[Albert Owen in the Chair] — Rail Investment

– in Westminster Hall at 12:00 am on 17th February 2011.

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Motion made, and Question proposed, That the sitting be now adjourned.-(Miss Chloe Smith.)

Photo of Louise Ellman Louise Ellman Chair, Transport Committee, Chair, Transport Committee 2:30 pm, 17th February 2011

I am pleased to speak under your chairmanship, Mr Owen. I am delighted to have the opportunity to discuss rail investment in this Westminster Hall debate. I welcome the Minister to her place; I shall be listening carefully to what she has to say.

The Transport Committee published its report on priorities for rail investment in February 2010, during the previous Parliament. The Committee wanted to assess the value of investing in Britain's rail network and to identify essential rail priorities for the future. We emphasised the importance of protecting Government funding of £16 billion committed to rail projects between 2009 and 2014. We also identified some of the emerging priorities for the next control period, from 2014 to 2019.

We should remember that rail is a great success story; 1.2 billion passenger journeys were made last year, and 100 million tonnes of freight, or 9%, was carried by rail. The Committee emphasised in its report the importance of rail to the economy, as well as to the environment. There have been many changes since the report was published last year. We have had a change of Government and a comprehensive spending review, but the questions raised by the Committee and the priorities that we identified remain highly relevant. I shall focus on two broad areas this afternoon. First, I shall deal with the Government's more immediate rail priorities during this Parliament. Secondly, I shall look ahead to some of the important rail schemes that will require investment during control period 5 and beyond.

Following the comprehensive spending review, I am pleased to say that many major rail investment commitments have continued. Indeed, £18.2 billion was committed for that period. Although I welcome that commitment and that scale of investment, we should recognise that much of that money was already contractually committed, and works on the ground for many projects were well under way prior to the spending review. Setting out priorities and committing spending in that way was done to ensure that the rail industry had some certainty about investment, and I am glad that that could be achieved even in the current financial situation. The Government have confirmed their commitment to Crossrail and to Thameslink, although there are delays and reductions in funding.

Photo of Margaret Beckett Margaret Beckett Chair, National Security Strategy (Joint Committee), Chair, National Security Strategy (Joint Committee)

I congratulate my hon. Friend not only on her Committee's report but on securing today's debate. I am particularly glad to hear her mention Thameslink. The report mentions investment in the north, but she will be well aware that it is the order of new trains for Thameslink that will release the existing fleet to newly electrified projects in the north-west. She spoke a moment ago about the need for certainty in the rail industry. I am sure that she-and, I hope, the House-will sympathise with the concerns of the thousands of my constituents who work for Bombardier and in the supply chain, who are anxiously awaiting the go-ahead for the Thameslink project.

Photo of Louise Ellman Louise Ellman Chair, Transport Committee, Chair, Transport Committee

I thank my right hon. Friend for her comments and I agree with her sentiments. The delay is problematic in its own right, and it certainly has consequences for what is termed the cascading of rolling stock to the north, among other places. The major redevelopment of Birmingham New Street and Reading stations is proceeding.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

I reinforce the strong point made by my right hon. Friend Margaret Beckett. We must do everything that we can to maximise the possibility of keeping manufacturing in Britain. Bombardier, a British-based firm, should be considered for that if we are serious about rebuilding our manufacturing base.

Photo of Louise Ellman Louise Ellman Chair, Transport Committee, Chair, Transport Committee

My hon. Friend makes an important point. He reinforces the important link between rail investment and jobs.

Electrification that was planned long before the comprehensive spending review is going ahead, but only in part. I am pleased that the Government have confirmed the electrification of the Manchester-Liverpool line and the line from Preston to Blackpool. However, there are still problems with the electrification of the Great Western main line.

Photo of Paul Flynn Paul Flynn Labour, Newport West

On top of the other hammer blows that Wales has suffered under this Government-the cancellation of a prison in north Wales, the cancellation of plans for a Severn barrage and the loss of jobs at St Athan-comes the fact that electrification of the line to Wales will not go ahead. My hon. Friend will be aware of the great disappointment that that has caused, and the damage that it will do to Wales' perceived image in the rest of the United Kingdom.

Photo of Louise Ellman Louise Ellman Chair, Transport Committee, Chair, Transport Committee

I thank my hon. Friend for his comments. Indeed, electrification has been promised between London and Didcot, Oxford and Newbury; but there is no promise and no confirmation of electrification of the line into Wales. In December, the Secretary of State told us that discussions were ongoing with the Welsh Assembly Government, but what will happen is still unclear. I share my hon. Friend's concerns about the impact of the delay-is it a delay or a postponement, or is it a cancellation?-on the Welsh economy. In addition, the ongoing saga about inter-city trains has implications for electrification on the line, to which I shall refer later.

The Committee's report also advocated the electrification of the midland main line that links Sheffield and London. It is unclear what progress is being made there. It is clear that enhancing our rail network represents a worth-while investment of public funds, with economic regeneration and environmental benefits. The comments of my right hon. and hon. Friends reinforce that point.

It is not only investment that is important. It is equally important that we secure value for money for the public purse. The previous Government asked Sir Roy McNulty to study the rail industry and to consider how to secure better value for money. It is unacceptable that our rail industry is up to 40% more expensive than its European comparators, as the Office of Rail Regulation discovered. Sir Roy published his interim findings in December 2010. Promisingly, he has identified potential savings of up to £1 billion, which he believes can be achieved without cutting services. Like the rail industry, my Committee awaits Sir Roy's final report with great interest. Certainly there is a mood for change, and it is important that the Government seize this window of opportunity to make improvements.

The interim findings of the McNulty review suggest that the way forward is a greater alignment of incentives between the different players in the industry. The Government have already set up a high-level group with the industry to examine the options for Network Rail and train operators to work together more efficiently. I would be grateful if the Minister were to elaborate on the options that the Government are considering, and whether those aspirations will result in real long-term savings to the industry, without compromising passenger safety or service provision.

The Secretary of State has promised a White Paper on the future structure of the industry, following the findings of the McNulty review. I hope that it will spell out the Government's broad longer-term strategy for the rail industry. Do the Government share the previous Government's aspiration that increasing capacity on the rail network must be at the heart of their strategy? As passenger numbers and the amount of freight carried by rail continue to grow, we need to increase capacity. As right hon. and hon. Members know, the issue of overcrowding remains a serious problem on parts of the network, particularly at peak times. Overcrowding is a consequence of success and must not be ignored, and neither must its related health and safety issues, which are often hidden.

Giving evidence to the Committee in October 2009, the Office of Rail Regulation forecast that passenger numbers would double over the next 25 to 30 years. Alleviating capacity constraints must be at the heart of any strategy on the future of the rail network. Will the Minister tell us something about the White Paper that is expected soon? What sorts of policy initiatives will it contain and what kind of consultation will it be subject to?

The Committee recognised that rail was important for the environment, economy and regeneration. I was concerned to see that in January, when the Department published its report "Public Attitudes towards Climate Change and the Impact of Transport", it did not mention rail. I hope that that was an unfortunate omission. None the less, I would like some reassurance from the Minister that the Government recognise the environmental benefits of increasing rail travel.

I come now to the important issue of rail fares. The Government have announced that regulated rail fares will rise from RPI plus 1% to RPI plus 3% from 2012 to 2015. Disturbingly, they have stated that train operators should actively look to manage overcrowding through the fare box; in other words through increasing fares.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

I am reluctant to correct the hon. Lady as she is giving an expert explanation of the Select Committee's point of view. None the less, will she not accept that although rail fares can rise by that amount, they will not necessarily do so?

Photo of Louise Ellman Louise Ellman Chair, Transport Committee, Chair, Transport Committee

I do not totally agree with the hon. Gentleman, and I will explain why in a moment. My concern is that it now appears to be a deliberate Government policy to drive people off rail by increasing fares. Indeed, it seems rather perverse. It is true that Government policy is to increase fares by an average of RPI plus 3% . I must stress, though, that that is not an actual increase; it is an average. The reality could be a rise of RPI plus 8% for individual fares, which is a very great increase indeed. For example, the annual season ticket between Bournemouth and London would increase by £211 at RPI plus 3%, but by £645 if RPI plus 8% was applied, which is possible under the Government's formula.

Current forecasts for the third quarter of 2011 are that RPI could be 3.9%, the base against which RPI for the following year is assessed. That means fares could rise by an average of 6.9% in 2012, with individual fares increasing by up to 11.9%. Those are significant increases and a matter of great concern. We all recognise that there are economic and financial problems, but it is disturbing to think that there could now be a national policy to price people off rail. I look forward to hearing the Minister's response to that concern.

Photo of John Leech John Leech Liberal Democrat, Manchester, Withington

The hon. Lady is making an excellent speech. No one wants to see fares rising, but the economic reality is that if we are to continue investing in the railways, we must increase fares. Does the hon. Lady not think that if we are moving from the retail prices index to the consumer prices index, fares should increase by CPI plus 3% rather than RPI plus 3%.?

Photo of Louise Ellman Louise Ellman Chair, Transport Committee, Chair, Transport Committee

The hon. Gentleman makes an interesting point. We must all recognise economic constraints, but we have to consider seriously the implications of any policy that might price people off rail.

Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport

I hope that I can give the hon. Lady some reassurance. Of course we want to see passenger numbers increase. That is important for our economic future and for our environmental policies. We have had to take a difficult decision on fares in order to deliver the vitally needed rail capacity improvements. As we are dealing with an enormous deficit that we inherited from our predecessors, we have had to ask passengers to pay a bit more to contribute towards the investment that they want to see put into the railways.

