left thousands of passengers stranded and became part of the Committee's consideration, together with the White Paper.

The Committee took wide-ranging evidence from witnesses, including passenger representatives, transport groups, individuals, professional bodies, trade unions, statutory bodies, Network Rail, regional organisations and the then Under-Secretary of State for Transport, my hon. Friend Mr. Harris. We warmly welcomed the long-term strategy for growth—the first such strategy for many years—which anticipates doubling freight and passenger traffic from today's figures.

We noted that the strategy did not address structural issues in relation to rail and we were concerned by some aspects of the White Paper, including a lack of vision in relation to the absence of plans for high-speed rail and electrification, and a lack of integration with regional policy and other transport modes. We were concerned, too, about the performance of Network Rail and we did not feel that capacity issues were sufficiently addressed. We made serious comments on the proposals for the future financing of rail and their implications for fares and franchises. Those debates are continuing. It is pleasing to note that, not only since our report, but since the Government response was published, a number of steps have been taken that meet our requests.

I am pleased that the Government announced on 15 January that they were to establish a company, High Speed 2, to develop proposals for new high-speed lines from London to Scotland and to link the west midlands with Heathrow and Crossrail. They also announced plans for electrification. It would be helpful if we were told today what the position is on those two matters. Are we talking about proposals or feasibility studies, or about specific actions that are to be taken—and, if so, when?

We raised serious issues about Network Rail's governance and its lack of cost control. The Office of Rail Regulation's report on the 2008 new year overruns concluded that Network Rail had been in breach of condition seven of its network licence and a record £14 million fine was imposed. A range of problems was identified relating to site and supply management, continuity of skills and communications. Public anger about what had happened was compounded when, shortly afterwards, Network Rail chiefs awarded themselves major bonuses, including a bonus of more than £300,000 for its chief executive.

During our inquiry we received further evidence of an efficiency gap. Studies that had been undertaken found that when Network Rail is compared with other European companies, there is an efficiency gap in relation to both maintenance and renewals. The gap on maintenance amounts to £263 million per annum, and on renewals to £846 million per annum. Efficiency is important in cost control and in securing value for money.

We are concerned that the Government rejected our call to look again at Network Rail's governance. That is strange and at odds with the decision subsequently taken by Network Rail members themselves, who have now commissioned a review of how Network Rail is run. At the time we wrote our report, Network Rail was in dispute with the ORR over its budget for the next control period. That matter has now been settled and the budget has been set at £28.5 billion. It is therefore particularly important that Network Rail secure value for money and that there be effective cost control. We want the Government to take a more active interest in how Network Rail operates.

The report considered capacity in the rail service. We welcomed the increased popularity of rail, but expressed concern that the 40 per cent. increase in patronage over the past decade had led to overcrowding and that, following the proposals in the White Paper, the problem was set to continue. The White Paper set out proposals to deal with capacity problems—1,300 extra carriages, platform lengthening, Thameslink and Crossrail for London and major upgrades at Birmingham New Street and Reading—but we did not feel that they would solve the problem.

We felt that there would not be sufficient new rolling stock and noted with concern that most of the new carriages were destined for London and the south-east, making us wonder what was going to happen to the north. We were worried that feast and famine were set to remain in procurement, and about the absence of a commitment to addressing pinch points in the north, particularly the Manchester hub. We would like to know exactly what is being planned in relation to those areas. The Government subsequently announced that a number of carriages are to be brought forward, but we want to know exactly what is proposed in that regard, where they will go and how they will deal with congestion.

Photo of David Lepper David Lepper Labour, Brighton, Pavilion

My hon. Friend has mentioned London and the south-east and the extra capacity coming there, including, for instance, on the London to Brighton line. Does she agree that the train operating companies have a responsibility to ensure that, where they have that extra capacity and are able to make timetable changes, they take into account the needs of the travellers? I have had complaints from residents in my constituency that, although we now have more trains per hour on the London to Brighton line, regular commuters are disadvantaged because the new timetable adds perhaps half an hour a day to their commuting journey both ways from Brighton to London. There is a question of planning, even where the capacity becomes available.

Photo of Louise Ellman Louise Ellman Chair, Transport Committee

I agree with my hon. Friend. It is always important to consider the different needs of the travelling public and to ensure that their needs are met.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

Does the hon. Lady agree that, although David Lepper has a point, it is difficult to know whether the extra half an hour added on to the train journey in his area has been caused by the train operating companies or by the timetables dictated to them by either Network Rail or the Government?

Photo of Louise Ellman Louise Ellman Chair, Transport Committee

The hon. Gentleman makes important points and underlines the need for better integration of the rail service as a whole.

The report also concentrated on financing, which must be fundamental to the future success of our rail service. The Government propose a subsidy of £15 billion for the period from 2009 to 2014—a reduction on the previous period. The Committee expressed extreme concern that the sharp move away from operational subsidies would result in high fare increases. At the start of the new control period, half the Governmentsubsidy goes to franchise support. By the end of the period, it will be less than 25 per cent. As Greengauge21 told us, a change in the balance

"from roughly 50 per cent. passenger funding up to over 70 per cent." over five years would be too radical and too fast.

We were also concerned to see that funding was based on a 34 per cent. growth in passenger revenue, with fares income predicted to rise from £6.9 billion in 2009-10 to £9 billion by 2013-14. The Committee gave a warning and I should like to quote from this section of the report as it is relevant to what is happening today, as well as to our concerns for the future. It states:

"We are deeply concerned that the rapid shift away from taxpayer contributions and towards passengers paying a significantly larger share of the cost...will be detrimental to passengers and the future of the railways alike...if a full-scale economic downturn were to develop, passenger numbers are unlikely to grow as fast as projected...We therefore recommend that the Government review the planned shift between taxpayers' subsidy and the fare box with a view to pacing this transition over a significantly longer period of time."

It is now reported that perhaps five franchises are on what the Department calls a red light list. We know from experience over the past month that many fares have risen by up to six or seven times the rate of inflation. Our fears are becoming reality already. Will my hon. Friend the Minister tell us when he replies to the debate whether the Government have assessed the rate of passenger growth compared with the projections? What attitude are the Government adopting towards the train operating companies that are perhaps seeking renegotiation of franchises or abandoning them? Will train services be cut? I raised that issue with my right hon. Friend the Prime Minister at the sitting of the Liaison Committee this morning and I was very pleased to hear an assurance that services would not be cut, but that raises other issues about what steps the Government will take.

This is not just fantasy and people expressing fears. It has been reported that Dr. Mike Mitchell of the Department for Transport told the Public Accounts Committee that perhaps up to five franchises were on the Department's red light list. This is a real issue and we need answers to it. All these issues are ongoing. In fact, the Transport Committee is currently conducting an inquiry on fares and franchising. We shall report in due course.

I am very pleased that the Government's response did not end with their formal reply on 20 October 2008. I welcome the new announcements that have been made since that time, many of which are in line with our recommendations. I certainly welcome today's announcement about new trains. I congratulate the Government on their growth plan and on their ongoing actions. However, we need to ensure that environmentally friendly rail travel can continue to grow through the recession and beyond. I hope that the Committee's report, "Delivering a sustainable railway: a 30-year strategy for the railways?", will be a contribution to securing that end.

Photo of John Pugh John Pugh Shadow Minister (Treasury) 2:44 pm, 12th February 2009

I seem to be in the unenviable position of being the only Back-Bench Member present apart from Government Back Benchers—I am ringed by a series of enthusiastic trainspotters. May I say first what a good report this is and what respect I have for the Chairman of the Committee, Mrs. Ellman? She understates, in a very self-effacing way, her knowledge and command of the subject of railways. She knows the subject inside out. I served on a Committee with her some time ago and I was very impressed with her grasp of the subject and her ability. She does not resemble the previous Chairman, but she has many additional and important qualities. I share the same network as her, so I see the same problems on a regular basis. I also share her view about the lack of vision for the railway that exists, or has existed, in the Department for Transport.

Fundamentally, the report appears to be about capacity. There are clearly appreciable strains on the capacity of the railway system, with overcrowded trains and an inadequate service. Common sense tells us that we need new trains and new lines. Both relate to the theme of expansion, and expansion is extraordinarily difficult for the railway system. Procurement is a convoluted process. When I was serving on the Standing Committee that considered the Bill that became the Railways Act 2005, we considered umpteen clauses about how to close a railway line, but not a single clause about how to open one. When pressed about why that was so, the Minister dealing with the issue said that it was because everyone knows how to do it; it is fairly straightforward and uncontentious. In fact, it does not happen.

In my area, I suffer all the problems outlined in the report, which is why I was so keen to attend the debate. For example, the company that has the Northern franchise, which I brought to the attention of the Secretary of State in response to his statement earlier today, uses very old, possibly unsafe and certainly overcrowded carriages. It is absolutely disgraceful that mums and other people who get on at Manchester and are heading to other towns in Lancashire and who have paid good money for a ticket have to stand for long periods in rather dirty and unpleasant trains. When I have discussed that with the TOC—Northern Rail—it has said that it would like to improve matters but that it is handicapped because it requires the consent of various bodies, including the Department for Transport, before it can do so.

When it comes to rail expansion, Lancashire is a strange place. We are probably now subdivided into three or four basic city regions. There is the Preston city region, the Merseyside city region and the Manchester city region. People are now looking at the connections between the city regions; for example, those that might exist between Preston and the surrounding towns and Liverpool. Naturally, they have looked at where the routes intersect and they have found that there are two completely separate rail networks, which funnily enough coincide in a little town called Burscough, where a curve was taken out by the good Dr. Beeching. Restoring that link makes eminent sense from all sorts of strategic points of view, but it has not been done because it is infernally hard to progress; there are different transport authorities, we need the consent of a variety of bodies and we need to construct something mysterious—it is never quite made clear—called a business case.

Progressing rail capacity is an extraordinarily complex business. We need to tick various boxes. We need to line up a series of ducks. We need a high-level output statement on our side. We need regional and sub-regional plans, all co-ordinated and pointing in the same direction. We need funding in place, which is always a bit of a swine, and we need to present something called a business case. However, if we go to the Department and say, "What should a business case look like? Please show me a business case so I can model one for you," it will say that it does not have many that it can point to, because very few people have made business cases for railways extensions in the past 20, 30, 40 or 50 years.

Political leadership and direction are clearly needed, but we do not always get them, particularly when we have railway schemes that intersect between two politically different conurbations. Furthermore, Network Rail needs to support the proposal, but its line when people talk about expansion is normally, "Well, we will do it if we are asked to do it," but the organisation does not take a particularly pioneering view, even though it can often see a good case for one. To get the whole thing ready is extraordinarily problematic.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

I attended a meeting earlier this week at which there was discussion of the reinstatement of a line from Lewes to Uckfield. Norman Baker was very interested in that. The reality is that Network Rail was asked to draw up the business case, and surely that would be the way forward. It will do the business case for people and then they can present it.

Photo of John Pugh John Pugh Shadow Minister (Treasury)

It would be nice if Network Rail was always so obliging. Merseytravel is helping with the business case for the Burscough curve that I mentioned. We pursued that option because Network Rail did not seem as enthusiastic about the proposal. It did not suit its strategic objectives to the same extent as for Merseyrail.

The same problems occur when new carriages are wanted. There is an enormously convoluted and complex process. When rolling stock leasing companies were founded, they were management buy-outs. They were soon taken over by the banks simply because that was a safe way of making money. The banks have since found even safer ways of making money. [Laughter.] In the case of Angel Trains, Royal Bank of Scotland has sold out to Santander.

On the journey back to Liverpool that the Committee Chairman and I make on a regular basis, there are Pendolinos in which 75 per cent. of the passengers are squashed into 25 per cent. of the train because half of it is first class. Such a degree of idiocy would not exist in any ordinary well-managed or well-structured business. There is little excess stock. When the Secretary of State was talking about new stock and rail earlier, I used the words of the Committee report to ask what we would get in the north, particularly for the Northern franchise. His answer was that there was a general refreshing of stock. That is the answer I have received for years. It did not console me and will not excite my constituents.

My next comment might divide me from other hon. Members in the Chamber. There is a different frame of reference when anything in London is considered. I say that as a veteran of the Crossrail Committee. For years we listened to objections and to descriptions of the complicated engineering behind constructing a line below the most expensive real estate in the world. Despite that, there seems to be a classic business case for it. The same could be said of the Thames Gateway.

Things seem to happen in London. That can be argued for on two grounds. First, there is demand. Due to the buoyancy of the City, there was a case for getting the bankers from Heathrow to Canary Wharf even quicker—I am sure that is crucial for the economic welfare of society. However, the fundamental reason why we make the case for London so frequently is that so many people go to London; there is demand. But why do they go London? Because it is so damned difficult to get anywhere else. Anybody who goes on a cross-country train in this country has a disastrous, long, convoluted experience that they are not willing to repeat.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

I have a lot of sympathy for the points made by the hon. Gentleman. As the MP in the room with the most northern constituency, I too recognise the importance of improving rail links to London for the entire UK. Does the hon. Gentleman accept that the subject is a good example of the need for the nations of the UK to work together? The Barnett formula does not take account of expenditure on things such as Crossrail. Such things must be taken into account when people talk rather too rapidly about defects in the Barnett formula.