Photo of Louise Ellman Louise Ellman Chair, Transport Committee, Chair, Transport Committee

I thank the right hon. Lady for her comments. I recognise the Government policy context in which these decisions are taken.

Let me now draw attention to the issue of rolling stock. If people are going to be asked to pay more for their fares, it is reasonable to ask whether the rolling stock will be adequate to ensure that people have a reasonable journey. The more people pay, the more concerned they will be if the rolling stock is not adequate. The situation is extremely confusing. The announcements made by the Department for Transport on what rolling stock is to be provided, where and when have been unclear.

When our Committee issued its report last year, we expressed deep concern at the postponement in issuing the rolling stock plan for 1,300 new carriages that were expected by 2014, and at the uncertainty and confusion the delay was causing within the industry, but we recognised that the commitment to electrification legitimised the pause in assessing exactly what rolling stock was required and when. However, since then, little real progress has been made in delivering new carriages. Instead, we recently received another announcement by the Department that 2,100 new carriages would be delivered by 2019, 1,850 of which will be net additional vehicles. As my right hon. Friend Margaret Beckett said, many of these are for the Crossrail and Thameslink projects, which will then lead to electric carriages on the network being cascaded to other parts of the country, including the north. If and when that happens, I hope that it will not be a matter of the north getting the cast-offs from the south. I expect the stock to be in good condition and well suited to meet the needs of the people in the north.

Given that the completion dates for both Crossrail and Thameslink have been delayed to 2018, will the Minister tell us when these much-needed carriages that the industry has been waiting for, will finally be delivered? How many of those carriages expected by 2014 will actually be delivered by that date?

Photo of John Leech John Leech Liberal Democrat, Manchester, Withington

Does the hon. Lady not accept that the previous Government did not have a good record on delivering on promised rolling stock?

Photo of Louise Ellman Louise Ellman Chair, Transport Committee, Chair, Transport Committee

Indeed. The hon. Gentleman may recall that previous reports of the Transport Committee during the time of the previous Government were not slow to criticise the inadequacies of the Government where we felt it was appropriate to do so, and rolling stock was one of those areas. We also have the ongoing saga of the new generation of InterCity trains. In November, the Government announced that they had narrowed their options for the replacement of the old InterCity 125s down to two: a bid from Agility Trains for a mixture of electric and hybrid trains; and a proposal for a fleet of all-new electric trains that could be coupled to new diesel locomotives where the overhead electric power lines end. I know that many of my colleagues in Wales are anxious for that decision to be made because of the impact that it will have for the Great Western main line to Swansea. Again, the Government have not been very clear about what is happening regarding that line and I would be grateful for any clarification about it.

During the next control period, which is between 2014 and 2019, and beyond, it is extremely important that we have continuing and substantial investment in the rail network, improving it to accommodate passenger growth and to alleviate unacceptable overcrowding. One of the priorities for the next control period must be investment in the rail infrastructure in the north of England. Our Committee's report shows very clearly how the south, particularly London, has benefited from rail investment. We support that investment, but we noted in the report that when we examined the amount of transport investment per head we found that there was three times as much in London and the south-east as in other regions of the country. We support investment in London and the south-east, but similar interest should be shown in the needs of the north.

The particular project that we recommended in our report was the northern hub. That bottleneck in the Manchester area critically affects the operation of both passenger and freight services right across the north of England, including in Leeds, Liverpool and Newcastle. The Northern Way study concluded that addressing the northern hub could provide economic benefits worth up to £16 billion for the economy of the north.

Investing in the northern hub remains as important as ever. However, there is particular concern about that issue, because of what has happened to the organisations that brought the project together. The combined work of the three northern regional development agencies was very significant in developing the project, costing it and working out its implications and benefits. Sadly, the project for the northern hub-the Northern Way project-may no longer be supported because the RDAs are being disbanded. Indeed, it is very unclear what will happen to the organisation that has developed and costed that project in such great detail. I would be very pleased if the Minister could confirm that she will support that project as a top-priority project for the north in the period ahead.

The longer-term investment priority is the development of a high-speed network. Our Committee welcomed the previous Government's change of policy when they decided to support high-speed rail. However, we emphasised that investment in high-speed rail should not detract from investment in the existing classic network. Moreover, if high-speed rail is important for the route from London to Birmingham-as the current Government have stated, and I agree with them-it is equally important that it extends to the north.

The case for high-speed rail has been put forward, based largely on the need for additional capacity for both passengers and freight. That argument is very important, but it is also very important that the economic impact of high-speed rail is recognised. Indeed, the Government have said as much many times. They have said that their support for high-speed rail is based on the need to reduce the disparities between north and south. That means that if high-speed rail goes ahead, as I hope it will, it must go beyond Birmingham to the north.

Photo of Andrea Leadsom Andrea Leadsom Conservative, South Northamptonshire

Does the hon. Lady accept that there are concerns about whether High Speed 2 is necessary to achieve the capacity increases that are so badly needed between London and Birmingham?

Photo of Louise Ellman Louise Ellman Chair, Transport Committee, Chair, Transport Committee

I thank the hon. Lady for her comments. That is an important issue and indeed it is extremely important that the Government spell out their case very clearly on the need for HS2, particularly given the considerable opposition to HS2 from a number of quarters. The Government must do that.

Finally, my Committee has recently returned from a visit to Brussels where we met the Transport Commissioner, European Commission officials and Members of the European Parliament, including members of the Transport and Tourism Committee. One of the subjects that we discussed was the UK's failure to apply for funding from the European Union. We received information that suggested that the EU might be willing to part-fund the cost of feasibility studies into HS2, paying 50% of those costs. However, it appears that no application has been made for Trans-European Transport Networks, or TEN-T, funding, which could part-fund the costs of looking into HS2. Indeed, when members of my Committee questioned the Minister recently in our inquiry into European issues, it appeared that the UK was rather slow, or perhaps loth, to apply for European funding. I wonder if we could receive some assurance from the Minister today that the Government will look at that issue again, particularly the possibility of securing European funding for studies into the viability of HS2.

Deciding the priorities for rail is a very important task. Our Committee's report was produced a year ago, but it is clear that the priorities and concerns that we highlighted are equally relevant today. I hope that this debate today will help to take the debate on rail priorities forward and help to secure increasing investment for the extremely important service that is our rail network.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

Before I call Mr Paul Maynard, I wish to inform Members that I will ask Mrs Ellman to make some concluding remarks.

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys 2:56 pm, 17th February 2011

It is a pleasure to serve under your chairmanship, Mr Owen, as it is to follow the Chair of the Transport Committee, Mrs Ellman, whom I hold in great esteem.

It is also a great pleasure to discuss the Transport Committee's report on rail priorities. It is not one that I have any personal responsibility for, as I had not been elected to Parliament when it was drawn up. None the less, priorities for rail investment is a worthy topic for debate, not least because of the amount of public money that our railways consume. We have a democratic duty to ensure that that investment is properly apportioned.

For me, the sacred text in this area remains the Eddington report, which the previous Government commissioned and which included several pertinent points. In particular, when prioritising investment Sir Rod Eddington stressed that we needed to focus on three main areas, namely congested urban areas and travel-to-work areas, key inter-urban corridors and key international gateways and hubs. All three were coming under pressure from increasing congestion and the associated unreliability.

As the hon. Member for Liverpool, Riverside pointed out, a lot has changed since her Committee's report was published. We have a new Government-we even have a new MP for Blackpool North and Cleveleys. We have also had welcome confirmation from the Government of the importance of infrastructure investment. Amid all the talk of spending reductions, I was pleased to learn that many of the feared cuts that we were all told were coming down the line did not materialise and that important projects such as electrification are continuing, which is welcome. It is also true that the issue of high-speed rail has assumed a much greater importance in our political discourse, and I will discuss that issue in more detail later.

One aspect of policy making has been diminished since the election, which is regrettable-maybe this is a misinterpretation on my part; I do not know. As a Member of Parliament for the north of England, I recognise that regional development agencies had their faults and their problems. They were by no means perfect organisations, and they needed immediate reform. I agree with the hon. Member for Liverpool, Riverside that one area where they made a contribution was the quality of the transport planning that they provided through the Northern Way project. I have had the pleasure of meeting representatives of that project time and time again. The quality of the work that they have done was one reason why the Government's infrastructure announcements for the north of England went down so well, and I have genuine concerns about the quality of policy making if the Northern Way does not find a niche within the new Government structures.

The north is different, and this is not just special pleading or the usual carping about London getting all the transport money. We know that there is a substantial productivity gap between the north and the south of England. I recognise that London is our national capital-a global capital, if anything-and that it needs substantial public investment, but we cannot overlook the fact that the north has, over many years, been getting a raw deal rather than its fair share.

Paul Flynn suggested earlier today that I read his book on how to be a Back Bencher. I have learned one essential truth so far, which is that it is only when an MP is bored of talking about an issue that he knows he has got his point across. With some trepidation, therefore, I shall discuss the northern hub.

When the report was first published, the northern hub was still the Manchester hub, and I take some pleasure in having played a role in getting it renamed, if only to reflect the fact that it benefits the whole of the north of England and the north of Wales from Anglesey to Newcastle. The northern hub is not only a building in Manchester, but a series of discrete projects that unlock the potential of the rich, dense rail network that exists across the north of England, and it is vital that it goes ahead. I welcome all the positive indications that we have had so far from the Minister. Every time I have bored her and the Secretary of State by asking about it, I have got a nod and a wink that it will be in control period 5, and I ask once again for that to be restated.

We have to realise that whenever we discuss inter-city travel in the UK, for those of us who are London-centric or come down here all the time, north-south journeys matter, but for business men in my constituency and across the north of England, east-west journeys are just as important. People in Manchester occasionally need to go across the Pennines to Leeds and even further to Newcastle. Sometimes, my constituents want to go to the north Wales seaside, because they have had enough of Blackpool-surely not. East-west travel matters, and the Council for the Protection of Rural England backs better trans-Pennine rail links, although I am not sure whether it would do so with HS2.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

I strongly agree with the hon. Gentleman's view about east-west links being equally important. Does he agree that it is vital to keep the Woodhead tunnel for future transport use and not let it be poisoned by having electricity cables put through it? The previous Government arranged for that to happen, and I hope that the present Government will continue to preserve the tunnel for future transport use.

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

As with all matters relating to rail freight, I bow to the hon. Gentleman's superior knowledge, and would not dare trespass on it for fear of being shown up as an ignoramus.

I shall discuss HS2, because it is so controversial and cannot be avoided. The arguments are difficult, and whichever side of the argument someone is on their policy must be evidence based, because it is only through an evidence base that the politics of the proposals can start to be addressed. I recognise that there are arguments on both sides. As a northern Member of Parliament, I see immense potential benefits, but I am sure that if I were an MP in an area affected by the proposed route, I would have enormous concerns. It is, however, dangerous to base our argument solely on a few simplistic notions. Building the railway will not in itself heal the north-south divide, and it is foolish to base the argument on that soundbite alone. It is equally dangerous to base it on saying that there will somehow be magnificent environmental benefits by domestic aviation being rendered unnecessary. At the moment, we cannot see even one or two years ahead in our domestic aviation environment, let alone 15 to 20. Who knows where Heathrow will be by then?

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

The evidence from other high-speed rail systems around the world is that where they are over sufficient distances-which, admittedly, probably means further than Birmingham-there is something like an 80% drop in air traffic over those distances. London to Paris is a good example.

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

I agree almost entirely with that point-but perhaps only 80%. It very much depends on where someone is flying from and where they are going to, and I suggest that in 15 years' time perhaps no one will be flying domestically to Heathrow, if only because it might have ceased to be an international hub. We might all be flying to Paris, Amsterdam or Frankfurt, but that is another matter entirely.

The key variable in the discussion on HS2 is demand. Whether demand will increase is contested, but as someone who travels regularly on the west coast main line, I know full well that that line is already reaching capacity. The east coast main line is also struggling, and we cannot have people being herded into pens at Euston station on a Friday evening and say that we are not at capacity already. I accept entirely the argument that extra capacity has to be provided, but it is not simply a matter of expanding a few platforms here and inserting a few carriages there, making cattle class a literal concept for millions of travellers. We have to discuss what type of capacity to provide, and I realise that that is perhaps a confused area for people on both sides of the argument.

Photo of Tom Harris Tom Harris Labour, Glasgow South

The record will show that the hon. Gentleman has just referred to a literal cattle class. I hope that he will take time to examine exactly what that means. When I was in a previous position and people used to challenge me about whether it was right to treat humans in the same way as cattle, I was always quick to point out that the cattle's final destination was somewhat less enjoyable than Paddington.

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

I accept the hon. Gentleman's point, but the conditions that many passengers are forced to face on our inter-city trains are analogous to those experienced by animals, even if their end destination is perhaps more pleasant.

Photo of John Leech John Leech Liberal Democrat, Manchester, Withington

My hon. Friend has mentioned that he uses the west coast main line regularly, as do I. The trouble is that if the number of west coast main line trains from Manchester to London were increased from three to four an hour, it would have a detrimental impact on local services. That is why high-speed rail is so important in ensuring that we can maintain local and inter-regional services as well as the inter-city ones.

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

The hon. Gentleman has anticipated my next point. I take entirely the point that the network of high-speed rail that has been mapped out links areas with a high concentration of service industries, which is key to saying that the predictions for demand are more robust than they were, for instance, in Spain, where Madrid and Seville were linked. Seville had a high level of heavy industry but no service industry, so no demand occurred.

I want to make a number of other points before concluding and allowing as many hon. Members as possible to participate in the debate. May I make a plea to the Minister on open-access rail? We have just seen the sad failure of the Wrexham and Shrewsbury service, which was a good example of open access, but it failed to make money. There are other examples around the country, such as Grand Central, which have shown that open access can work. I urge the Minister unambiguously to state her support for open access in the forthcoming White Paper, and indeed today, because many open access companies are uncertain about their future. In Blackpool, open access is perhaps our only chance of getting a link to London. I urge her, therefore, to make some positive noises on open access.

In conclusion, whenever we write reports, there is always the temptation to come up with a wish list, and I have fallen into the trap myself today by highlighting the northern hub. Wish lists are easy to make, but it is far harder to have a discussion and come to a view about how to prioritise policy making. How do we reconcile all the different competing local priorities that we each have in our constituencies with the apportioning of public money? That is not easy.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

As a north Wales MP, my question concerns the extent to which there should be a recognition of the economic impact of railway investment, and to what degree the investment should take regional variations into account. My understanding is that investment in railways does not, for example, take into account investment in Wales, so we cannot even compare investment in Wales with investment in other parts of the United Kingdom. Should we have a system that allows us to identify investment in Wales as a percentage of overall investment in the railways?

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

It is important that we have more local decision making. It is easy to say such things, and we all do-we all talk about localism now-but we have to realise that it is not a case of build it and they will come. We recently heard evidence about Stratford International rail station, which has no international rail services. Merely building transport infrastructure does not guarantee passengers or even economic growth. Those involved in local government often place too much hope in signature schemes, which they spend public money on promoting. They tell us that those schemes will be transformational, but, 10 years down the road, they are shown to be nothing of the sort.

We need more innovation. Yes, it is easy to say that, too, and we all do. Small local schemes-a passing place here, a passing place there, a slightly longer platform somewhere else-can be cost-effective ways of increasing capacity. However, priorities also need to be decided at the regional and sub-regional levels, as well as at a national level. We have an increasingly complex and dense map of economic decision-making organisations. We have travel-to-work areas, city regions, local enterprise partnerships, strategic transport partnerships and smaller, micro-local organisations. One of the best transport submissions that I have ever seen came from a body called Upper Calder Valley Renaissance. It was incredibly powerful and full of good ideas, with a real understanding of the local transport economy, but it covered a micro-area.

I make a plea to the Minister to somehow grasp that nettle. We have a profusion of expertise out there, which enables us to make good quality, evidence-based decisions at local level. I despair when I hear the Department for Transport arguing the toss over the siting of a vending machine on a platform at Crewe station, because that has nothing to do with the Department. However, the Department has a role to play in ensuring that rail investment decisions are based on the greatest economic benefit and that proposals are evidence based. We can then worry about the politics.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North 3:12 pm, 17th February 2011

It is a pleasure to speak under your chairmanship, Mr Owen. It is also a pleasure to follow the good speeches that we have heard so far, especially from my hon. Friend Mrs Ellman, who is the Chair of the Transport Committee. I have been a member of the Committee for the past few months, and I have much enjoyed that time.

I am a passionate lover of, and believer in, railways. Even when they were unfashionable, I still believed that they would be the transport of the future. I suspect that they will outlive the internal combustion engine and possibly even air flight and that, however far ahead we look, there will still be railways. I have a real interest in passengers and freight, and I would like to think that I have some informed proposals to make.

I should declare some interests. I am the chair of the ASLEF group of Members of Parliament. I am also a member of the National Union of Rail, Maritime and Transport Workers group, and my constituency fund received RMT donations before the last election. However, the views I express today have nothing to do with anyone else-they are purely my own-and I would like to think that I have given them sufficient thought to make them worth while.

Like Eddington and others, I am somewhat sceptical about HS2. That is not because I would not, in the best of all possible worlds, want a superb high-speed line that went everywhere. However, ours is a relatively small, densely populated country, and given that funds are, inevitably, limited, there is, as Eddington suggested, a considerable opportunity cost involved in spending money on HS2 rather than other things. It would also be expensive.

I think I can also make the case that HS2 is not absolutely essential to provide the transport that we need. We need lots more investment in existing passenger routes. Improvements to existing routes could make an enormous difference to their capacity. There are a number of problems on the east coast main line. There are two tracks at Welwyn, and we need another viaduct so that we can have four. That bottleneck causes serious problems, and that would be the case particularly for high-speed trains, especially during peak hours of commuter traffic. We therefore need another viaduct at Welwyn.

Further north, we need a flyover where the Cambridge trains branch off at Hitchin. We need passing loops at Peterborough and a flyover at Newark. If we had those, we could have 140 mph non-stop working between King's Cross and Edinburgh if we chose to. Indeed, in 1992, a trial run was undertaken between King's Cross and Edinburgh, with a two-minute stop at Newcastle. The journey was done in three and a half hours based on a standard operating speed of 140 mph, so these things can be done. It is interesting that the proponents of HS2, looking into the future, came up with a time of three and a half hours for services between King's Cross and Edinburgh-exactly the same time as was achieved in 1992.

We need new signalling and higher running frequencies. We can have much higher frequency running if we have modern signalling. One problem is that we have 50-year-old signalling systems. Geographical interlocking signal boxes were installed in the 1960s and they are now out of date and need replacing. With modern signalling, we can achieve higher frequencies and faster throughput.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

As a Welsh Member, I would be fully in favour of electrifying the south Wales line. As far as the north Wales coast line is concerned, the hon. Gentleman is completely right that signalling improvements could make a huge difference to the frequency and speed of services, and that would be critical to the area's economic success.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

Indeed, and that is true not just of north-south routes, but other routes, too.