Photo of John Pugh John Pugh Shadow Minister (Treasury)

I agree that we should look at things in the round. Our rail network is set up so that almost all lines go to London. To get to the most peculiar places, people must go into London and out again. That is not typical of other European countries and it is not at all sane.

Crossrail has £15 billion of funding, including £5 billion guaranteed by the Government. That is in a different league. Just think what constituencies in any other part of the UK could do with the small change from that. The tea money for the builders would accommodate various schemes up and down the country. The Olive Mount chord in Liverpool is a classic case, where the aim was to get freight off the docks quickly. We had to struggle to put that in place. I do not believe that would have happened in Tilbury. It did not require an enormous public subsidy, but it took a long time to do it.

I am sure that the Committee Chairman will agree with my views about some of the Liverpool stations. To be honest, the main nodal station—where I shall be this evening at about 10.30 if I manage to get the train back—is an appalling dump. However, the Office of the Rail Regulator and Network Rail both say that it is not a priority and that there is no funding, even though Liverpool is the capital of culture and that is the main intersection. I do not believe that situation would prevail were the station in London.

I accept that rail is expensive. Under the structure we have, it is more expensive than necessary. Despite large sums of money being paid, some companies are not in profit. I was surprised at the Committee Chairman's comments on what the train operating companies told the Public Accounts Committee about their financial situation because I sat on that Committee and we were sworn to secrecy on those very data. I did not think that information had seen the light of day, but clearly it has.

There is a hidden subsidy with rail travel. However, there is a hidden subsidy for private transport for things such as roads and lights. Private transport also has environmental costs and congestion brings further financial and commercial costs. If all those factors are added up, there is a case for subsidised, effective railways. There is common ground on that, but I would go further. We will not get the right mix or a result that satisfies many people in this country if a centralised, London-centric view is taken of the transport network. I am aware that some people in the Department for Transport will shake their heads wisely and sadly, thinking that I am naive and wrong. However, there is no evidence from the last 10, 20 or 30 years that people in the Department for Transport have got the railways right at all.

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley 2:56 pm, 12th February 2009

May I do something that I have never before done in this House, Sir Nicholas? I apologise to hon. Members that owing to a prior commitment, I will have to leave before the end of the debate.

When the Select Committee considered the White Paper and the Government response to the report, there were conflicting sets of statistics on the railways. One set was put out freely and regularly by the Government, because it makes a good case; they were less keen to publicise the other set.

The good story is very good indeed. Over the past 17 years, passenger journeys have risen by 52 per cent. and passenger miles by 47 per cent. to their highest numbers since 1945. Those who use the west coast main line will know that it has become more reliable and faster, and the trains are better. We have benefited from £8.5 billion-worth of investment. The public performance measures of 89.9 per cent. are the best since those measures were introduced. We hear statements about such things from Ministers regularly. Today, the Secretary of State announced investment in rolling stock for the west country and the east coast main line.

The other set of statistics shows that we have the highest fares in Europe at twice the level of German fares and four times that of Italian fares. Whether comparing standard fares, which used to be known as second-class fares, or first-class fares, the ratios are about the same. To put that in context, a first-class rail fare from Manchester to London would buy an air ticket to Singapore or any European capital. That is extraordinary. A standard second-class fare would buy a flight to most European capitals from Manchester airport. That puts into context the high level of fares. As my hon. Friend Mrs. Ellman mentioned, they are still increasing above the rate of inflation. That is not surprising because it is Government policy to transfer the burden of transport from the taxpayer to the fare payer. Unless there is a change of policy, that will get worse.

I mentioned that the west coast main line is now excellent. I have not checked every route, but on the rest of the Northern rail system the timetables are slower than when Gladstone was MP for South Lancashire, which is part of Manchester. In some cases, routes are slower by factors of 30 or 40 per cent. It is easier, as suggested by Dr. Pugh, and sometimes quicker, to get from Doncaster to London than from Doncaster to Manchester. That is an extraordinary state of affairs. Some statements indicate that that might change, but the White Paper makes no plans for electrification or high-speed rail.

The Committee feelings about the White Paper are best summed up by Brian Cook, a witness from London, who said that the proposals to cater for the increase in demand between now and 2014 would not relieve the overcrowding; the extra capacity would provide only for the extra passengers. We agreed. As my hon. Friend the Member for Liverpool, Riverside said, the Government's response, particularly for the period after 2014, for which they are trying to put some structure into their proposals, was overcautious and not integrated, and its ambitions were modest.

How and why were they modest? The Government will invest the money where there are overcrowding problems on trains. As I said to my hon. Friend the Minister yesterday at the Transport Committee sitting, that is a profoundly reactionary policy. It means that investment in transport will go only where investment has already been made. In this country, that means London and the south-east. Whether in aviation, roads, trains or light rail, investment in new transport links has a dynamic impact. That vision is what the Government missed in the White Paper, particularly for the period after 2014.

Photo of Paul Truswell Paul Truswell Labour, Pudsey

Before my hon. Friend moves on from that point, does he accept that overcrowding in some parts of the country, such as West Yorkshire and my constituency, matches that found in the south-east? Some of us cannot follow him all the way down the route that he is taking.

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley

I agree with my hon. Friend. In fact, the rate of increase in overcrowding on commuter trains into Leeds, Manchester and Birmingham has been growing at twice the rate in London. However, despite that fact, the investment will go to the south-east. The first 1,100 new carriages will end up in this region. That is why I say that the policy is reactionary. We should consider the hard-headed figures; what we used to call pounds, shillings and pence but is now usually billions of pounds. Every candidate in the London mayoral election boasted of the £40 billion that would be invested in the London system—Crossrail, Thameslink, the new links to the Olympics and the PPP scheme for the tube. The total being invested in transport in Newcastle, Liverpool, Manchester, Birmingham and Leeds would come to only a small percentage of that.

Photo of John Pugh John Pugh Shadow Minister (Treasury)

To reinforce that point, a sane way of replacing carriages—we applaud the decision on the new carriages—would be to replace the oldest first: to look around the country, find out where the oldest ones were and take them off the rails as quickly as possible. That is clearly not the strategy, though, is it?

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley

It is not. It would be a good strategy, as it would stimulate industry and the economy as well as improving the transport infrastructure.

One can imagine how aggravated we were—irritated is probably a more accurate word—when, after the final announcement was made in October 2007 of the investment in Thameslink, it was announced there would be another study into the Manchester hub. I have lost count of the number of studies there have been. I am not cynical about Ministers coming to Manchester to make an announcement about a study when the huge amounts of investment in Thameslink had been announced; nevertheless, it was a cynical move.

Previous studies on the Manchester hub have shown what the problem is. It is a question of taking a decision on how to deal with it. There are 11 lines coming into Manchester Piccadilly, and investment in extra capacity is needed, either by putting extra lines above platforms 13 and 14 or putting in extra curves. The capacity problem can be solved. It will be an expensive business, but it will cost only a fraction of the money invested in the south-east. We should be getting on with the job.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I agree with my hon. Friend that it is not a question of taking money from London and the south-east and putting it somewhere else. His case for there being proper investment in rail networks in the north-west and other parts of the country is well made and should be supported. It is not a question of taking from London but of putting money into the whole rail network. He was right to say that the argument made at the time of Beeching was that everything should be London-centric. That, among other factors, is where Beeching was wholly wrong.

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley

My hon. Friend makes a good point, but he cannot help it if those from the north gaze rather enviously at the investment being made in the south-east.

I believe that we should get on with the Manchester hub. Although it is called the Manchester hub, to take those bottlenecks out of the system will help to deal with congestion in Yorkshire, Cumbria, Lancashire and the midlands. It will enhance the entire railway system.

I have some specific questions for my hon. Friend the Minister. I cannot make out from the high-level output specification whether the enhancements to Manchester Victoria station, and Salford Central and Salford Crescent stations, which form the simple part of the Manchester hub scheme, will take place in the specified period.

We heard a great deal about aged rolling stock from the hon. Member for Southport. When work starts on the Metrolink, on the Oldham and Rochdale line in north Manchester later this year, I seek a guarantee that there will be no loss of capacity or of carriages and rolling stock from the Greater Manchester area. We have been told that the Department for Transport has decided that even if the rolling stock on that route is not taken away but put on the Bolton line, other rolling stock would be taken away, yet Bolton MPs tell me that the commute from Bolton is shocking and that passengers cannot board the trains.

I refer again to the Transport Committee's discussion yesterday with my hon. Friend the Minister. That took us back to the debate on investment in the north and the south. I understood my hon. Friend to say that I was wrong when I spoke of a per capita expenditure on transport in London and the regions, so I checked London's figure against those for the Manchester area for 2007-08. London's figure was £667; Manchester's was £292; and for the north-east it was £244.

I accept—I wish I did not have to—that London is the capital city and that when it comes to education, health and transport, London has greater cost and that it will cost more to invest there. However, over the past 10 years, the gap in expenditure on transport in the regions and London has grown. As a Labour Government have brought overall expenditure up, in education and health it has risen at more or less the same rate, but in transport it has not. The gap has got wider.

We are now in many ways at a more interesting time in the history of railways than we have seen in the past 20 years. There are fantastic passenger figures, and the team of Ministers at the Department for Transport shows real imagination and vision, with talk of bringing in high-speed trains, which virtually every Secretary of State since we had a Labour Government has ruled out, and about electrification. That is to be welcomed. However, we are also hitting a recession, and I have some questions for my hon. Friend the Minister.

After the Public Accounts Committee hearings the Select Committee heard again from the train operating companies that the Department has given red lights to five train operating companies. I should like my hon. Friend to tell us, either at the end of the debate or in writing, what criteria are used for giving red, amber and green lights to the train operating companies. I should also like to know—as I am sure other hon. Members would—what action he will take if the companies fail in their franchises. They have been circulating papers around the train operating companies saying that for their failure they want to be released from their obligations on fares—to be able to put them up higher than they would under the RPI plus 1 formula, which I think is what is used. They want to cut carriages and they want to run the franchise on a completely different basis.

I do not know what my hon. Friend will say, but my advice to him is that if those franchises fail he should seriously think about putting in a publicly owned operator of last resort, so that within the rail system we can compare what a publicly owned train company would do, given that in providing a good service it would not have to make the excessive profits that some of the main transport companies have made. If he cannot do that, if the train operating companies default on their payments, and if he allows them to continue running those franchises—it is a question of billions of pounds, including a £1 billion payment expected from South West Trains and £1.25 billion, I think, expected from the eastern line franchise—the taxpayer, the public and the Government should get an equivalent stake in the equity of those companies for that failure, so that there is real public ownership.

Will my hon. Friend name the five companies that have been given a red light? It is claimed that that is commercially sensitive information, but the knowledge that there are five such companies is potentially damaging to all the train companies. It would be helpful, from the point of view of democratic accountability, as well as commercially, if we knew which companies were in trouble, and against which criteria.

Just under 10 years ago I took part in a debate in the House with Teddy Taylor, who was then the Member of Parliament for Rochford and Southend, East. We were arguing about the original privatisation of the railway. My contention was that the railways had been sold too cheaply and the public purse had been cheated. He argued that although that might be the case, the railways would cost the public sector nothing after 2000. There is about £25 billion of public debt on Network Rail's balance sheet. The privatisation has cost the public purse a great deal of money. We need to make two decisions: first, to acknowledge that the public sector would probably be better at running the railway; and secondly, that the governance of Network Rail, by which its board in effect chooses its shareholders, to whom it is accountable, should be changed. I can think of no other structure or organisation that is set up on that basis. The £20 billion of debt locked up there—which is our debt, as representatives of the taxpayers—should give us all the more control, as far as starting to have a publicly owned railway.

The report that we are debating is the second major report on the railways by the Committee in four years. The first was called "The Future of the Railway". Its conclusion was that the structure of the railway at the time was "not fit for purpose". There has been some slight change. Network Rail is better than Railtrack and the Strategic Rail Authority has gone; but there is nothing in the operation of the railways in their fragmented form that makes them fit for purpose now. More public sector control would make a better railway system.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

A lot of hon. Members want to speak, and I hope to include them all. There are also the Front-Bench spokesmen and on a major debate such as this I like to give the Minister a quarter of an hour to reply, so I hope that hon. Members will be disciplined in their remarks.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith 3:17 pm, 12th February 2009

I shall certainly try to follow your injunction, Sir Nicholas. I congratulate the Select Committee on its report, which makes some very pointed comments, and the Department on the White Paper. It has many good points, and we will all welcome today's announcement, which shows a clear wish to start to deliver on the 30-year strategy.

Inevitably, in a debate such as this, it is tempting to concentrate on one's own constituency shopping list. That is not a habit that I intend to break entirely today; I shall come to my shopping list in a second. However, as many rail issues are devolved, I shall deal only with those that are dealt with UK-wide. That will also allow me to deal with some of the broader policy issues behind the report and the White Paper.

To take the local dimension, long-distance rail is particularly important for my seat of Edinburgh, and for many parts of Scotland. It is important for Edinburgh because of the essential role that a good long-distance rail service plays in the tourism industry. In the current climate, it is more important for tourists to be able to get good fast rail access from the south to Edinburgh and elsewhere in Scotland and the north. It is important for business and for the many people with private reasons for travel, including study or visiting their families. That is one reason why I reiterate my welcome for today's announcement about the new faster trains, which will benefit the east coast main line when they come into operation.

As I mentioned in my comments on the statement earlier today, the new rolling stock allows opportunities for faster journeys between Edinburgh and other places on the east coast main line and London. That is essential if we are to have the full advantage of the new rolling stock. Those of us who travel on the line know that average train times have increased, not decreased, over the past 20 years. With relatively small improvements in tracks and in the lay-out at key pinch points, the new rolling stock will allow for considerable improvements in train times, which will be important for existing travellers and in attracting travellers to rail from air and road travel.

For Edinburgh, and anywhere else north of London, the long-term prize will be the development of high-speed networks, which is why I welcome the commitment in the White Paper to that network and the recognition that building separate lines, rather than forcing very high-speed networks on to existing lines, is the way forward. Having said that, there are still things that we can do in the medium term to improve long-distance rail lines. We should not lose sight of those possibilities as well.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

In an intervention, my hon. Friend mentioned the Barnett formula. After a high-speed line reaches Carlisle and enters Scotland, whether on its way to Glasgow or Edinburgh, how is it funded? Are they UK funds or do they come from the Scottish Parliament?

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

If I have time, I shall try to deal with that question, although I suspect that it is more for the Minister to answer—I am sure that he looks forward to doing so.

We need not only faster journey times, but more frequent and later journeys—for example, the last train from London to north of Newcastle leaves at 6 o'clock, which is not useful for many people, especially Members of Parliament. Faster journey times are important, but we should not have to wait for high-speed lines from London to Edinburgh, or to Carlisle on the way to Edinburgh—should that route be chosen.

Even without faster journeys, however, we can make full use of possible improvements in the rail system. For example, better use needs to be made of the trains themselves. My hon. Friend Graham Stringer was right to compare UK fare levels with those in many continental European countries. Current UK fare levels with not result in the desired shift to the rail network. When that point is raised with Ministers, reference is made to the fact that if they are booked well in advance, very cheap train tickets for long journeys can be obtained, which is true. However, sometimes, particularly for journeys booked at short notice, it is much cheaper to fly than to travel by train. Bizarrely, trains will sometimes have many empty seats, even though tickets were being sold at the full price a few days before. At the very least, that suggests that the system for selling tickets is not flexible or efficient—compare that with some budget airlines where prices very much depend on the number of available seats. There is something wrong with the way that those train tickets are being sold, which needs to be addressed by the Government and those responsible for regulating the industry.

A point was made about the improvements on the west coast main line. The Government deserve credit for the £10 billion—I think—invested in bringing that line up to standard, which has already brought many benefits south and north of the line. My hon. Friend the Member for Manchester, Blackley mentioned local services such as Doncaster to Manchester. One of the difficulties with the west coast main line is that we do not make full use of the opportunity to provide improved and faster services on routes from Edinburgh—although this is true generally of central Scotland—along the west coast to places and cities in north-west England and the west midlands. It is true that services on the east coast main line are generally good and fast—although I would welcome further improvements—but on the west coast main line, despite many fast services from Glasgow southwards, few direct services from Edinburgh are provided. Where direct services are provided, times are unacceptable—it normally takes longer to get from Edinburgh to Birmingham than from Edinburgh to London, and it takes almost as long to get from Edinburgh to Manchester as from Edinburgh to London. It is not possible to get a direct train from Edinburgh to Liverpool: if unlucky, one might be sent on a 10 or 15-minute walk across Wigan to catch a connecting train. Very few train services run from Edinburgh to Leeds.

My story about Edinburgh could be told of other services from elsewhere in Scotland. As my hon. Friend pointed out, that represents a phenomenon that might apply to other parts of the country. Furthermore, such services, of course, compete with air services. For all sorts of reasons, it should not be attractive to anyone or necessary to undertake a journey from Edinburgh to Liverpool, Manchester, Leeds or Bradford by plane, yet many people have no alternative but to do so, because the rail services are not provided.

There is a gap in the focus of the Government and, to some extent, of members of the Select Committee. I wonder whether that relates to some of the points raised by my hon. Friend Mr. Martlew about the way in which rail policy in England is integrated with cross-border services, which I believe remain a reserved responsibility of the UK Government. Rail in Scotland, including the sleeper services, is devolved, which I am in favour of. However, cross-border services throughout the UK are not given as much attention as they should in regulation by the UK Government. It is time for that situation to change.

I shall give one or two brief examples of how that attitude is reflected in the White Paper. Page 17 contains a map of England and Wales. It reads:

"England and Wales have a well-developed network of strategic roads and rail links".

However, it does not go north of the border, which to a degree reflects the focus of the report. Someone may rightly point out that other maps in the White Paper show the whole of the Great Britain and its rail services—but they would be proving my point. For example, page 61 contains a map showing inter-urban service loading levels over future years. The lines from Edinburgh to Liverpool and Manchester and Leeds do not even appear. That reflects the kind of thinking that lies, in some places, behind the report.

Page 21 of the White Paper states rightly:

"With certain exceptions...rail policy is a devolved matter in Scotland".

The next paragraph reads:

"The Government believes that the issues and trends raised in this strategy have important linkages with Scotland" and that on them they should

"work closely with the devolved administrations".

That is true, but there is a danger in abdicating responsibility for Great Britain-wide services, when in fact there is a UK Government responsibility in such areas. I recognise much good in the White Paper. I am very enthusiastic about this morning's announcement, and I recognise what has been done on the west coast main line. However, we need to consider cross-border services, and services in the central belt to the central and northern England region. These are major conurbations, not just small centres of population and they need more attention in the rail strategy.

There may be a lack of focus because the two Administrations differ over the way in which they apportion responsibility for rail services. Services that run throughout Great Britain are the responsibility of the UK Government. Clearly, there must be co-operation between the Scottish and UK Governments. As someone who sees the benefits of a United Kingdom as opposed to those with a nationalist bent, I believe that we must address the issues across the UK. Will the Minister tell us how he will work with the Scottish Government to ensure that we address the UK-wide issues, the most important of which is how we can fund high-speed lines north of the border? I would have thought that because such a scheme is a UK-wide responsibility, it should be a UK-wide issue. Just as I was happy to see the funding for Crossrail provided from the UK purse, I hope that my colleagues further south will also be happy to see rail services throughout the UK also being funded from the UK purse.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North 3:31 pm, 12th February 2009

I welcome the debate and the discussions that we are having. Before I go into my own speech, I want to put on record the fact that many of us spent years under the previous Government opposing rail privatisation and continual rail cutbacks and closures. Since the Labour Government came into power in 1997, there has been a pro-rail strategy as a whole, which is sometimes all too easily forgotten. We should remember the miserable period of privatisation and what went on before that. This debate is important because it gives us the opportunity to look towards a better rail strategy for the future. In that sense, I welcome the work of the Select Committee and what it is trying to do.

A number of hon. Members—not from London—have spoken with great envy about investments in London. I can understand that, and I have sympathy with their position. The problem with the rail network goes back to its original development, which was essentially about building main lines from London to the rest of the UK. It was compounded by the enormous Beeching cuts in the 1960s. Essentially, Richard Beeching called for the preservation of the most viable sections of the railway, which were London, the south-east and the south coast commuter belt, and implied that the rest of the country should go hang itself. Later, scorched earth policies were developed within Departments, which included the extreme proposal to close all railways north of Birmingham, and we are still living with that. I hope that the Minister will give us some good news on the issue of major investments in essential railway hubs, such as Birmingham, Manchester and Newcastle, and in overall rail developments.

I have a couple of general points concerning the overall financial strategy for the railways. As I have said, I welcome investment in the rail network. It is important and has long been needed. Essentially, we are catching up on the levels of investment that have already happened in most western European economies. Germany, Belgium, the Netherlands and France have all invested far more in railways and have a far better rail system as a result. Nobody has adopted the model that we have in this country, which is one of pouring public money into the infrastructure and then franchising the rail operations out to particular companies, which then make large profits out of it. When they get into difficulties they come to us as the taxpayers' representatives to bail them out even more. I find it utterly astonishing that after having signed up for lucrative contracts, some of those companies have the brass neck to expect the public to bail them out during an economic downturn. As my hon. Friends said, now is the time to consider having public ownership of not just Network Rail but the franchises as they come up for renewal, so that we, as the public purse, get the benefits of them and are able better to control what they do.

On 27 January, the Secretary of State was sent a letter, which was signed by all three rail unions—ASLEF, the National Union of Rail, Maritime and Transport Workers and the Transport Salaried Staffs Association. The unions talked about the loss of jobs in the railways. They called for the creation of jobs through major infrastructure projects, which was mentioned in the Prime Minister's jobs summit. The letter says:

"Against this background it is therefore astonishing that the rail industry, which is heavily dependent on taxpayers' subsidy and based on a number of contractual relationships with Government, is being allowed to announce widespread jobs losses and is making strategic decisions which will result in further job losses. It appears that in effect the Government is subsiding redundancies in almost every sector of the rail industry."

The letter then outlines a number of concerns. It says that

"in the name of efficiency savings Network Rail are cutting the frequency of track inspections and routine signals maintenance."

The unions said that they were deeply concerned with the reduction in renewals work and the cumulative effect that that would have. They said:

"We fear conditions are being created which could lead to another Hatfield, Potters Bar or Grayrigg."

They then ask why, if they are putting all this public money into the railway system, they are not getting a return on it.

Then there is the issue of the large increases in rail fares. The companies that are increasing fares to raise money for investment are also turning in quite astonishing profits. For example, Arriva's operating profit in the six months to June 2008 was £14.8 million, and its interim dividend was up 10 per cent. FirstGroup's profit in the six months up to September 2008 was £48 million, and its interim dividend was up 10 per cent., in which it paid out £55 million in dividends. Go-Ahead Group's operating profits in the 12 months to June 2008 was £77 million, and £48 million was paid out in dividends. National Express turned in £28 million profits in six months and paid out £40 million in dividends. Stagecoach turned in £31 million in profit and a 33 per cent. increase in dividends and £29 million was paid out in equity dividend at the time. Those are serious issues. If the rail companies are to be allowed to get away with putting up their fares to this level, we should be in a position to control what they do and the level of profit that they pay out, which is clearly not going into investment.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

The hon. Gentleman has read out the companies' operating profits and dividends. Will he tell us which franchises get a direct subsidy from the Government for operating? Does he not accept that the bulk of the subsidy from the Government goes into Network Rail?

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

The bulk of the subsidy obviously goes into Network Rail, and a number of the franchisees get direct subsidies for particular services at particular times. My concern is that we are putting in a vast amount of public money for which we are not getting the best return.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

Is not the point that has been made spurious, to the extent that if the money did not go into Network Rail, the Government would charge the companies a lot more for running on the track?

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

My hon. Friend is absolutely correct. He is thinking of the enormous public investment that has gone into west coast main line and east coast main line and all the other infrastructure developments. That should be seen not as dead money but a good investment in creating both jobs and work and a good transport infrastructure. If such transport infrastructures then run profitably, the public should benefit from the profit, which is the whole issue about public investment and public development.

The report mentions the new north-south high speed line, which I strongly support. Although it will require a huge amount of investment, it should not stop in the midlands; it needs to go much further and include a link to Scotland because that will help to improve rail links throughout the country. I also want the Minister to address the issue of the reopening of various lines. The Scottish Parliament and the Welsh Assembly have a very good record of successfully reopening a number of branch lines, such as Bathgate and part of the Waverley line in Scotland and a number of links in south Wales. They are very welcome, and well done to them for doing it. In most cases, they have been successful. When campaigns in England to preserve and reopen lines have been successful, the lines have by and large been very profitable and brought a lot more people into rail usage. I remember the great campaigns to prevent the closure of lines in England that eventually became successful.

However, some short bits of line could be reopened to improve east-west freight and passenger usage, and thereby the development of an east-west corridor. Railfuture mounted a campaign for the reopening of various sections of the east-west line to provide a good link from the east coast to Oxford, and from there to the west country. That mainly requires the reopening of the disused Bletchley to Bicester link, which would not be particularly expensive. The track bed is there and, indeed, the line has never been closed. I hope that the Minister tells us that the idea is further forward and that there is a plan to develop an east-west link, and that he will not simply say that he is looking at the potential of another business case. Reopening the line will help to bypass London, improve cross-country rail links, and take a lot more freight off the roads and on to the railways where it ought to be. It would not be particularly difficult, and I hope that we get some good news about it.