Unfortunately, we have a lot of ancient equipment on the railways. It was worthy in British Rail's time, but we have moved on. One problem with privatisation is that companies have no great incentive to improve investment in such things when they are trying to run as profitably as possible with existing equipment. Some people, including Eddington, suggest that capacity on main lines could be doubled with modern signalling and more frequent running. We could have trains every 180 seconds on those routes if we get the modern signalling.

We have heard a lot about extra rolling stock. In the short term, there are more than 100 unused carriages in Ireland. They are essentially Mark IIIs, and they could be immediately imported, re-bogied and used on main lines in Britain. Actually, they are more modern than our Mark IIIs because they have automatic doors, rather than slam doors. They could be bought cheaply now and installed quickly on our routes. That is a short-term fix-obviously, we want more investment and more rolling stock to be built, particularly by Bombardier-but we can make such changes.

On the west coast main line, the maximum operating speed will be 130 mph because there are tighter curves than on the east coast main line. However, 130 mph operation with modern signalling and high-frequency trains would still be sufficient, particularly if we got freight off the lines. That brings me to my next proposal, which is to get freight off the lines. Those who know me well will know that I have been proposing for a long time that we have a dedicated freight route from the channel tunnel to Glasgow, which would link all of Britain's main conurbations. Why do we need a dedicated freight line? When it comes to existing freight routes, passengers and freight do not mix. They have different operating speeds and so on. Time and again, when there is a bit of a problem with a passenger train, the freight trains will be parked on one side while the passengers are given priority-people get much more upset than freight when they are delayed. Of course, freight operators get upset, but they have to suffer. However, if we have a dedicated freight line with no passengers, we would overcome those problems.

Photo of John Leech John Leech Liberal Democrat, Manchester, Withington

The hon. Gentleman has been a long-time supporter of a dedicated freight route, but is it not possible, with the onset of a High Speed 2 line, that the extra capacity on the existing network would be enough to provide extra routes for freight movement? I totally agree that we need to move more freight from road to rail, but with the onset of an additional, high-speed line there would surely be enough capacity on the existing mainline networks to provide the necessary service.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

The hon. Gentleman raises the point that I want to address now. The problem with putting more freight on such routes is that it would be impossible to fund the provision of sufficient gauge. It would be prohibitively expensive to make all the tunnels, bridges, platforms and so on able to take freight. We must have trains these days that are capable of taking full-scale containers-that is W10-and I suggest a scheme that could take full-scale lorry trailers on trains. Hauliers would put their trailers on the trains and they would be taken straight through from Glasgow to Rome, or Rome to Glasgow. I have spoken to the logistics managers of big companies and asked whether they would like to bring their water, wine or whatever from Bordeaux, which is a favourite town of mine, to Birmingham. They say it would be wonderful-fabulous-to send it all the way on the train. What they do now is train it to the coast of the continent and then put it on lorries. That transit would become unnecessary. They could roll a trailer on in Rome or Bordeaux and roll it off in Birmingham or Glasgow.

The problem with trying to upgrade all the existing routes for freight is that there would have to be a through-operation for continental freight trains. They are larger gauge and cannot get through our platforms, because they are wider, or through our tunnels or under our bridges, because they are taller. Certainly we could never have lorry trailers or double stack containers, as we are suggesting. To get serious volumes of freight through, a dedicated freight route is needed, and that is what our scheme is about. As I have said, I have no pecuniary interest in it. I have been passionate about it ever since I heard about it some years ago, and I have spoken on many platforms. I took a team of people to see Geoff Hoon when he was Secretary of State for Transport; they included representatives of supermarkets, Eurotunnel, the rail constructors and AXA-the insurance giant that funds terminals. There were 15 of us. I think that we answered every question put to us adequately. We could not persuade the Secretary of State then, but I hope that the present Government may listen sympathetically, at least.

What I propose could be done very cheaply. We have a precise route, which would involve only 14 miles of new route, nine of which would be in tunnels. The route would, as I have mentioned, use the Woodhead tunnel. The rest would be on existing under-utilised routes and old track bed. Initially we put a cost of £4 billion on it. One of the rail constructors said it could do it for £3 billion. We are now being generous and suggesting £6 billion; but that is still one third of what we propose to spend on Crossrail-which I also support. Nevertheless, our whole scheme, with its 400-mile route, would cost a third of what we are to spend on Crossrail, and would be commercially viable, because of the amount of traffic on it.

Photo of Tom Harris Tom Harris Labour, Glasgow South

Just for the record, and so that we are talking about exactly the same figures, is my hon. Friend aware, when he talks about the scheme costing a third of what Crossrail does, that the Government's funding of Crossrail is less than £6 billion, and is a third of the total?

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

Indeed. I suggest, although I am a public investment person, that the scheme I am describing would attract outside investment. Already, at the meeting with Geoff Hoon, AXA said it would fund the terminals. It already does that. The prospect would be commercially viable. We suggest it would take 5 million lorry loads off the roads.

Finally, the scheme would make a massive difference to carbon emissions. Heavy freight taken by road produces 12 times as much CO2 per tonne-km or tonne-mile as freight taken by rail. Even lighter freight produces six to eight times the amount. That is a massive carbon saving from rail. Every tonne we put on to rail makes a substantial saving in CO2 emissions on those 5 million lorry loads a year on a 400-mile route. That would also transform the links between the northern economies and the continent of Europe and breathe new life into the northern, Welsh and Scottish economies. It would not just be about the south-east. At the moment lorries must get through the treacle of the south-east. With a through, dedicated rail freight route we would overcome that problem. It would be of enormous benefit to colleagues who represent northern constituencies. Instead of being peripheral to the core of the European economy they would become part of the central European economy, which would benefit them and the country enormously.

Photo of Duncan Hames Duncan Hames Liberal Democrat, Chippenham 3:24 pm, 17th February 2011

I want to express to Mrs Ellman my appreciation for the work of her Committee in producing its report, and providing us with the opportunity to debate an issue that is vital not only for our railways but our economy and environment. The report identifies nine priorities for rail investment in control period 5, from 2014 to 2019. I want to address three in particular: rolling stock, to deal with capacity constraints, electrification and operational strategy, such as new signalling technology. I do not expect the Minister to make my constituents a national priority, but I make no apology for pursuing their interests, which enables me to show the wider merit of the proposals in question for the rest of the country.

Any debate about major infrastructural investment decisions needs to take a long-term strategic view, and should include all parts of the supply chain for the industry. It is a matter of concern that no such long-term strategy exists in the rail industry. We do not want to risk directing public funds to the wrong projects, or to poorly timed projects, in an unco-ordinated way, as it is costly and inefficient to stop and start again. Nor is it a good idea to subject major transport investment schemes to the vagaries of political, or even economic, cycles. A new planning framework, extending beyond the current five-year planning process of the Government and the Office of Rail Regulation, setting out a clear vision for investment, covering a period of as much as 25 years, would go a long way to combating that short-termism. Longer franchises are also a necessary component of longer-term planning. Suppliers would be able to invest with more confidence, particularly in the arena of technological innovation. The lack of a long-term strategy currently makes it difficult to research and develop the technologies that ultimately save travellers time and taxpayers money.

The Committee identified the Manchester hub as a top priority for control period 5. I would not want to detract from its observations, but a similar logic applies to Bristol and its travel-to-work area. Bristol is the biggest city outside London in the south of England and the eighth largest in the United Kingdom. From a commuter perspective, on Brunel's railway, Bristol looks like an attractive proposition, which it is as long as people do not mind how full or late their train to work might be. Network Rail's Great Western route utilisation strategy, which was published a month after the Transport Committee's report, identifies Bristol's rail capacity at peak times-and, indeed, the performance there-as key gaps that will be in need of attention and investment in control period 5. Bristol Temple Meads, in particular, is a pinch point on the network, and passenger numbers are projected to grow by 37% by 2019. That will result in passenger delays, which are already among the worst on the network, increasing by more than a third.

The route utilisation strategy isolates several key regional services that are suffering severe overcrowding and on which investment in extra carriages will reap significant benefits for capacity and connectivity. For example, five extra vehicles on the Cardiff to Portsmouth line, which passes through Bradford-on-Avon in my constituency, would make it possible to provide two extra services in every morning peak, and three each evening. Just one or two carriages from the humble 153 class, allocated to the trans-Wilts line, would also reduce the number of passengers in congested Bath, who only want to get across Wiltshire.

Further electrification of the national rail network is to be welcomed. Electric trains are cheaper, faster, greener and more reliable than their diesel counterparts. They transport a greater number of passengers, and since they are lighter and cause less infrastructural wear and tear their operating cost is roughly half that of their diesel equivalents. The Great Western main line, which clearly is not anticipating the benefits of High Speed 2, has one of the strongest cases for electrification. I welcome the Transport Secretary's announcement before Christmas that the line from Paddington would be electrified as far as Didcot, Oxford and Newbury. I understand the need to make decisions about powering future inter-city services, which have delayed decisions about the rest of the line. However, I ask the Government to bring forward their proposals for further electrification of the line, to give the rail industry, businesses and passengers alike the certainty that they need to plan for the future.

I have two more points to make on the matter. First, I ask the Minister that electrification should not just be on the line to Bristol Parkway, but also the line through Chippenham and Bath to Bristol Temple Meads. Secondly, I suggest that it would be of benefit to extend the planned electrification of the line to Newbury as far as Westbury. Westbury is not only a more logical network staging post on the line from Reading but a useful interchange for many journeys, and it was identified by Network Rail as needing investment during the next funding period.