I am a bit nervous about raising the issue of London's railway systems in this company, but I am prepared to be bold on this occasion. There seems to be some difficulties in the relationship between Network Rail and Transport for London on the development of London Overground. In some cases, much needed investment does not happen because it is not clear who is ultimately responsible for it. I hope the Minister will give us some good news on that.

On the operation of the franchise companies, First Capital Connect, which essentially runs commuter services in and out of London, has just announced that it is going to close a lot of ticket offices and take staff out of stations. It will cut opening hours altogether at 47 ticket offices and, according to the TSSA, reduce opening time by 500 hours between Monday and Friday. That means that my constituents who use Finsbury Park or Drayton Park stations, for example, will find that there is a shortage of ticket sellers—presumably, there will be less inspection too—so they will be totally reliant on machinery to buy tickets, and to enter and leave the station. Consequently, they will confront the very serious safety issue of unstaffed stations, particularly in the evenings. I recognise that staffing stations incurs a cost, but there are two very big costs incurred by not staffing stations: first, increased crime; secondly, fewer people will use the trains because they do not feel safe on them.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I absolutely support what the hon. Gentleman is saying because I have exactly the same problem in my constituency. It might surprise him to hear that I was due to have my photo taken with TSSA officials last week at Haydons Road station because of the closing times there. I am sure that many people, including my constituents, welcomed Lord Adonis's intervention to stop South West Trains closing station ticket offices, but I am afraid that using the same criterion could be Trojan horse for more closures. Apparently, the criterion that has been given to South West Trains is that ticket offices must have more than 12 transactions per hour or he will allow them to close later in the year.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I agree with the hon. Gentleman on that and hope that he can sign early-day motion 580 on First Capital Connect. Clearly, there needs to be a lot of pressure from constituency MPs on the company to protect those jobs and the safety of those stations. The loss of the staff positions and the associated danger is very serious.

I hope that First Capital Connect will also be more imaginative about station development. I have just received a letter from the company about the future of Drayton Park station. The station is almost within the curtilage of the Emirates stadium in my constituency but, apparently, there is no rational business case for the development of the station. It is closed on match days to ensure that no one can use it, which many people find slightly absurd, to put it mildly. The company needs a bit more imagination in its operations and how it wishes to develop its interests.

I shall make my final two points briefly because other hon. Members want to contribute to the debate. The first point is on the development and electrification of London Overground. Network Rail has just announced that it is putting £326 million into the upgrading of London Overground—I received a letter from the company yesterday. London Overground essentially runs services as an arm of TfL. I will welcome the improvements in the services, tracks, points and signalling and all that goes with it, and the development of a truly integrated transport system around London. However, I hope that the Minister will give me some good news on the electrification of the Barking to Gospel Oak section of the north London line, which I raised in an early-day motion and in meetings with him. That would mean that the trains could use the rest of the north London line, and make it possible to use the track as a freight bypass route. Freight bypass traffic cannot use that section of the line without changing locomotives from electric to diesel at either end of the section. That is a very inefficient way of running the railway. Investment in the electrification of that stretch of line would have enormous benefits. If the Minister cannot give me some good news on that today, I hope that he will write to me in future about it.

My second point is a constituency point, but it says something about the integration of transport in London. Various hon. Members have unkindly said that there could not be a dirty station in London because it would get sorted out straight away. Sadly, that argument simply does not apply: I live in Finsbury Park, and I use Finsbury Park station almost every day, and it is a mess. It is badly laid out and designed. It has been the subject of competing interests between bus companies, Railtrack, Network Rail, several rail franchises, TfL and London Underground. Nobody can agree what to do. Every time we get three ducks in a row, one falls off and another appears, so we never get agreement on undertaking the necessary overall improvements.

Sadly, one of the first things that the new Mayor of London did was to cancel the previous Mayor's plan to introduce step-free access for the whole station, which I think is outrageous. The station needs a full refurbishment. It needs lift access between the underground, street and main line levels. That would improve things and make the station safer. Plans have been developed endlessly, and some in TfL have worked very hard on them. I would be grateful if the Minister intervened. He could hand the whole station over to TfL to manage, administer and develop rather than endure the endless, futile argument between Network Rail and TfL, and make the station as decent and safe as it ought to be. It is a very busy suburban interchange station. We need to show that we are capable of running an effective integrated transport system in this country.

We have the potential for a brilliant rail system in this country. It needs investment, not for money to be taken out of it by franchise operations. That money should be invested in better services and better conditions on our railways.

Photo of Angela Smith Angela Smith Labour, Sheffield, Hillsborough 3:48 pm, 12th February 2009

My background in further education taught me that it is always better to start with the positives before moving on to the negatives. It has to be acknowledged that the Labour Government have invested quite heavily in Sheffield's railway station. We now have one of the most wonderful station forecourts in the country, there are wonderful new public spaces in front of the station, and the old Victorian structures have been restored.

Every Sheffield MP is delighted that the city is potentially one of the three places where new trains will be built. Not many people realise that Sheffield has a grand history of producing railway components.My great-grandfather worked at Steel, Peech and Tozer, which specialised in railway components, as well as on the building of the great Bolivian railway during the first world war. We might reconnect with our great historical past if we win the contract and the right to build the new trains. Everybody in Sheffield is excited about that.

However, there are negatives to our current situation. I have three points to make in reference to the report. First, the ambition in the White Paper is far too modest, although I acknowledge that things might have moved on since then, and I would like to explore the matter further. Secondly, I would like to respond to the point made by my hon. Friend Graham Stringer that, far too often, we are seen to respond to demand with just-in-time investments, ignoring the potential of new investment to reduce regional disparities.

Thirdly, we need to invest in a bold plan to develop infrastructure and support the spatial economic development of the whole country. I will press for quick decisions on that because, as the Minister will be aware, such things take decades to plan, develop and complete. The north and Scotland in particular cannot wait any longer for positive decisions on the future of our railways.

In terms of the ambition in the White Paper, the Government have announced since its publication the potential for High Speed 2, with investment in a new west coast line. Clearly, that is to be welcomed. I join the Chairman of the Transport Committee, my hon. Friend Mrs. Ellman, in pressing the Minister for clarity and direction on those plans and some idea of when a decision will be taken.

I press the case for adding a new trans-Pennine link to the first phase of High Speed 2. One already exists, and everybody here who knows me will know my views on building on existing rail routes to reopen the trans-Pennine link. We could do it easily. My hon. Friend Jeremy Corbyn made the case for reopening old railway lines. It is relatively cheap and much less damaging environmentally than building new lines. The old Woodhead rail line from Sheffield to Manchester could easily fulfil the criteria. It must be remembered that it was not Beeching who closed the Woodhead rail route; it was the Tory Government in 1981.

Another issue is electrification. There are some tempting suggestions on the table to electrify the midland main line. I am quite open about the fact that Sheffield would be the main beneficiary. It is England's fourth largest city and only 165 miles from London, yet it still takes more than two and a quarter hours to get from Sheffield to London. Sheffield is still a major manufacturing centre and is important to the economy. The electrification of the midland main line and all that that would bring—not just for Sheffield but for Leicester, Nottingham, Derby and all the towns further on in the east midlands, such as Northampton, Kettering and so on—would be important for all of us. I know that First Great Western is pressing for electrification on its other lines too. I would like to see them all electrified, but I will of course press the case for the midland main line in particular. It would help to reduce the regional disparities to which my hon. Friend the Member for Manchester, Blackley referred.

Another point about the trans-Pennine link is that the Woodhead rail route is used at the moment by the National Grid Company. The two old Victorian tunnels, as I have said in previous debates, are used by National Grid to supply power to the north-west. It proposes to move its cables from the Victorian tunnels to the 1953 tunnel. If it does, there is a risk that we will lose the use of that line for ever for railways.

I am pleased that the Select Committee report makes it clear that we should not allow such current uses—excuse the pun—for old railway lines, as it shuts off for ever the possibility of reusing that old capacity. Will the Minister reiterate the commitment made by the previous Minister, my right hon. Friend Ms Winterton, to ensure that the tunnels on the Woodhead rail route are properly maintained until a decision can be made on whether to reopen it? It is incredibly important for those of us who live in the north—not just in Sheffield but in Leeds, Manchester and Newcastle as well—because we would all benefit from a trans-Pennine link.

My second point concerns the tendency to be reactive when it comes to investment in the railways. We need to learn to be proactive in creating infrastructure to help to drive sustainable economic growth. We as a Government have talked a lot recently about rebalancing the economy by moving away from the reliance on financial services that has brought us such disaster, expanding our manufacturing base for the future and exploiting the growth of new green technologies to ensure that we are more sustainably prosperous in future. However, we also need to consider rebalancing the economy in terms of a shift from the south-east and London to elsewhere.

It is critical to remember that the north has a population of 14.5 million, which is equivalent to a medium-sized European country such as Sweden. I have made this point in previous debates. The north has a large internal market with an economy worth more than £200 billion. It is a major economic player. The Northern Way, a group of regional development agencies, has pointed out that potential demand to move containers from the ports of the north and across the Pennines exceeds what the railway network can accommodate.

It has been said that Immingham alone carries 20 per cent. of the in and out freight traffic of the United Kingdom. When that is combined with Hull and Grimsby, anybody can recognise the importance of the Humber estuary to the country's economy and the economy of the north. From that perspective, the £30 billion gap in the economic capacity of the north compared with that of the south-east and London is fairly incredible. We need to do something about it.

Yet there has been a significant differential between investment in transport infrastructure in the north and in the south-east, as my hon. Friend the Member for Manchester, Blackley said. The Crossrail investment in projects is estimated at £175 million, in stark contrast with investment in northern rail projects such as the Manchester hub. At the moment, as he said, it amounts to Department for Transport officer time only. We are nowhere near to resolving the Manchester hub problem. I support what was said about that resolution being important to every single city and town in the north, not just Manchester. I reiterate the importance of resolving that problem immediately, or as soon as possible. It is also true that the age profile and relatively poor condition of rolling stock in the northern rail franchise has not attracted the same level of investment as in the south-east. Northern Rail has received no new carriages since 2004. Clearly, something needs to be done.

Professor David Begg, a respected academic in the transport field, has said on behalf of Northern Way that the north always underperforms when it comes to fighting and lobbying for the level of investment necessary. I apologise to my hon. Friend the Member for Islington, North, who represents a London seat, but High Speed 1 and Crossrail are both London-based, south-east-based and connected with France. When it comes to High Speed 2 and a Crossrail for the north—the trans-Pennine link for which I am fighting—Professor Begg would say that we in the north need to fight hard for it. That is what we are doing today. We need a level playing field in terms of investment in infrastructure for the south and north.

This is not just about closing the £30 billion gap between the north and south; it is also about ensuring that we connect the economy of the north more successfully. The agglomeration benefits of bringing the businesses of the north closer together and allowing them to benefit from more accessible, concrete transport connections cannot be overestimated. However, we can do that only if we have a coherent transport system that enables businesses to flourish beyond what tends to be their current limit of expansion, which is their city-region boundary. We have eight city-regions in the north, or we would have if they were given formal status. Businesses need to reach out beyond their city-region bases and to connect more widely. The rail transport network is an essential part of that process.

We need to develop a bold plan for railway infrastructure. As I said earlier, we also need to remember the importance of dealing with pinch points, electrification and High Speed 2. We need to connect Heathrow and the south-east to the midlands and the north. However, over and above all those considerations, we need to connect the north itself. We also need to think about high-speed rail capacity for the east coast main line.

The point has been made that, if we are to close the £30 billion gap between the north and the south, we need to think about a high-speed rail network that runs up and down the east and west of the country and that is also connected in the north. That is the vision of the Northern Way group and the vision that is right for the country. The immediate benefits of realising that vision would be worth £10 billion to the northern economy and there would also be benefits for the south-east. At the end of the day, London is still a major financial centre and to connect it to the north more successfully would create benefits for all.

Clearly the Government have a leading role to play in investing in our economic future. We talk about rebalancing the economy, about investing in skills and increasingly nowadays about investing in manufacturing, to ensure, as I said earlier, that we can exploit the low-carbon technologies that are developing and the opportunities that may arise with the development of a new generation of nuclear power plants. However controversial those plants may be, at the end of the day it is said that the UK could provide up to 80 per cent. of the components needed for them. We need to exploit digital technologies. However, if we are to do all those things, why on earth are we not investing in the transport infrastructure that would make it so much more likely that we can succeed in developing skills, manufacturing and our economic future?

The Government need to be bold. They were bold when they intervened to save the banks and when they stimulated the economy with their fiscal plans and their commitment to bringing forward public spending. However, what we are talking about today would be the big, bold investment that people in this country are longing for; it is the announcement that they want to hear. They want something to be positive about—an ambition to build the best integrated transport system in Europe. As far as I am concerned, nothing else will do.