On operational strategy, one investment priority that provides opportunities but has not received as much attention as others is new signalling technologies. That is unfortunate, as smart signalling technologies could secure serious improvements in efficiency, environmental performance and capacity within any given infrastructure. Invensys Rail, headquartered in Chippenham in my constituency, is an internationally renowned company at the forefront of developing control and communications technology. On the potential environmental wins of smart signalling, the European rail traffic management system, which Invensys is helping to implement, could enable a 46% reduction in carbon emissions from rail transport by 2030. The system creates wireless connections between trains and control centres, which would be a step change from current infrastructure on our railways. The links can be used to measure energy use and send instructions to trains to reduce their consumption whenever possible. However, the technology would have to be embedded in both rolling stock and track-side infrastructure, which would require joined-up organisation and long-term investment.

To take advantage of such technology, we must develop a more strategic view of the rail supply chain. It is a good time to begin that process. The McNulty value-for-money study is nearly complete, and the Transport Secretary is establishing a high-level group to examine the railways' future further.

Firms such as Invensys have an important role to play in advising policy makers on the potential of new technology. They are not just a shop window from which we pluck impressive bits of kit. Their technology has been developed in response to the needs of rail systems around the world. As a result, they have accumulated expertise that can make a valuable contribution to discussion of the future of the UK network. I was pleased that the Minister accepted my recent invitation to visit Chippenham in order to see for herself the innovations spearheaded by Invensys. I look forward to welcoming her to Wiltshire in due course.

Among the investment priorities identified by the Transport Committee's report are several examples of low-hanging fruit-good value, small-scale projects that would not involve the major infrastructure developments of high-speed rail or the complexity of fixing regional bottlenecks. In that respect, the report echoed Eddington's finding that smaller-scale transport interventions are often the most cost-effective solutions and acknowledged that many small but growing communities around the country could reap substantial benefits from better access to the rail network. I wholeheartedly agree, as my constituency has two good examples, the towns of Melksham and Corsham.

I have made several appeals in Parliament on behalf of the campaign for an improved service on the trans-Wilts line, which runs from Swindon to Salisbury via Chippenham, Melksham and Trowbridge. Members can find out more about it on the website transwilts.org.uk, organised by the community rail partnership. Melksham is the fourth largest town in Wiltshire by population, yet its rail service is derisory, consisting of just two trains a day at times that are, frankly, useless for residents hoping to commute by train.

The trans-Wilts line was well used until the current Great Western franchise began in 2006, when the previous Government dropped the requirement to provide a decent service on the route. As I pointed out to the Secretary of State in November when he announced 650 carriages for the network, just one extra carriage allocated to the line could provide more services at economically meaningful times of the day, connecting the county's population centres and alleviating pressure on commuter lines in the Bristol area. Demand for the service is strong, and it is supported by the local business community, Wiltshire council and other local Members of Parliament, co-ordinated by an excellent campaign group, the Trans-Wilts Community Rail Partnership. In recent weeks, 1,500 people and 150 businesses have completed a survey on the website about how they would use a better service on the line.

In my correspondence with the Minister, I have received some encouraging signs from the Department about the trans-Wilts campaign. Once more, I ask her to examine closely what benefits could accrue from such locally driven initiatives. Colleagues will forgive me, I am sure, for going to such lengths to make the case for my constituents. They might want to consider what I will call the Melksham challenge. Can they identify a settlement larger than Melksham-it has more than 20,000 people-with an open station that has a passenger rail service as poor as our two services a day each way? I believe that it is an exceptional case.

Photo of Andrew Gwynne Andrew Gwynne Shadow Minister (Transport)

I am sorry to disappoint the hon. Gentleman, but the town of Denton, which I have the privilege to represent, has a population of 32,000, an open station and one train a week, in one direction only.

Photo of Duncan Hames Duncan Hames Liberal Democrat, Chippenham

I stand corrected. I hope that the hon. Gentleman will appreciate the opportunity that I have given him to make the case on behalf of his constituents. I would argue that neither Denton nor Melksham deserves to be left any longer in such a plight.

I know that other Members want to speak, so I will conclude. I have tried to use examples local to my constituents to illustrate a few national discussion points about the future direction of rail investment. Each region, area and sector of the industry-indeed, each Government-has had its own priorities for the future, but we are discussing substantial investment commitments that will far outlast this Parliament, the political careers of many of us and the current economic cycle. Rail planning has too often been characterised by short-termism and a lack of strategic vision. The coalition Government's stated belief is that

"a modern transport infrastructure is essential for a dynamic and entrepreneurial economy" and that

"we need to make the transport sector greener and more sustainable."

I could not agree more, and I do not think that any Member here would depart substantially from that view. It is certainly consistent with the Transport Committee report that forms the basis for this debate. Our challenge is to take a long-term strategic view, interact with all players in the rail supply chain, engage with the businesses and communities that use the railways and align our objectives for rail planning with wider economic and environmental aims.

Photo of Tom Harris Tom Harris Labour, Glasgow South 3:37 pm, 17th February 2011

I have been involved with the railway industry to a greater or lesser degree for the best part of 20 years now, but I have never suffered the ignominy of going native. When I was the Minister with responsibility for railways-the Minister is welcome to use this joke if she wishes, although most of her audiences will have heard it a number of times from me-I used to joke that although I had succumbed to the lure of the railways and started buying railway magazines regularly, I was always careful to buy a copy of Playboy and put the railway magazine inside it to avoid embarrassment.

There is a healthy turnout of right hon. and hon. Members here. It says something about the lure of the railways that 80% of our constituents do not use them-I expect that it is more than 80% in most constituencies-but the subject attracts and engages Members of Parliament. I suspect that most of us receive more letters a week from our constituents about railways than about motorways or local roads, despite the fact that roads are a vastly more popular mode of transport.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

Are the railways regarded as a national treasure like our forests?

Photo of Tom Harris Tom Harris Labour, Glasgow South

I will refrain from trespassing on the Government's sadness at this juncture.

Although I do not stand every weekend with a flask of tea, a pair of binoculars and a camera at the end of the platforms at Glasgow Central, I am, if not an enthusiast, a strong supporter of the railway industry. I congratulate the Government, because most of us feared the worst when this shower came in.

In the previous Parliament, the Labour Government did a great deal to invest in the railways to try to improve the services that our constituents rely on. The figures show that we have the largest number of passengers travelling on the railways, apart from during the wartime period, since they began. We also have the best safety record and there are more services running per weekday than at any time in the history of the railways. There was concern upon the arrival of the new Government, whose Ministers seem unable to speak without using expressions such as, "Cleaning up the mess left by the previous Government," and talking about deficits and so on. We assumed that that would be a simple mechanism and excuse for starving the railways of investment. However, I must say, in all seriousness, that that has not happened, and I am delighted about that.

I am also delighted about the Government's commitment to High Speed 2, and I regret that my own Government only saw the light on high-speed rail in the latter part of their period in office. That was a mistake, and I accept my own personal responsibility for not pushing it as hard as I could have done when I had the opportunity to do so. I was the Minister who saw through the Crossrail Act 2008, so I am delighted that Crossrail, as well as Thameslink, will be fully funded. There is a lot to celebrate in relation to the railways-there always has been, even at the most difficult times in the network's history. We have now had two successive Governments who seem to have a genuine commitment to growing the network.

On procurement, my right hon. Friend Margaret Beckett, who is no longer present, mentioned that the manufacturing base of the railway industry in this country is, sadly, significantly smaller than it has ever been. She mentioned Bombardier in particular. I totally understand the pressure that Ministers are under in relation to procurement and an open procurement process throughout the European Union. The Minister will be aware, and she will have been told by her officials, that certain European countries somehow manage to get around the procurement rules and, miraculously, give very large and helpful contracts to their domestic manufacturers rather than to foreign competitors, which is something that Britain has, sadly, never managed to do.

I do not expect the Minister to deviate from her line-I understand the legal ramifications, if she were to say that she agrees with me in any respect at all-and I do not even expect her to mention this when she makes her summing-up speech, but she will find very little, or no, opposition from my party if she could find a way of making it easier, within the rules, for British manufacturing companies to be given the same kind of contracts that foreign companies get from their own Governments. If she has that fight with the Treasury, she will have my full backing.

Luton is very well represented on the Transport Committee, and my hon. Friend Kelvin Hopkins made a point about signalling, which is absolutely crucial. I will not labour the point, because he made it very well, but, given that there is no commitment to building new lines outside HS2, if we are to get more trains more frequently on the existing network, the only way of increasing capacity is to invest in new signalling. When we were in Brussels last week, we heard about the ongoing Galileo project. It is a new satellite system that might, in a couple of hundred years, if it is given an infinite amount of money by every country in the European Union, be able to go into operation. It is the kind of global positioning system that would help provide railways with a satellite navigation system in future, provided that it is accurate enough, which it is not yet. Perhaps Galileo, if it is given an infinite amount of money, might be able to provide that solution.

Value for money is crucial to the railways. My hon. Friend and I are members of the same party, but I hope that he will not object if I say that we come from different parts of it. We have a different view of who owns the railways and whether public or private ownership is the right way. I shall let you conclude for yourself, Mr Owen, which side I fall on and which side my hon. Friend supports. I do not think it matters much whether Network Rail is publicly or privately owned. The fact is that the McNulty review on value for money is absolutely crucial, if we are going to identify ways to cut the costs of the railways.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

McNulty has concluded that our railways cost up to 40% more than continental railways to run. The only major difference between them and us is that they are publicly owned and integrated, while we are privately owned and fragmented. I have made that point to the Secretary of State, who did not strongly disagree.