Above anything else, including enhanced economic prosperity, I hope that such a system would achieve the modal shift from road to rail for which everybody in this country is now increasingly pressing. If we want to cut our carbon emissions while at the same time securing economic prosperity, we must make that modal shift from road to rail. It is no good building bypasses on the Woodhead in the Pennines as a way of simply encouraging more and more freight to go across mountain passes and on the M62. If we want to see the Humber estuary develop into one of the most successful port areas in the country, importing and exporting freight, we must ensure that we have the rail capacity to enable us to exploit that increased movement of freight in and out of the country. It is absolutely critical that we do that. Otherwise, the system will not work; increasingly, the roads will clog up and we will never succeed in doing anything other than deterring economic investment, rather than increasing it. Socially, economically and environmentally, therefore, we must secure that modal shift from road to rail.

Let us give the people of this country the ambitious plans that we really need and the hope and the confidence that this Government can deliver strategically the support that the economy and our transport infrastructure need. It is not just about freight, but about getting people to work in the morning and getting them home at night.

I will finish by moving to a very local level. In Sheffield, there is only 15 per cent. capacity left on our roads. We need a better rail network. The journey between Sheffield and Manchester, and that between Sheffield and Leeds, are absolutely horrendous. As I said yesterday in the Select Committee, it takes an hour and a half to travel 40 miles from Sheffield to Manchester on the train—an hour and a half. In the 21st century, that is not good enough.

The Victorians knew how to solve that problem. They built the Woodhead railway. In 1981, the Tory Government closed it. Let us just hope that this Labour Government take us back to the Victorians and achieve what they achieved more than 100 years ago; I have faith in this Government's ability to do that.

Photo of David Drew David Drew Labour, Stroud 4:05 pm, 12th February 2009

It is a delight to take part in this debate. Two colleagues also wish to take part, so I shall keep my remarks as brief as possible.

It is also a delight to follow my hon. Friend Ms Smith, who raised a plaintive cry for help from the Government. I do not come to seek help from the Government. I was able to talk to my hon. Friend the Minister yesterday—I shall refer to a particular case that we discussed. I think that the Government have already come to our aid, but I want to put on the record briefly how I think that that Government help can be delivered, to ensure that those of us from Gloucestershire go away from this debate on railway strategy somewhat happier than we were a few weeks ago.

I would just like to pay due regard to my hon. Friend Mrs. Ellman and the excellent report that her Select Committee produced. It has given us every opportunity to say whatever we like about railways. Also, coming as it does hot on the heels of the Office of the Rail Regulator's rail strategy increased investment report, there is plenty of opportunity to say what we like and what we hope may happen in due course.

In passing, I draw my hon. Friend the Minister's attention to early-day motion 794, which is in my name and the names of a number of my hon. Friends. It refers to what my hon. Friend Jeremy Corbyn was talking about earlier—some of the rail cuts in which Network Rail is indulging. Those of us who want to see the recession over as quickly as possible feel that that it is an adverse move on the part of Network Rail to be considering some reduction in expenditure, particularly in key areas such as maintenance and signalling. So I hope that my hon. Friend the Minister will have some good news about that, to put Network Rail back on the straight and narrow so that we do not give the wrong signals—no pun intended—and to ensure that we invest in this area and so that investment is not just of the longer-term variety but of the immediate variety too.

My hon. Friend Kelvin Hopkins is not here, but if he were I am sure that he would have spent quite a lot of time talking about rail freight. As far as I am concerned, he is Parliament's greatest advocate of the need to invest in rail freight. He would want me to say that, although this debate is not principally about that issue, promoting the shift of freight from road to rail is something that this Government have really tried to do. However, anything that we could do to encourage that process should be happening at this important time, not least promoting the idea of a central freight line. I know that my hon. Friend has done lots of work on promoting that idea, and the Government, through Lord Adonis, the Minister with responsibility for railways, are increasingly taking it seriously. So, anything that my hon. Friend the Minister can do to steel Lord Adonis, to ensure that that central freight line is ever more likely to happen, would be a jolly good thing.

My hon. Friend the Minister knows about this already and I am sure that he has all the facts about it in front of him, but the particular issue that I want to refer to is the redoubling of the line from Swindon to Kemble, which is on the Cheltenham to Paddington line. The line from Swindon to Kemble is a relatively short piece of line that is single-track. There was some madness about the time of the Beeching cuts, I think. We had a cut and lost one of our lines. That line was supposed to go all the way through to Gloucester, if not Cheltenham, which would have left us somewhat bereft.

Thankfully, some wise person managed to stop that, so only the worst bit of track bed had to be dealt with by slewing two lines into one. We think that we are making progress on getting that reinstated. I attended a meeting on this issue three weeks ago, as did Mr. Clifton-Brown, in whose constituency the line lies—of course, it also impacts on my constituency—and Martin Horwood, so there is genuinely cross-party feeling on this. My hon. Friend Mr. Dhanda has also been a keen advocate for that work to be done. It will open up all sorts of opportunities, not least regarding multi-modal shift and congestion problems, because when one train is late, it causes further delays on single tracks because no other train can get on to that piece of railway.

On the three provisos, the Government have been true to their word in their press announcement this week. They will find £900,000 for the GRIP 4 rail evaluation—I always wonder where these things come from: GRIP stands for nothing more devious than Government rail investment programme—and they want the South West of England Development Agency, and allied bodies, to find £1.6 million for it. We hope that we have found the initial money to show that the project stacks up in terms of value for money. We will also have to find the remaining £40 million to ensure that things are done. In the great scheme of things, and given that the investment should be paid back within three or four years, this is almost a no-brainer. We hope that the Chair of the Select Committee will make some noises on our behalf, but we think we are on to a winner. At our meeting, three weeks ago, Lord Adonis said that he thought the region had the money, so I hope that the Minister will have some nice things to say about how negotiations with the region are going.

It has been left to me to persuade First Great Western, if we get the track done at some point from 2010 onwards, to run some trains on it in addition to those it runs already, so that we will get a better service. My ideal would be a half-hourly service, one of which is a through train to London, but, first, let us just fill some of the gaps during the day and make sure that people are able to do what we want them to do—get on a train. I should like it to be a cheaper train than it is at the moment, but at least they would be able to get on a train. I should have liked this to be a pre-emptive move, before work on the north Cotswolds line began, but for some bizarre reason, that is an even worse line than the Swindon-Kemble, Cheltenham-London line, so it was given prominence over this work. None the less, if the team can be taken off the north Cotswolds line when it finishes in 2010 and moved on to this line, that would be good news, and we would accept that.

I hope that the Minister has listened to my pleading, which is the only bit of local lobbying I shall do today. That work is important, because it could be such a good example of the multi-modal issue and how people's travel patterns can be altered. More to the point, it will pay for itself. It is a little-known fact that Kemble, which is at one end of the line, sells more first-class rail tickets than any station outside the big inter-city stations. We know what the Cotswolds is like, so that should not come as a total surprise. We need to get on with that work.

A number of issues have been covered by my hon. Friends, and Dr. Pugh has covered much of what I wanted to discuss, so I shall not spend too long on those points. The key issue with the rail strategy is how to get a relationship between what the state invests, what the user has to pay from the pocket for fares, and what the rail companies are currently able to invest from their profits. My hon. Friend the Member for Islington, North mentioned some of the profits that those companies are making, which some of us think rather obscene. Given the current discussions about what the bankers have taken out of the financial system, it is interesting that the rail companies are not far behind. I should like there to be a movement back to the public sector, but I shall say more about that later.

The key point that I want to make about the current situation concerns the recession. The figures that have been calculated were predicated on a steady growth in passenger use. That growth might continue, because people might be even more inclined to use the railways given that, for all sorts of reasons, cars might become more expensive. There could be a downturn, and, as my hon. Friend the Member for Islington, North has said, the problem with the franchise system is that companies could say to the Government, "We are not making as much money as we thought we were, so we cannot invest in the improvements that we said we would invest in, and, by the way, you've got to give us some more money to keep existing services going." I hope that my hon. Friend the Minister will tell us how the Government intend to deal with that. That might be hypothetical now, but if it becomes reality, there will be serious problems in that there will be a decline in passenger use, fewer trains and the system will deteriorate.

As a member of the National Union of Rail, Maritime and Transport Workers rail group and the ASLEF group here, I am worried about jobs. We do not want any jobs to be lost, largely because we want to build a network. Anyone who knows anything about the rail industry will know that there has been a shortage of skilled work, particularly at the top end, in terms of engineers and people who are able to do the serious thinking about how to make services better and how to have more services. If we lose employees, that will endanger the system more than anything. I hope that we will get some clarity on how we will keep people employed. This is the green new deal writ large, but there is no clear way in which that could be taken forward other than by investing in railways and the people who work on them. Losing people from the railways will be entirely counter-productive.

My hon. Friend the Member for Islington, North mentioned the letter from the three rail unions, which many of us think very sensible. Of course it is a lobbying letter, making a number of points, but as my hon. Friend showed when he read parts of it out, it contained some ideas that many, if not all, Labour Members present think incredibly good. It shows a sign of faith from the unions that they want to keep to their side of the bargain by helping the Government and the companies—I shall say more about that in a moment—but we need some stability, and we do not want job losses or any contraction in the Government's investment programme. I shall leave that issue there.

Both my hon. Friends the Members for Manchester, Blackley (Graham Stringer) and for Islington, North have discussed accountability and structure. I should like to see a publicly owned railway, but I also recognise that there might be a stepping stone to that. The Select Committee's report refers to the unease between the current structure and accountability of Network Rail, which is a public company. It might be limited by guarantee and it might be a strange concoction, but we could find new ways in which it could meet the public good. Some of us would like there to be real accountability, and we could find ways of moving forward in that regard. As a Co-operative MP, I draw hon. Members' attention to the fact that the Co-operative party has produced a paper on how we could mutualise that organisation. I hope that paper is being considered seriously.

Photo of Louise Ellman Louise Ellman Chair, Transport Committee

I endorse my hon. Friend's comments. A lot of good could be done with Network Rail, and its performance contrasts beneficially with the disgraceful performance of the privatised Railtrack.

Photo of David Drew David Drew Labour, Stroud

I thank my hon. Friend for those comments, and I refer her to paragraph 61 of the report, and the comments of Christian Wolmar, for whom I have a lot of time, as do many others present. He knows an awful lot about the way in which railways operate. Paragraph 61 contains his comments about the current membership structure being too weak, and the fact that if members do not like senior managers' plans, they can do nothing except say that they do not like them.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

I am grateful to my hon. co-operator of a Friend for giving way. Over the past few days, have we perhaps not seen some of the problems that arise when those who are meant to be the ultimate scrutiny mechanism for a board of directors are effectively dependent on the very directors whom they are meant to scrutinise?

Photo of David Drew David Drew Labour, Stroud

I agree, which is why the co-operative mutual model has some merit. The model is not the answer to the industry, but it is at least a way in which the industry could be made more accountable and restructured. I hope that my hon. Friend the Minister hears what the co-operators from our party have said and that at least some serious investigation is done by the civil service into what might become of Network Rail, given that the Committee has criticised its current structure and said that there are people in the rail industry who feel uneasy about what it does.

Indeed, as I was saying, I have talked to several people who are the so-called members and they feel that their powers to hold the management to account are far too weak and do not sit easily in relation to that body, which is important and is taking the rail industry forward. I hope that my hon. Friend the Minister will say something about that. Other hon. Members want to speak, so that is all I have to say.

Photo of Eric Martlew Eric Martlew Labour, Carlisle 4:21 pm, 12th February 2009

I wish to put on the record, Sir Nicholas, my thanks to you as co-chair of the all-party parliamentary group on the west coast main line. It has been a hard road and it has taken a long time, but I think you will agree that we now have a line of which we can be proud—although I am not sure whether you got the improvements to Macclesfield station, Sir Nicholas.

The Government were brave to bring out a 30-year plan—although I suspect we might have 15, 16 or 17 Secretaries of State before it reaches the end of its term. I am looking forward to reading the plan in 30 years' time—in fact, it will be in 28 years' time because it has been out for two years. However, it already looks dated in some ways. I looked at the report, which I think we published last August, and that also seems dated in some ways because at that time we were talking about electrification. I think oil would have then been about $150 a barrel and we were talking about $200. Of course, now it is probably $40 or $45. The argument in that respect was probably wrong.

We were also looking forward to railway expansion. Today, we have been talking about the franchising companies possibly handing their franchise back because there has been a reduction in the numbers. However, those are the future plans. We have to ignore such minor blips and concentrate on the 30-year plan because we will get out of the recession and oil prices will go up again.

The Government got it wrong in two cases: first, in relation to the electrification itself and, secondly, in relation to the high-speed line. To give the Government credit, they have put it right in both instances. Those of us who heard the Secretary of State's statement today will have noticed that he mentioned the electrification of the main line to the midlands—the Midland Mainline—and the First Great Western. Those were not included in the plan two years ago. In fact, doing so was frowned upon—the Government were not brave enough. Of course, there is also High Speed line 2. We are going to have High Speed 10 taken out at Companies House, but that was not in the document at all at the time—it was exactly the other way. When we saw St. Pancras station and High Speed 1 come in on budget and on time, we realised that that was the way forward. The Government have to be congratulated on putting those two things right.