Photo of Tom Harris Tom Harris Labour, Glasgow South

I am grateful, as always, for my hon. Friend's intervention, but I disagree with him. Network Rail has had imposed on it an obligation to improve its efficiency and make significant improvements year on year. I do not believe that it is a failing organisation, or that it matters whether it is privately or publicly owned. I am glad, however, that the Secretary of State has thrown out any pretence that Network Rail is a private company, inasmuch as he does not seem to care whether the National Audit Office will, with the stroke of a pen, commit Network Rail's debt to the public books, which Ministers in the previous Government went to great lengths to avoid. The Secretary of State has taken a more relaxed, and probably more sensible, approach. By the end of this year, Network Rail may well be categorised as a nationalised company. However, if it is not efficient and is not doing the job, does it really matter who owns it? We must get efficiencies back into the railway industry, and we must make sure that the public purse, which is asked to pay a significant amount of the cost of the railway industry, is getting value for money. That is the way to restore people's trust in the railway industry.

In the run-up to the general election, the Labour Government had a much greater willingness to look at longer franchises. The franchising process itself costs huge amounts of money, not only for the competing companies but for the Department for Transport. The figure of £5 million is often quoted as the cost to the Department, and the longer the franchise, the less often that cost has to be borne. Recently, I had an interesting conversation with an ex-civil servant, who shall not be named. He told me that the reason why seven years was seen as the best period for railway franchises to begin with-from 1995, when the railways were privatised-was that they would start in 1995 and end after the first term of an unpopular Labour Government, at which point, the Conservatives would be able to come back in and look again at the franchise system. But things did not quite work out that way. Seven years is clearly too short a period, and some of the franchises that have been let recently are, for practical reasons, even shorter than that. I hope that we move to a longer franchise period of, perhaps, a standard 10 years, with a two or three-year extension, depending on performance.

I will mention open-access and freight operators in the same breath, because those two users of the network are entirely free of public subsidy of any kind. Open-access operators are, in my view, a good thing. That may not be the view of certain officials in the Department, but we should welcome a private company if it can come in and run a profitable passenger service between two points without seeking any public subsidy, without taking any of the revenue from existing franchises, and without causing any delays to other franchises or to freight operators. I am disappointed that the Wrexham, Shropshire and Marylebone railway finally shut up shop at the end of January, which was a great blow to those people who used it. I say to my hon. Friend Mrs Ellman, who chairs the Transport Committee, that open-access operators are of great interest to the wider railway and to the travelling public. I hope that, at some point soon, we will have the opportunity to look at the whole open-access framework in order to think about what makes open access valuable, what makes it work and, crucially, what makes it fail.

My hon. Friend the Member for Liverpool, Riverside has mentioned fares, and I hope that the Minister will address that issue when she speaks. When Lord Adonis was Secretary of State for Transport, he made an instruction to the train operating companies that resulted in a radical change from previous practice. As has already been said, the retail prices index plus 1% fares annual increase was interpreted in a very generous and broad way by the train operating companies. The highest increase had to be RPI plus 1%, but the train operating companies would take a basket of fares. Within that basket, there could be reductions and increases by up to RPI plus 6%. However, Lord Adonis said that all regulated fares must be increased by a maximum of RPI plus 1%. That took away a lot of manoeuvrability and flexibility from train operating companies, who obviously had a vested interest in increasing season tickets and other fares by more than RPI plus 1%. There may well be perfectly valid reasons for moving away from that approach. If possible, will the Minister say something about where we are now and what effect that policy has had during the past 18 months or so?

Innovation does not sound as if it is directly related to priorities for investment, but the issue comes back to value for money. The criticism made by my hon. Friend the Member for Luton North of the privatisation of the railways is entirely valid in the following respect. It is the only privatised industry in which innovation virtually disappeared-from the point of privatisation until now. In almost every other industry that was intrinsically profitable and was therefore privatised, innovation flourished. However, that has not happened in the railway industry. I tried to do something about that when I was the Minister, but there is very little that the Minister and the DFT can do, because it is up to the industry. If there is a level of innovation that can transform the processes within the industry and the passenger experience, that is how we partly move towards a situation in which we develop better value for money for the passenger.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

One of the problems is that the railways are long-term and expensive and private companies have short-term balance sheets. Inevitably, the tendency is to sweat the assets to maximise profit in the short term and leave long-term considerations to others.

Photo of Tom Harris Tom Harris Labour, Glasgow South

That is undoubtedly that case, but I do not accept that that is necessarily an immovable barrier to innovation. Network Rail is the greatest purchaser and procurer in the whole of the industry and it works in the long term. Frankly, many of the manufacturing companies that rely on contracts from Network Rail want to deal in long-term investment and want a long-term reassurance that the work will be there 10 or 20 years down the line. If the will is there, innovation can happen and, as I have said, that is irrespective of whether the industry is privately or publicly owned.

I shall say a few words about High Speed 2. I have long been a supporter of the project, although not on environmental grounds. As Rod Eddington said in his 2006 report, there may well be a case for high speed on capacity grounds, but there is probably not an environmental case. In addition, there is probably not a great case in terms of connectivity, because Britain is a relatively small country and is already pretty well connected. However, there is a case for high speed on capacity grounds. When we get letters and complaints from our constituents, apart from fares, capacity is the burning issue at the moment. It has been for a number of years and will continue to be until we do something serious about capacity. HS2 will relieve capacity on the west coast main line, and I hope that it will do something for freight as well.

I worry about the debate that is developing in this country on HS2 and that supporters of it are dismissing out of hand the concerns of people who live along the line and colleagues who represent communities based along the line. I hope that we can conduct that debate in a more consensual and less provocative manner.

Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport

The hon. Gentleman is too pessimistic when he says that the supporters of HS2 dismiss the concerns of local communities. As far as I know, the vast majority of supporters of HS2, including the Government, take those concerns very seriously. We believe that significant efforts need to be made to mitigate what will inevitably have some local impact on communities.

Photo of Tom Harris Tom Harris Labour, Glasgow South

I accept the Minister's reassurance on that. I simply speak from the point of view of reading reports of the debate that is going on. I am not trying to separate the arguments; I am trying to bring people together. I make the point that people's concerns are not down to nimbyism or the fact that they are selfish or somehow anti-public transport. People have valid concerns, which can be overcome. HS2 is a nationally important strategic piece of infrastructure that must go ahead for the good of the country, but we cannot sweep those concerns under the carpet. I have heard the Minister say that those concerns will not be swept under the carpet, and I therefore hope that between now and when construction starts, we can come to some kind of agreement and compromise. We need to accept that those concerns are absolutely valid and that people have a perfect right to protest and raise concerns about something that might well have an adverse impact on their local environment. I thank you for giving me the opportunity to speak, Mr Owen.

Photo of Stuart Andrew Stuart Andrew Conservative, Pudsey 3:56 pm, 17th February 2011

As a good Anglesey lad, may I say what a pleasure it is to serve under your chairmanship, Mr Owen? I congratulate Mrs Ellman on securing the debate. I will try to be as brief as possible because I know that other hon. Members are keen to contribute to this important debate. Enhancing our rail network is something that will benefit all of us in all parts of our country.

Even in these very difficult financial times, it is good that the Government have shown their commitment to our railways. The billions of pounds that they are investing are to be welcomed. I am particularly glad to see that there is a rebalancing of the amount of money being spent on transport projects across the country. Other hon. Members have spoken about national projects, but I shall be unashamedly parochial and talk about my region. Obviously, I have to speak up for the north of England, particularly Yorkshire and Leeds.

On the comment of my hon. Friend Paul Maynard about the northern hub, I congratulate him and others on renaming it. The term "Manchester hub" created a divide in the north and those of us on the right side of the border were naturally sceptical. Realistically, that project will create enormous benefits for our economy and I hope that it will get the support that it needs. The cost of the project is about £500 million, which is a fraction of the £16 billion spent on Crossrail.

I would first like to comment on the south access that the Government have funded at Leeds station. I cannot say how important that is for some of the poorest parts of the city. Over the years, the south side of the city of Leeds has not enjoyed the benefits of economic regeneration, and the money that the Government have kindly given in support of that project will open up opportunities for significant regeneration in that area. I welcome that.

I shall now turn to my pet project. I am in danger of causing what I call a crossing-the-road scenario with my right hon. Friend the Minister. In my previous life, I was the head of fundraising at a number of hospices. When I walked down the road, people would cross over to avoid me because I was usually asking for something-whether it was money for the charity or sponsorship. Whenever I see my right hon. Friend the Minister, she gives me that "Oh God, not him" look.

Kirkstall forge is a large brownfield site just outside my constituency. It offers real potential for creating lots of new jobs and employment opportunities, with massive private investment-we are looking at about £350 million. In addition, we hope that there will be the opportunity for two new stations: one that will serve that site and help to relieve the congestion caused by massive development, in my constituency in recent years and in other areas, on very busy roads; and one at Apperley Bridge. That is in the development stage at the moment and I hope that all the work that has been done by the local authority-Leeds city council and the private investors-will be recognised and that the Government will look favourably on providing the funding for this important project, which will help to relieve some of the most congested roads in Yorkshire.

I would also like to talk a little bit about rolling stock. In 2007, the White Paper suggested that Northern Rail would need approximately 182 carriages. It has not received a single one of them, so I was delighted to hear the announcement that carriages will be made available. I would just like to make a plea. In the north, we seem to suffer in that regard and getting third hand-me-downs would be better than nothing. We have had absolutely nothing in the past, so we would be happy with that.

Looking at future Parliaments, I am in danger of probably upsetting my hon. Friend Andrea Leadsom, for whom I have an enormous amount of respect, because we are on opposite sides of the argument about HS2. My hon. Friend the Member for Blackpool North and Cleveleys made a valid point-we must take on board the concerns of hon. Members. I am glad that Ministers have taken the time to visit communities that are affected and will probably not see the benefits of HS2. For the north, however, it will a significant boost. I was delighted when it was announced that it would be a Y route. That is hugely important to Yorkshire. If the other suggestion had been chosen, it probably would not have been worth it, so I am delighted that the Government made that decision.

My hon. Friend made a point about it just being about breaking down the barrier of the north-south divide, and I take that on board as it is a valid point, but the decision shows a tremendous amount of confidence in the north of England. Leeds, for example, has been a big financial centre in recent years and having such a link would help to improve that. As we have heard, it will release capacity on the east coast main line. As somebody who uses that line every week, our long-suffering commuters will be glad to see that. It is also important to remember that it will release capacity at Heathrow. It is important that we try to maintain Heathrow as an international hub, and I hope that this will go some way to doing that.

My last plea and wish is for us to look-I recognise that it will take some time, given the financial situation-at links to Leeds-Bradford International airport. It is the only airport in the country where the only access is along single-track roads. It is an isolated airport, and there is an opportunity for us to look at providing a tram-train link from the Harrogate line up to the airport and then down on to the Guiseley line, which would then, for the first time, connect Bradford with Harrogate and offer options for passengers. It is worth noting that there is a collection of community groups in the area called WARD, which noted that when the volcanic ash problem happened, the roads servicing that airport were considerably quieter during that period. That demonstrated that the only way people can get to the airport is by car and we really need to look at a sustainable way of doing that.

I congratulate the Transport Committee on an excellent report. I just hope that the Minister will not cross the road next time I see her.

Photo of Gavin Shuker Gavin Shuker Labour, Luton South 4:04 pm, 17th February 2011

Thank you, Mr Owen, for chairing the debate on such an important issue. As a member of the Transport Committee, I would like to thank those who went before me and prepared the report. As someone who commutes by train on a daily basis, this is a matter that is close to my heart, as it will be for my constituents and for all of our constituents. Today, I would like to focus on investment plans for railway stations rather than track and carriages, in particular those known as category B stations, such as the one in my constituency of Luton South.

The Transport Committee's third report "Priorities for investment in the railways" helpfully outlines the current investment needs of our railways. The report sets the discussion in its historical context. Despite the successes of passenger numbers in many places, our railways are sadly still overcrowded, outdated and underinvested. The rapid increase in passenger growth, up by 73% since privatisation, has simply not been matched with sufficient investment, for whatever reason. At the outset here, I would like to challenge the retort that the deficit gives a licence to scrap all prior recommendations. The Committee's report was published in early 2010, when the challenge of the recession was real to us all. Cuts to investment were anticipated, so the Committee sought to make its recommendations on the basis of key priority needs. The recommendations in the report then, are not pipe dreams, but the basic steps needed to bring our railways in line with essential common standards.

The report states:

"Cuts in transport investment are easy to make, but are costly in the long term, undermining future growth prospects and depriving future generations of a lasting legacy of good transport services."

It concludes:

"Investment in improving transport infrastructure should be based on the long-term needs of the economy and society, not directed by the need for immediate public expenditure savings".

In fact, the report speaks very highly of the benefits of investing in our railways.

Sitting suspended for a Division in the House.

On resuming-

Photo of Albert Owen Albert Owen Labour, Ynys Môn 4:21 pm, 17th February 2011

Order. Before I call Gavin Shuker, I will just explain that I will call the Front Benchers at about 5.15 pm, as we have an extra 15 minutes from the Division. Four Members are trying to catch my eye, so if the next speakers can consider a time limit of 10 minutes, we will get in everyone who wants to participate in the debate.

Photo of Gavin Shuker Gavin Shuker Labour, Luton South

Thank you, Mr Owen.

As I was saying before we were so rudely interrupted by the business in the main Chamber, the Select Committee report concludes:

"Investment in improving transport infrastructure should be based on the long-term needs of the economy and society, not directed by the need for immediate public expenditure savings."

In fact, the report spoke highly of the benefits of investing in our railways, recognising that enhancements often

"provide good value-for-money"- what we put in regularly, we get back in increased usage. Targeted investment can have "important economic benefits" for community connection and regeneration, which means that not only the service provider, but our local businesses and communities cash in. The Government desperately need growth, and they must not ignore the potential for economic growth in the improvement of our railways.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

Like my hon. Friend, I travel from Luton station every day. Does he agree that railway stations are about not only transport facilities but the appearance and the impression given when people arrive in a town? The better a station looks, the more likely it is to encourage people to visit and businesses to stay, because it looks nice. That is a simple thing, but I am certain we need it, and I hope my hon. Friend agrees.

Photo of Gavin Shuker Gavin Shuker Labour, Luton South

I absolutely agree with my hon. Friend. Luton station welcomes us both home at the end of a long evening in Parliament, and I only wish that all passengers had the enjoyment of sitting opposite my hon. Friend Kelvin Hopkins on their return journeys, so that their conversations might be as enlightened as ours often are. He makes a strong point that stations are the gateway to broader communities. Investment in infrastructure, transport infrastructure and stations in particular bring a halo effect.

As we all know, rail is particularly important as a mode of transport for business. In my region, the east of England, eight out of 10 rail journeys are made for business purposes, all by people commuting to work. If we are to support people fully in their ability to get to work, investment in our railways is vital. Eddington argued that

"the rising cost of congestion will waste an extra £22 billion worth of time in England alone by 2025."

Our transport links, therefore, are a

"key enabler of productivity and competitiveness"- according to the Select Committee report-and, in short, we have no choice but to invest if we want growth and jobs. Let us not dismiss our future prosperity with a narrow argument made solely in the name of the deficit.

It is also worth noting that investment in construction is one of the silver bullets in Government action to get significant economic growth. The improvement of stations is identified in the report as one of the key improvement projects worthy of consideration in the next control period. Station upgrades are highlighted as beneficial in wider area regeneration. Stations are not simply sheds in which we shelter from the rain, as my hon. Friend the Member for Luton North has said. They are key functional zones and play an important role in the total journey experience and in enabling economic productivity in a wider region.

We all know that first impressions count. I am incredibly proud of the town of Luton-I am, indeed, from what I hope shortly to call the city of Luton. However, I confess that it is not with pride that I welcome visitors at Luton railway station. The station has been assessed as one of the worst stations in the whole of the United Kingdom, measured by equivalent passenger numbers. In the words of my hon. Friend the Member for Luton North, in his Adjournment debate last year:

"It is drab, dreary and depressing."-[Hansard, 23 March 2010; Vol. 508, c. 63WH.]

It does not do our area justice, and the population of Luton has been complaining about it for long enough.

Photo of Julie Hilling Julie Hilling Labour, Bolton West

In addition to those remarks, I had the experience of going to Luton many years ago, but I suspect that the station is exactly the same as it was then. Safety is also involved. As a woman, certainly, I felt incredibly unsafe in Luton station, because of the layout and everything else. That is such an important element.

Photo of Gavin Shuker Gavin Shuker Labour, Luton South

My hon. Friend has anticipated my next point. We ought to expect certain key standards from major stations. If stations do not live up to them, as in Luton, they require significant investment.

Do not take that judgment from me alone. Luton station is known as a category B railway station-it is the second busiest type of station, a national interchange seeing high levels of passenger traffic. All stations in the UK are categorised, from A, the busiest national hubs, right the way through down to F, which are unstaffed stations. Levels of passenger traffic increase up the categories. Sixty-six stations are classified as category B, accounting for 3% of the total number of stations in England and Wales.

That all seems logical. However, the criteria for category A and category B stations are broadly identical. Each station must witness more than 2 million trips a year and £20 million in annual revenue, meaning that a notoriously busy station such as Clapham Junction can fall into category B and be subject to far lower levels of investment than stations in category A. If we do have a classless society, it certainly is not currently witnessed on our tracks.

The 2009 independent report by Chris Green and Professor Sir Peter Hall, "Better Rail Stations", highlighted category B stations as the category of station most in need of immediate investment-dire need, one might say. The report concluded that

"the National 'B' Interchange stations are not adequately funded to meet the Minimum Standards and represent the biggest 'gap' in station consistency."

It later made a strong point:

"They tend to lie in the shadow of the high-earning 'A' stations and are under-invested for their daily role as major transport interchanges."

Stations such as Luton and Clapham Junction are not receiving the investment they merit for their important roles in our national network. The report highlighted 10 category B stations deemed in need of immediate upgrade work and recommended the creation of a sinking fund to help those stations meet basic minimum standards. The previous Labour Government accepted those proposals, and Network Rail committed £5 million to the project in Luton alone. The rest of that funding was in place, and the people of Luton celebrated that. Retailers began to plan for the better shops and conveniences they could offer, offering additional revenue back into the network from increased rental spaces. However, on 25 June last year, the Government announced that the better stations scheme would be scrapped. Frankly, the cancellation of the programme was an utter sham. Network Rail rolled over far too easily and quickly on a well-considered scheme that was welcomed by many hon. Members. As yet, we have no answers as to how the improvements will now be done.