I want to concentrate on a couple of issues today. I have heard many hon. Members talk about the high fares that we pay and then I heard them say, "But, we need extra improvements"—for example, in my or their constituency. I am not sure that we can both keep fares low and make improvements. The fact is that we have increased the public subsidy going into the railways from £1 billion to nearly £6 billion in the past 10 years. The idea that we will not have to pay a public subsidy, which was the promise given by the Conservatives, was, of course, nonsense. It is right to say that we can keep fares low and not increase subsidy. However, if we do that, what we cannot do is improve the railways. The reality is that if we keep fares low and do not increase the subsidy, we will have a declining railway, which happened for probably 30 years after the war. We cannot let that happen.

The other thing that we must not forget is that in my constituency, for example, where public transport is by bus, people will often not use a train from one year to the other, and parents will say that they are taking their children on the train for a treat. Are we really saying that people who never use trains should pay extra taxes for those who do? I am not sure what the answer is—although I am sure that the Minister will try to give us one. We have to be careful about saying that fares are too high. No one says that we should put more subsidy in, but that is what we mean. If we do not increase fares or increase the subsidy, we will have a declining railway.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I am sure that my hon. Friend would agree that one way of looking at the matter is to consider the exorbitant profits being taken out by some of the train operating companies. Also, his argument about investment would apply to anything. People who do not have children pay taxes that help pay for education and so on. Surely, it is for the general good of everyone that we invest in a rail system?

Photo of Eric Martlew Eric Martlew Labour, Carlisle

I understand that, but it is obviously easier for my hon. Friend to say that when we spend billions of pounds in London. My constituents have no option but to catch the bus. He is right about the money that is going into the private rail companies, and I will come to that in a moment.

We have to think carefully about the issue. It is all too easy to say, "Fares are too high; we should increase the subsidy." However, if we do not increase the subsidy, the effect will be a decline in the railway, which is what happened over 30 years on the West Coast Railways. That is why it cost nearly £9 billion to put things right—although a lot of it was just renewal work. We have to come to a conclusion about how we are going to deal with the matter.

Photo of John Pugh John Pugh Shadow Minister (Treasury)

Several hon. Members have talked throughout the debate about the railway model that we have, with the rolling stock companies, the train operating companies, Network Rail and so on, and that we need to make sure that the subsidy is greater than it needs to be—even given the level of investment. The hon. Gentleman just mentioned the west coast main line, but half of the problem was the fact that we had Railtrack.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

When Railtrack was going to upgrade the west coast main line, I think the bill was £13 billion. It was only as we brought it back out of the private sector that we got the figure down to a reasonable level. There is a quandary and a question in relation to that and I do not think that people are prepared to face up to that situation.

May I now talk about the skills shortages? If we are going to have a modern railway, we need the skills. If we look at what went wrong on the west coast main line in early January—apart from the aeroplane crash, which was unavoidable and tragic—it all boils down to bad workmanship. That was the problem. It was the contractors that were used at the time; it was the lack of skills; the lack of supervision by managers; and, probably more than anything else, it was the lack of project managers. We need to get those into the industry. Network Rail is doing quite a lot. It has an apprentice training system through which I think they train more than 600 apprentices a year. There is a residential course, but unfortunately, as far as I am concerned, it is on the south coast, which is a long way for my constituents to go. We also need graduates to come into the industry. Perhaps if they are not all going into the banks, some of those high-fliers will go into the rail industry, because they will have a future there. The other problem is that the TOCs are not taking on people to gain the skills to maintain the trains because they have a franchise.

On franchising, we have a 30-year plan, but one thing is for certain: the franchises will not last for 30 years. I come from a railway family. My grandfather was a railway man and my father was a railway man. I know that privatised railways do not work. That was why the railways came into the public sector in the first place —it was not because we were greedy; it was because they collapsed. The franchising system was introduced by the Conservatives and has given us the worst of all worlds.

A company can run a good franchise and treat its staff and customers well, but that counts for nothing, because, when it goes for the next franchise, it is a blind process—the Government do not know who puts in the bid. So, when a company comes to the end of its franchise, why should it bother? It gets no credit whatever.

I must be careful with my next point, because I got it wrong during a Select Committee sitting. I said that I liked virgins, and it caused a problem. However, I actually think that Virgin Trains does quite well.

Photo of Paul Truswell Paul Truswell Labour, Pudsey

You've done it again.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

I know, but it is an easy way of getting in the paper.

There has been no greater critic of Virgin Trains than me over the years, and we have had our share of ups and downs with Mr. Branson, but it has done quite a decent job. It is coming to the end of its franchise, and, when I complained to it only the other day about the inefficient toilets on its trains, a representative said, "We're doing some work on that, but, by the time we finish, our franchise will be over and we may not get it again." The franchising system is a nonsense. It may be all right for McDonald's, but it does not work for the railways, so they should be taken back into public ownership.

The other easy thing for the franchise companies—we saw this with GNER—is that, if the franchise does not work, they do not have to ask the Government for more money, they just hand the keys back and say, "That's it, it's not working, we're stepping away." I advocate that we take the railways back into public ownership. Another option—I will not be popular for saying this—is to sell the business to the companies and then regulate them completely. We could have an "Oftran" and say, "You own the business, this is what you'll do." They would not be able to give it back, although they would be able to sell it. The franchise system does not work, but I am afraid that my Government are not brave enough to take the railways back, so we have to look at other options.

I am conscious that other Members wish to speak, and there are other things to say. The Government have been brave in bringing out their new document, and right in changing their mind on electrification and on high-speed lines, but serious consideration must be given to the balance between what we get from the fare box and from subsidies.

Finally, we must accept that the franchise system does not work and, therefore, do what I advocate. When the franchises come up for renewal, we should take them back into public ownership or consider giving the companies the responsibility for them. At the moment, they can get away with handing the keys back, and that cannot be good for the railways. It is certainly not good for the staff who work on them.

Photo of John Grogan John Grogan Labour, Selby 4:33 pm, 12th February 2009

I have just five quick points.

First, I remind the House that there are only 316 days until Christmas, the period when the railway network shuts down for 58 hours. That issue comes before the House in the form of early-day motions every year, and we are the only nation in Europe which shuts its railway network down for that long a period. In many European nations, there are trains on Boxing day and on Christmas day, but I advocate that we look only at Boxing day. It seems unreasonable—for reasons of people travelling to meet their relatives, to go to the sales, football fixtures and, in some cases, to go to work—that there are no trains over that entire period. Although I am sure that we all love our relatives very dearly, 58 hours can be a long time. Some people also cannot leave London, for example, to go home to visit their relatives, because they have to be back at work first thing on 27 December, and there is no train to bring them back on Boxing day. Ministers have in the past given contradictory reasons: on the one hand, they have said that Network Rail has to undertake engineering works; on the other hand, they have said that everybody deserves Christmas off. They are contradictory reasons. The railways are public services and, certainly, on Boxing day, they should be running. Lord Adonis has said that he will meet me to discuss that topic, and I was pleased that, last Christmas, the major Opposition party said that it backed Boxing day trains. I hope that the Government will do so soon, too.

Secondly, my hon. Friend Ms Smith was passionate and strident about the issue of high-speed rail, and she was right. It is a big issue in Yorkshire. I stress upon the Minister that, for us in Yorkshire, God's own county, it is as big as Crossrail and the Olympics combined. It is that big an issue and, again, both Opposition parties are now committed to high-speed rail to Yorkshire and the north of England. The Government are moving on the issue, too. Indeed, in this Labour Government, we have the most pro-rail Transport Ministers whom we have ever had, so I feel confident that, before too long—before next Christmas and certainly before the general election—we, too, will be unambiguously committed both to high-speed rail to Yorkshire and, I should like to think, to a high-speed trans-Pennine link. Lord Adonis has begun to think about that, and it would be a good step.

Thirdly, I am a comparative moderate. I am much more new Labour than some colleagues who have spoken, and I do listen to Ministers, so I shall not call for the nationalisation of the railways. The next time somebody hands in the keys, however, it would be a moderate move to introduce a public sector comparator. On the south-east railways a few years ago, something similar happened: the franchise was handed back and it was run very efficiently in the public sector; but, it was then put out again to a franchise. It would be a very moderate step, indeed if we had a public sector comparator for some railways, so that a value-for-money comparison could be made with private sector companies.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

My hon. Friend makes an important point, but does the situation not also highlight one of the problems with the current system? The franchising system is predicated, in theory, on competition, but apart from the board of franchises and the few open-access services that then cause more problems for the rest of the network, there are no competitor services on the franchised lines and, of course, there is hardly any competition in the industry at all, because three or four major operators have most of the franchises.

Photo of John Grogan John Grogan Labour, Selby

I agree with my hon. Friend to an extent, but I disagree with him about open-access services. There are not many of them. There is Hull Trains, which serves Selby, coincidentally, and there is Grand Central, which serves York. They have innovated and linked places—largely to London, but, nevertheless, places that were not linked to the capital before. That is certainly the case with Selby and with Grand Central, a company that the Department for Transport resisted for many years. It has now linked various towns and cities in the north-east with London for the first time, so I would not be dogmatic about the issue. I would, however, like a public sector comparator, and, where proposals are made on open access, there is a duty to consider them.

Fourthly, rural railways have not been mentioned much during the debate. There are seven stations in my constituency and, for many rural communities, they are lifelines. One line that goes through my constituency, the Leeds to Goole line, was designated as a community railway line by Network Rail in 2005. The line had five services a day but, within three months, that went down to three, so the community designation did not make much of a positive difference. I commend the Government on what will make a positive difference, however: passenger transport authorities being able to expand into rural areas, a provision that we introduced in legislation last year. I should like the trains in Selby district to be placed under the auspices of an expanded West Yorkshire Passenger Transport Authority. That would be a very good move, and it would certainly help with integrating fares.

Finally, I shall have to disagree with some of my colleagues again. My good colleague, my hon. Friend Mr. Martlew, Carlisle, commended Virgin Trains, but the Government should insist that all train companies offer the same refund policy when things go wrong. However much investment we have in rail, whatever structure we have administering the rail companies, sometimes trains are late—sometimes very late indeed.

Virgin is about the worst for providing refunds. A train has to be delayed for an hour before it will give any refund at all. Merseytravel is equally bad. It gives only a 20 per cent. refund after an hour's delay. In contrast, TransPennine gives a full refund on a return ticket after an hour's delay, and a 50 per cent. refund after a 30-minute delay. National Express, which has increased punctuality on the east coast line, also has a decent refund policy. I urge the Minister to insist that all rail companies have a similar refund policy.

I hope that by the time those 316 days elapse, we will have more train services—not just a few in Scotland or a few to Heathrow and Gatwick—and we can celebrate Christmas 2009 by going to Boxing day football fixtures on the train.

Photo of Mark Hunter Mark Hunter Shadow Transport Minister; Parliamentary Private Secretary to the Leader, Shadow Minister (Transport) 4:41 pm, 12th February 2009

It is a pleasure to serve under your chairmanship, Sir Nicholas. I thank the Chairman of the Transport Committee and the members of the Committee for all their work on what is generally recognised as an excellent report. Many members of the Committee have contributed to this useful debate. I welcome the Committee's recommendations and I hope that the Government will take them on board as soon as possible.

Much as I acknowledge and welcome the Government's announcement today on investment in new trains, I intend none the less in the few minutes available to me to restrict my comments to the findings of the Select Committee and the Government response, although the context is slightly different from what we perhaps anticipated.

One of the report's key criticisms of the White Paper is that it does not deliver what was previously promised. It is not a strategy for the next 30 years. The high-level output statement covers only 2009 to 2014, and I agree with the Committee's recommendation for the Government

"to be bolder in its vision and to set out a proper long-term strategy".

As we heard, the rail network is almost full to capacity and passenger numbers are rising all the time. Surely the Minister would agree that what the Committee described as "just-in-time investments" is not enough.

I certainly agree with the Committee's concerns that the Government are not doing enough to integrate rail policy with other policy areas. Local and national transport networks have a profound effect on local economies, communities and the environment, and we believe that consideration of the broader socio-economic benefits and the full cost of carbon should be fully integrated into the policy-making process.

I was genuinely taken aback to read in the Government's response that, while they are considering the environmental performance of the existing railway, they will not develop proposals for increasing the contribution that railways can make towards improving the environment until the next high-level output statement. If Britain is to play any real role in tackling climate change, let alone the lead role that we all aspire to, we need to be more ambitious and look at how rail can help move us towards a carbon-free society. I therefore would be interested to know whether the Minister has considered bringing forward the next HLOS so that the UK can be more proactive on the issue.

On a more positive note, I am pleased that the Government have moved towards considering the high-speed rail option, albeit the move is seen by many as only an environmental sweetener for the plans for the third runway at Heathrow. Frankly, many of us would still say that they are not moving fast enough or with nearly enough conviction. The case for high-speed rail is clear and urgent. Some of us have been saying for a long time that it is necessary to cut journey times to Scotland and the north, to improve capacity and to encourage a modal shift from air travel in the UK.

I also welcome the Committee's recommendations on capacity. With a 40 per cent. increase in passenger miles travelled by rail since 1996, this is absolutely a key issue. We need more capacity on almost all of our lines, and the Government ought to be taking drastic action to increase capacity and reduce overcrowding. I acknowledge that a step in the right direction has been taken today, but, while I welcomed the announcement, I hesitate to celebrate prematurely, as the Government have ordered only one third of the long-promised 1,300 train carriages that were announced some time ago. New carriages on some lines are a good start, but more needs to be done.

Electrification, which we fully support, is key to increasing services and lowering emissions, and I am pleased that the Government are planning to electrify the Great Western and Midland Mainline services. They mentioned in their response that a review of electrification would be completed by 2008. Perhaps the Minister might confirm whether it is complete, when it will be published, and whether it will make a commitment to electrifying the entire mainline network.

I would like to expand still further on many of these points, but, in fairness to other colleagues who have yet to speak, I shall restrict my remarks to those.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport) 4:45 pm, 12th February 2009

It is always a pleasure to see you in the Chair, Sir Nicholas. Like other hon. Members, I wish to extend my congratulations to the Chairman of the Select Committee and to her predecessor, the late Gwyneth Dunwoody, on the part that they played in chairing the Select Committee during examination of the White Paper and in producing the report.

I am sure I cannot be the only person who has been wondering why we are here today. The White Paper, "Delivering a sustainable railway", was announced in July 2007, the Select Committee report was published in July 2008, and the Government response was published in October 2008. It has taken a long time to get here.

We had the statement today by the Secretary of State for Transport. I suspect it was made so that the Minister can talk a little more about it this afternoon and avoid some of the issues that have been raised. It was noticeable again this morning that the Secretary of State failed to answer any of the difficult and detailed questions about the number of extra carriages. We will come to them later, but let us now turn to the White Paper itself.

As many other hon. Members have noted, it is unfortunate, to say the least, for the Government that, less than two years after its publication, the so-called 30-year strategy is basically out of date and has fallen apart. It is no wonder that the Select Committee concluded that the Government should seek to develop a genuine 30-year strategy. At the time the document was produced, it was rightly lambasted by several industry experts as over-hyped and visionless. Several people said that within the high-level output statement itself there were many good things, but, like so much from this Government, the good is recycled and the new is bad.

The HLOS and the 30-year statement talked about three things: Birmingham New street and Reading—in reality, a re-announcement; £100 million for all new station improvements outside London; and, again, the much-vaunted 1,300 carriages. In fact, in that document we went from 1,300 new to 1,300 extra carriages, and we should not forget that previous Secretaries of State announced them as well.So when the Select Committee concluded that

"the level of ambition in the White Paper is too modest...we urge the Government to be bolder", that it was

"disappointing that the White Paper dodged the decision", that

"hesitation...will mean years of avoidable misery", and that

"the White Paper dismisses electrification too easily", it clearly agrees with the view of many in the railway industry that, in reality, the document was nothing more than an expensive waste of paper and ink.

Now, two years on, in the short period since the publication of the document, the White Paper's dismissal of high-speed rail and electrification has been deemed obsolete by the new Minister of State and a Government U-turn. The new Minister has reversed the catastrophic opposition to high-speed rail. It is a shame that, so far, those plans are uncosted and we do not know where they are going to start or where they will go to. One hopes that they will not have the fantasy train to accompany Heathrow's fantasy plane.

The analysis in the White Paper of the procurement system has been blown out of the water by the Competition Commission; its refusal to reform Network Rail demonstrates that the Government are not concerned with the serious criticisms of the governance issues relating to Network Rail; and its fares policy has been criticised by a number of hon. Members this afternoon. So it is not surprising that the words of the Select Committee—

Photo of Eric Martlew Eric Martlew Labour, Carlisle

Can the hon. Gentleman take this opportunity to give us the Opposition's fares policy?

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I shall come to that later. I am sure that you will be waiting earnestly and excitedly to hear it.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

I am not waiting: the hon. Member for Carlisle is waiting. The word "you" is not appropriate.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I am disappointed that even Sir Nicholas is not waiting. But I take it that the hon. Gentleman may be waiting.

The Select Committee report was rightly critical of the engineering overrun of new year 2008, describing "serious deficiencies" in respect of control. Of course, the debate in the House and comments in the report said that engineering overruns were quite unacceptable. That is true. It was brought out during the debate in the House that a number of those delays were absolutely avoidable and predictable, because Network Rail was warned as far in advance as 12 December 2007 that there were going to be problems, but they carried on despite the problems that would lead to the overrun.

To be fair, that was 2007-08 and Network Rail has certainly made some improvements since then, and the Government cannot be blamed for the operational problems of Network Rail. However, it is right that the Government can be blamed because they set up Network Rail, which, structurally, is not accountable to passengers and is not given strong enough incentives to respond to what passengers actually want. All too often, Network Rail believes that its customer is the Government or the Office of Rail Regulation.

Photo of Angela Smith Angela Smith Labour, Sheffield, Hillsborough

Does the hon. Gentleman not consider Network Rail to be a vast improvement on its predecessor, Railtrack?

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

At the moment we are discussing the governance issues of Network Rail, so let us continue to do so.

What should be obvious to Network Rail is that its real customers are the passengers and the train operators and freight companies it serves and it should not believe that its real customer is the Department for Transport. But neither the passengers nor the freight companies have an effective means of holding Network Rail to account, due to the way that the company was set up. The only body to which the company management is required to account consists of the members, which it appoints. That is hardly a model of corporate governance. Indeed, the Select Committee's report concluded:

"If Network Rail's members cannot, or will not ...they are not a body worth having."

I agree. I welcome the Select Committee's critique of Network Rail. I urge Committee members to read the rail review document issued by my party yesterday. We have listened to that criticism carefully; we intend to reform the governance of Network Rail.

The Network Rail company needs a supervisory body. To comply with European legislation the members of that board will be from outside the rail industry and will comprise passenger representatives and independent members with a strong background in business and dealing with corporate governance issues. The remainder of the members will represent passenger, freight and open access operators and supply. The supervisory board will have an independent chairman. The management board should and will be accountable to the supervisory board for performance. So stakeholders in the industry would have a greater power over Network Rail's priorities, meaning that we should see an improvement in performance, with a focus on service quality, value for money and passenger concerns, and an improvement in respect of tackling overcrowding and producing better co-ordination and integration with track and train.

The Committee is right. The governance structure is not adequate and it needs to change. The Committee also correctly highlighted the problem of communication, particularly, as we have already mentioned, in respect of the events of early January 2008. Having listened to the Committee's criticism of Network Rail, it seems appropriate that changes should be made.

The Conservative party believes that the ORR should look at the licences. We would work with it to amend the licences issued by the regulator so that they place a much stronger obligation on Network Rail to keep the passenger and freight operators informed of issues affecting the efficient running of the services, such as the progress of engineering works and the likelihood of overruns. The key problem with the 2008 overruns, in terms of the way that Network Rail interfaced with the passenger, was that very short notice was given to the operators to change their service. For example, at Liverpool Street, where there was chaos, National Express was given less than three hours' notice that that station would not re-open after the new year break. We will strengthen and extend the duties imposed on Network Rail to co-operate with the train and freight operators and place a clear and explicit duty on it to co-operate with the train operators on passenger satisfaction, capacity improvements, overcrowding, growing passenger numbers and planning major upgrade projects.

It is right that Network Rail's monopoly on capacity enhancement needs to be challenged, for only in that way can we ensure that the public purse is getting value for money.

The Select Committee correctly highlighted a number of issues to do with the way that Network Rail contracts out its engineering works and the associated problems with value for money. Making small-scale enhancement projects available to and contestable by other operators, including the train operators, local authorities and community rail projects, would improve efficiency and help provide an important benchmark for Network Rail's performance.

It was absolutely right that the White Paper highlighted safety as a key concern. Safety must always be the key priority—it must be a top priority—but nothing in the plans that would allow small-scale capacity projects to be contestable would affect the safety of the network. It is true that tragedies on the rail network are not the exclusive preserve of either the private or the public sector.

I credit the Government with getting one thing right in its 30-year strategy: correctly identifying that the capacity shortage on the network should be the top priority. However, again, the Select Committee was quite damning:

"We are concerned that the Government is failing to take the concerns of the industry seriously...We recommend that the"

Department for Transport

"revise its method for predicting developments in rail patronage...The Government's approach to increasing capacity...is over-cautious."

Hon. Members have given all sorts of examples of that from their constituencies. One example that directly affects my constituency is the inability of the Government to bring back into operation the five Eurostar platforms at Waterloo. They were told about those in November 2004 and, still, five years later not one of those is back in use. The Committee might say "over-cautious", but that certainly is not the word used by commuters.

I should like to touch on three other areas where progress could be made in terms of capacity. I agree with a number of hon. Members who have mentioned the need to protect disused lines. The Select Committee correctly highlighted the question of disused rail lines. I have written to the previous two Secretaries of State about this matter to ask them to agree to a moratorium on the usage of disused lines so that they could be re-opened, but I have had no response to either of my letters. I think that in paragraph 23 of the Select Committee's conclusions, which says that the responses from the Government are "less than convincing", the Committee is being rather kind to the ministerial team. We need to ensure that there is a moratorium on disused lines so that they could be used for rail openings, if that becomes appropriate.

When the Select Committee report was published it was correct to conclude that, at that stage, the Government had absolutely no interest in high-speed rail. Indeed, the then Secretary of State described high-speed rail as being risky and expensive and said that it would not help passenger demand. How things have changed. Although we may not agree exactly on the route, there now appears to be a cross-party consensus building on the need for high-speed rail. That would not only have huge impacts in terms of economic benefits for the north of England, but would rebuild capacity for both freight and passengers on the west coast main line.

It is clear also that one should welcome today's statement from the Government about new carriages. Paragraph 25 of the Select Committee's conclusions welcomes the new carriages—wouldn't we all?—but has the statement today taken us any further forward? The Secretary of State failed to confirm exactly when any of those new carriages would come into operation. As I understand it, the 2013 phase will be only a testing phase. There will be no benefit from any of the new carriages until beyond 2015. Will the Minister say exactly when he expects the rolling stock announced today to come on board?

Finally, as the ORR and others noted in their evidence to the Select Committee, it is not the place of Government to develop detailed strategies.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

I am a bit worried because the hon. Gentleman has said "finally". He did promise that he would tell us about the Conservative fare strategy.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

Order. I have to say to Mr. Martlew that I am rather pleased that Stephen Hammond has not gone down that track, because the subject of the debate is the Select Committee report, not the Opposition's transport policy.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I hear your strictures, Sir Nicholas, but I hope that you will allow me just a little latitude in a few moments' time.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

He was only trying to help.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I know he was. A number of the problems that we can see today have been attributed to the fact that timetables, franchise specifications and all the rolling stock plans are being written in Marsham street, not by those in the industry, who know what is going on and what the passengers need from transport when travelling. The facts speak for themselves. The Competition Commission has issued its draft findings on the rolling stock industry. There is a scathing report coming through on the way in which the Government have mismanaged the procurement processes. Franchises are so tightly specified that there is no room for any innovation. As long as the interests of the taxpayer are being safeguarded, rail professionals should be taking operational decisions and the Government should be left with strategic decisions.

Mr. Martlew made a point about fares policy, but I have listened to your strictures, Sir Nicholas. Of course, we will inherit from the Government whom he supports control period 4; that is where we shall have to start from if we get into power.

I would be interested to hear from the Minister exactly what the Government's intentions are, given the comments by the Select Committee in paragraph 34 of its conclusions. It showed foresight in saying that

"if a full-scale economic downturn were to develop, passenger numbers are unlikely to grow...as projected".

The Government specified the franchises. The Government specified underlying revenue assumptions. The Government specified underlying new passenger economic assumptions. I have asked the Minister in a question to give me those assumptions. I hope that either by written response or by oral response, we will hear that today. I have also written to the Minister about the process of red lighting and I have been told that that is all too commercially sensitive—but it is hugely important. Are the Government telling us that they are not prepared to allow hon. Members to know what their plans are in the case of an economic downturn in which the underlying economic assumptions and the underlying revenue numbers that they set for franchisees are not met? What are the Minister's ambitions? What are the Government's intentions? Does the Minister want to become the controller of the railways? We shall wait to hear with bated breath.

We are today discussing the publication of the White Paper. The transformation of the economic climate is not the only thing that has happened since. Crossrail has been approved. The Government have done a U-turn on electrification and high-speed rail. There have been more failures on the part of Network Rail; I am referring to Christmas 2007-08. The Competition Commission findings have gone against the Government. Fares have increased. The so-called 30-year strategy document has simply not stood the test of time. It will not stand the test of 30 years; it has not stood the test of two years. It was a missed opportunity to introduce credible and workable solutions, which has been highlighted in the Select Committee's report.

Photo of Paul Truswell Paul Truswell Labour, Pudsey

The hon. Gentleman is incredibly generous in giving way. I hope that I am not sailing too close to the wind when I say that his response is basically stating what he feels should be done to implement the recommendations of the report that we are discussing today. To implement the recommendations along the lines that he has suggested, would he, if he was catapulted across the Floor of the House, make more money available to rail? If he cannot give that commitment, will he at least give a commitment that rail would not be subjected to the sorts of cuts that Mr. Osborne and Mr. Cameron suggest need to be made across all Departments?

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

The hon. Gentleman has been listening far too much to his party's propaganda. I will reiterate what I said a moment ago: we will inherit CP4; that is the position from which we shall have to start.

The so-called 30-year document will not stand the test of time—it has not even stood the test of two years. It was, as the Select Committee said, a missed opportunity.

Photo of Paul Clark Paul Clark Parliamentary Under-Secretary, Department for Transport 5:06 pm, 12th February 2009

I welcome your chairmanship this afternoon, Sir Nicholas. This has been a very interesting debate. It has featured substantial contributions from many hon. Members on both sides of the Chamber—but particularly on the Government Benches—who have committed themselves to debating what is critical to our transport infrastructure. I congratulate the Select Committee, under the chairmanship of my hon. Friend Mrs. Ellman, on producing the report. Let me assure her and members of the Committee that it is an important contribution to the debate on our network. I have listened with interest to all the requests that have come in for various schemes. I will seek, before the conclusion of the debate, to respond to some of the requests relating to specific parts of the network. However, I want first to respond to the report and to what hon. Members have raised in the debate.

I seriously believe that the 2007 rail White Paper is the most positive statement about the growth of Britain's railways for 50 years. It sets out firm, costed plans for investment for the next five years, alongside long-term consideration about meeting the challenges 30 years ahead. People have said that we have had a lack of ambition; indeed, the report indicated that. That is not reflected in what has happened since the report was produced and, indeed, over the past decade. Passenger numbers have grown by about 40 per cent. in the past 10 years. The Government are investing £15 billion between 2009 and 2014 to increase capacity for up to 183 million passengers a year. For the long term, our aim is a rail network that can carry double the current number of passengers.

Between now and 2014, 1,300 extra carriages will come into service. Hon. Members referred to that. Those carriages will go to the areas with the worst overcrowding problems. About 900 of them will be for London and the south-east; 423 of those additional carriages have already been ordered and the new control period has not yet started.

This is a sign of the Government's determination to press on with investment. Of the 423 carriages that have been ordered, 92 are scheduled for Southern, 217 for London Midland, eight for Chiltern and 106 for Virgin west coast. An invitation to tender is currently out for another 320. Rather than sitting and not getting on with the job, that shows that we are getting on with the job of moving forward.

I recognise the points that have been made because I was before the Select Committee only yesterday. There were discussions about regional investment. It must be recognised that we have to invest immediately where there are serious crowding issues today. I will come to the longer-term plan shortly.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

May I ensure that I heard the Minister correctly? Did he say that the 1,300 carriages will be in operation by 2014 or that they will be ordered by 2014?

Photo of Paul Clark Paul Clark Parliamentary Under-Secretary, Department for Transport

I said clearly that they will come into service between now and 2014. Those decisions have been taken on the basis of capacity studies through the regional planning process and the Network Rail route utilisation system. In addition, the Secretary of State made an announcement today about the new express trains. Those will bring benefits across the country of faster journeys and further investment. As was recognised by my hon. Friend Ms Smith, that programme could bring jobs and security in her constituency and across the country.

Because we are far sighted, we are investing about £5.5 billion in the Thameslink scheme, which will deliver frequency and capacity across London services, bringing more than 1,400 more seats to some of the most congested routes. That will give commuters to the east and west of London direct access to the heart of the capital and 1.5 million more people will be within an hour of London's business centres.

Photo of John Pugh John Pugh Shadow Minister (Treasury)

Ms Smith raised the point about rebalancing the economy eloquently. The Minister seems to be saying that the Government are intent on facilitating more and more people in doing more and more business in London. Is that not an unsustainable objective?

Photo of Paul Clark Paul Clark Parliamentary Under-Secretary, Department for Transport

I also said that I will move on to the longer-term programme. As part of that we must link towns and cities closer together so that people can travel between them for business, pleasure and other reasons far more quickly and effectively than is possible today, hence the investment that we have put in to a number of schemes. You would not wish me to speak about road schemes, hard-shoulder running and so on, Sir Nicholas. There is a range of schemes that aim to create a better, more efficient grid, and 14 strategic rail corridors are the priorities in bringing together the towns and cities of our nation so that the balance can be redressed.

Improvements to stations across the network are also under way. The White Paper announced that £150 million will be earmarked to improve about 150 intermediate stations in England and Wales over the next five years. The national stations improvement programme will bring about a noticeable and lasting improvement in the environment of stations, which will benefit passengers. Local delivery groups jointly chaired by Network Rail and the relevant train operator have been set up to focus on the operator's portfolio of stations and identify candidate stations for funding.

The issue of performance has also been raised. The performance of passenger services continues to improve, as was recognised by a number of hon. Members. Rail punctuality and reliability is at the highest level since the current measure was established seven years ago. That has been achieved through substantial investment and improved joint working across the rail industry. At the same time, we have seen a 40 per cent. increase in the number of passengers utilising rail services. In the last year, 90.8 per cent. of passenger trains arrived on time. The Government have specified that there should be an improvement in reliability to 92.6 per cent. by 2014 as part of our challenging vision. In addition, we are specifying a 25 per cent. reduction in delays of more than 35 minutes.

Improvements due to the development of the west coast main line have been recognised. The £8.9 billion modernisation programme, which was delivered on schedule, has resulted in an improved timetable. The standard London to Birmingham journey time is down to 82 minutes. When I visited Birmingham for discussions with the chamber of commerce and various industry and business representatives, they commented on the difference that that is already making to their lives, businesses and commerciality. The fastest services to Manchester take just over two hours and to Glasgow just over four. The shuttle service every 20 minutes to Birmingham and Manchester is a further step change.

The report—and some Members—referred to the disruption experienced by passengers and freight customers on the west coast main line in early January. That is primarily a matter for Network Rail to address. It is working closely with the Office of Rail Regulation and passenger and freight train operators. Network Rail is investigating the causes of the disruptions. I understand that to date the findings show that the causes are not related to each other or to the recent engineering and enhancement on the route. The report will be published shortly.

The Transport Committee report deals in some detail with the engineering works of new year 2008. Despite the comments of some hon. Members, it is important to be clear that Network Rail is an independent private sector company. It is accountable for its performance against its business plan and to the independent Office of Rail Regulation for its performance against its licence. The ORR ensures that Network Rail complies with its licence conditions and it takes enforcement action in the event of a breach. Hon. Members will be aware that the ORR imposed a £14 million fine on Network Rail in response to the new year 2008 overruns.

From the contributions this afternoon and the work in the Department, I understand that since new year 2008, Network Rail has made progress in improving its procedures for the management and delivery of engineering works. My hon. Friend Mr. Martlew recognised that there had been improvements.

The Chairman of the Select Committee raised the issue of regulation and whether Network Rail has improved. We believe that the communication between operating companies has improved. The works undertaken since new year 2008 on the bank holidays in May and August and over Christmas and the new year have run on time and without incident. As I have said, it is for the Office of Rail Regulation to ensure that Network Rail complies with its licence conditions.

A number of hon. Members referred to what might happen as a result of the current economic downturn. A prolonged economic downturn is bound to affect passenger numbers, but because of previous growth and investment in the rail industry we believe that it will remain competitive in these challenging circumstances. However, under the current regulatory system, the risks and rewards in the rail industry are shared between the train operators and the Government. Most franchises are set up in such a way as to ensure that operators are supported during periods of economic downturn and, in turn, that they share their profits with the Government in times of strong economic growth.

At the end of the day, in terms of investment, structure and charges, it is right that the balance be met from only two sources, one being the taxpayer and the other being the fare payer. Those who suggest that all fares should be substantially reduced without saying categorically where the money would come from to subsidise the fare package are therefore being uncharitable. I am aware that the issue has been raised recently as a result of the fare changes introduced earlier this year.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

The Minister must be concerned that a number of train operating companies are considering cutting staff, and that Network Rail may cut maintenance and safety work. Surely that is of great concern, particularly as the companies are paying out large dividends to their shareholders.

Photo of Paul Clark Paul Clark Parliamentary Under-Secretary, Department for Transport

Of course I am concerned. Indeed, maintenance and the achievements that have been arrived at on many of the networks, with greater reliability and better performance, have been the result of investment in maintenance services that did not exist in the past. I know that is the case in my neck of the woods.

Various stories have circulated about train operators, but I am not in a position to name those that might be on a red light, as was suggested. However, a monitoring system operates between the Department for Transport and the train operating companies to ensure that franchise agreements are being met and that critical indicators on performance and safety are being met, exactly along the lines that hon. Members would recognise.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

I do not want to touch on the companies that are asking for extra money, but am I not correct in saying that for a small penalty they can hand the keys back to the Government if they start to lose money?

Photo of Paul Clark Paul Clark Parliamentary Under-Secretary, Department for Transport

The franchises are set up so that they do not penalise the travelling public, as happened in the south-east when Connex gave back the keys. In that case, of course, we asked the company to do so because the service was not being met. Costs are obviously involved, but the company has to provide a bond at the start of the franchise that would cover the costs of the administrative process involved in handing back the keys.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

Will the Minister place in the Library a copy of the criteria under which a red light is indicated?

Photo of Paul Clark Paul Clark Parliamentary Under-Secretary, Department for Transport

The hon. Gentleman will be aware that such information would be commercially sensitive. It would therefore be difficult to do as he asks.

The question of electrification was raised. In the White Paper, the Government said that we were keeping the case for further electrification under review. We are doing just that. Electrification makes sense on busier routes, where the high capital cost of installing electrification can be offset by the ongoing savings of running electric trains. That is why our initial focus has been on Midland Mainline and Great Western. On 15 January, my right hon. Friend the Secretary of State announced that a decision on electrification would be made later this year. Indeed, as part of that process, Network Rail is due to publish its findings in March.

Photo of Louise Ellman Louise Ellman Chair, Transport Committee

I am pleased to hear that there will be progress on electrification, but will my hon. Friend indicate the exact process by which it will happen, and which schemes will go ahead first?

Photo of Paul Clark Paul Clark Parliamentary Under-Secretary, Department for Transport

In order to ensure the best route utilisation, a process is ongoing to assess where the heaviest demand exists. That will be part of the process. In addition, there will be technical requirements on feasibility and, following on from that, the cost.

High-speed lines have been mentioned by many hon. Members. I take on board what was said by my hon. Friend the Member for Sheffield, Hillsborough about the electrification of the trans-Pennine route, and I recognise the passion with which she spoke. We announced that we will be taking forward High Speed 2, a dedicated rail link. We shall study the options for new lines. Last October, we formed the national network strategy group, which is chaired by my noble Friend, Lord Adonis; it is making progress and will report. Indications are that London to the west midlands will be in the initial stages; but, as my right hon. Friend the Secretary of State has indicated, such high-speed routes could link other towns and cities—and major conurbations in the north, which are equally important.

Photo of John Pugh John Pugh Shadow Minister (Treasury)

To a certain extent, the way in which the Minister has responded to the debate shows a colonial mindset in the Department for Transport. We are asked to look at a picture in which London is getting 800 trains and the rest of the country is getting 400. The Minister responds by pointing out how easy it is, and how much quicker, to get to London; but he does not say how quickly one can get around a region, how easily freight can be moved or how easy it will be to communicate between regional centres. The Department for Transport does not seem to be getting the point.

Photo of Paul Clark Paul Clark Parliamentary Under-Secretary, Department for Transport

We have said how easy it will be to get to London; equally, it will be quicker to reach Manchester, Birmingham and Sheffield or wherever. I recognise what has been said about the links between the cities; that is why we have the 14 strategic corridors.

I will write to my hon. Friend Graham Stringer about Manchester Victoria and the Salford stations. I am delighted that my hon. Friend Mr. Drew has welcomed the development of the Swindon and Kemble line. The subject of ticket offices was raised by Stephen Hammond. He will be aware of the ticketing settlement agreement, which takes account of a number of factors.

Photo of Paul Clark Paul Clark Parliamentary Under-Secretary, Department for Transport

No, I will not give way. As for the reopening of lines, which was mentioned by my hon. Friend Jeremy Corbyn, there are various mechanisms for that.

Sitting adjourned without Question put (Standing Order No. 10(11))