The Minister will undoubtedly be proud of the settlement her Department secured, which we all agree was far better than expected. However, her Department made a mistake in putting pressure on Network Rail to cave in and damaging regeneration across those 10 key areas, where we could make a real practical difference to stations.

As we look at ways that investment in our railways can be part of wider economic regeneration, let us not overlook our stations. As the "Better Rail Stations" report rightly points out:

"Stations cannot be seen in isolation-they are part of the total journey experience...Stations are deeply entwined with their local community and effectively act as the gateway to both town and railway. They leave passengers with their lasting impressions of both-a dilapidated station is bad business for both town and railway."

Our category B stations have been left to rot away for far too long as energy has been focused on a handful of shiny new hubs. Those vital interchanges do not satisfy basic standards. The decision to scrap the upgrade scheme was hurried, short-sighted and counter-productive. As we reassess priorities for investment and review the findings of that finely worded report, let us not make the same mistake again.

Photo of Andrea Leadsom Andrea Leadsom Conservative, South Northamptonshire 4:30 pm, 17th February 2011

I join other hon. Members in congratulating the Chair of the Transport Committee, Mrs Ellman, on securing this debate about the priorities for rail investment. That is an important topic, as it involves the relative merits of what our money is spent on. Value for taxpayers' money is a subject dear to my heart.

Almost a year ago, I was the unsuspecting candidate for South Northamptonshire. Suddenly, I heard Lord Adonis's announcement about high-speed rail that was, quite literally, to change my life, and it hit me out of the blue that the line would go through the middle of South Northamptonshire. Within days, I held a public meeting that was attended by about 550 people. Of those, 400 were on two floors of a town hall in Brackley, and 150 were outside on the pavement trying to get in.

I do not want to focus on that today. Hon. Members from across the House have made accusations of nimbyism, noted that if we want to make an omelette a few eggs have to be cracked and made other helpful remarks. Therefore, I will not talk about the fact that I have had nigh on 1,000 pieces of correspondence. My right hon. Friend the Minister knows that only too well, as I am in regular correspondence with her and the Department for Transport.

There are real concerns. Some schools in my constituency may be unviable from now on because of the risk that high-speed rail will run so close to the school that in a few years' time-within the time frame for parents to decide where to send their children to school-that school will be forced to close. If that threat exists, why would any sensible parent send their child to such a school? There are families who need to move but do not quite meet the criteria for the exceptional hardship scheme. They do not know when they will be able to move, if ever. There is a risk that the famous English battle site at Edgcote will be severely damaged by the proposed route. There are many small battles to fight in South Northamptonshire to protect ourselves in terms of mitigation. Again, I will not talk about that now, because I have been accused of nimbyism too many times. Instead, I will focus on my 23 years in banking and finance, and hope that that will give me the credibility to point out the issues about value for money and the choices that we need to make about our priorities for rail infrastructure.

We expect the High Speed 2 line from London to Birmingham to cost around £17 billion. That is largely a guess, as such major infrastructure projects often have big overruns. I know the Department for Transport is concerned about the fact that civil engineering in this country costs such a great deal. As a frequent user of the line from Euston to Milton Keynes, I accept that the west coast main line is at capacity. I have taken trains home at 8 pm, and still found myself standing shoulder to shoulder. It is a matter not of having a seat, but of having anywhere to stand. However, is that need for capacity best met through a brand new, 250 mph train line, or can we achieve something similar by providing additional capacity on existing railway lines, and using the change-a significant amount of money-to fulfil some of the other interesting and compelling projects that hon. Members have mentioned today?

As I have heard many times, because of the capacity issue there has to be a new train line, and if we are to have a new train line, it may as well be high speed. That is my first challenge. High-speed rail has massive implications in terms of engineering costs and the impact on the environment and the communities through which it passes. Does the line have to be high speed? Will it even reach 250 mph? Certain international rail consultants have challenged whether such a line in Britain-a small country with complications caused by the lie of the land, the wrong sort of leaves, the wrong sort of snow and probably the wrong sort of trespassers on the line-will actually ever reach 250 mph on a regular basis. If it does not, what on earth is the point of spending the money to go in a straight line? That is my first major question.

Secondly, I have seen evidence that suggests that a similar amount of capacity could be freed-up on the west coast main line by providing 12-coach trains, making adjustments to certain stations and carrying out other alterations that would not incur the type of disruption that we saw in previous upgrades to that line. Is this an issue of capacity, or is it a case of, "HS2 is the answer, what is the question?"? I am unconvinced that we have said, "There is £17 billion to be spent, how best can we spend it?" I did not give the Minister prior notice of that question, but I would appreciate it if she would indicate whether she will be willing to talk to me separately about it.

I am not a transport expert by any means. My favourite film as a child was "The Railway Children", and my 15-year-old has told me excitedly about Maglev. That is the future, although not in our lifetime I have been told. Meanwhile, we are stuck with ancient 21st-century technology, and we have to look at what we can do now.

Hon. Members have spoken about the importance of the electrification of other lines. They have mentioned the northern hub and the east-west line. A number of colleagues who will not be affected at all by HS2 have said, "What about my line? My constituents want to get from the east coast to the west coast. What are we doing for them?"

Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport

I hope that my hon. Friend appreciates that over the next five years, the coalition Government will be embarking on one of the most extensive upgrades of our existing network in modern history. There is no evidence to suggest that high-speed rail is going to squeeze out other important rail upgrades. Both are important, and both will be delivered on.

Photo of Andrea Leadsom Andrea Leadsom Conservative, South Northamptonshire

I am pleased and reassured to hear that, but nevertheless, in this time of great financial constraint, there is no doubt that a £17 billion project will lead to other choices not being taken.

Kelvin Hopkins made an excellent contribution-he is clearly an expert on this matter. He spoke about a dedicated freight line. I do not wish to be a nimby, but if such a line went through my constituency, I can see the obvious merits of a dedicated freight line that I cannot see having looking carefully at HS2.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

The hon. Lady made a good point about high-speed trains having to go in a straight line. That gives them certain rigidities that do not apply to normal passenger routes up to 130 mph, or to freight trains that can manoeuvre and take tighter curves. That cannot be the case with high-speed trains. They have to go in straight lines because of the speeds involved.

Photo of Andrea Leadsom Andrea Leadsom Conservative, South Northamptonshire

I am grateful to the hon. Gentleman for that point. He is right-high-speed rail has to go in a straight line and it is much more expensive to create that, which greatly limits the number of stops. I have heard it said that the line needs to go from London to Birmingham for the purpose of speed and to solve the north-south divide. I agree with those hon. Members who have said that that alone will not solve the north-south divide and that other decisions will need to be taken. We need to consider the whole of Britain. From the point of view of many constituencies along the way between London and Birmingham, if the line were to be made viable with interim stops, so that there were some sharing of the benefit, it would be more attractive.

Photo of David Mowat David Mowat Conservative, Warrington South

No one would claim that high-speed rail on its own could solve the north-south divide. I do not think that anyone in the Chamber, including my right hon. Friend the Minister, would attempt to do that. However, will my hon. Friend admit that the creation of 40,000 jobs-that is KPMG's estimate-in the north-west, north-east and Yorkshire as a result of high-speed rail would contribute towards doing it? She said that other projects could be equally effective in helping to solve the north-south divide. Perhaps she will say which of those she would put her money on. Finally, three or four hon. Members have made the point that incremental improvements in rail are very effective in the short term. That is correct, but we cannot just make incremental improvements for ever-

Photo of Andrea Leadsom Andrea Leadsom Conservative, South Northamptonshire

I thank my hon. Friend for his intervention. However, I am not of the old USSR view that we should just do public project after public project for the sake of creating jobs. There needs to be a clear rationale for having the high-speed line in the first place. Any project needs to stand on its own merits and not be done just because it creates jobs, so I do not agree with my hon. Friend in that respect.

I have seen evidence-I hope that the Minister will comment on it-that the west coast main line, through incremental improvements that would not cause disruption, could come very close to providing the same increase in capacity as HS2. My central point is that that would be a much cheaper and less disruptive alternative means of achieving the same improvements in our rail infrastructure.

Photo of Julie Hilling Julie Hilling Labour, Bolton West 4:42 pm, 17th February 2011

It is a pleasure to see you in the Chair, Mr Owen. I congratulate my hon. Friend Mrs Ellman on securing a debate on this very important issue. I ought to declare an interest, in that my constituency party is supported by the Transport Salaried Staffs Association-one of the railway unions.

I want to cover a number of different areas, so I am afraid that my comments will jump around a little. I am concerned that if we talk simply about the economic benefits of investment in rail, that may well mean that the north is always disadvantaged. Because of the size of London's economy, the benefits of investment in London and the south may always appear to be greater, but that should not be the only judgment. In the north, we have suggested that High Speed 2 should start in the north-we want it up there. We should start it up there and worry about the bottom bit afterwards. We have been told that that is not feasible because the economic benefit will come only if it is in the London area. However, if rail is not only public transport but a public service, why should someone in London receive three times as much public money as my constituents in Bolton? We need to consider more than just the economic benefit.

That takes me on to overcrowding on the trains. Pacers still run from my station in Atherton. I do not know whether everyone knows what Pacers are. They are like buses on rail. I do not know how Northern Rail engineers keep them going. They are rather decrepit rolling stock. The issue has to be quality as well as capacity. We may have to accept having second-hand stock in the north, but we need to ensure that it is not second rate.

Frequently, my constituents cannot get on the train services from Bolton. The situation is similar when they come home at night. The overcrowding is such that if they do not start off at Manchester but try to get on at one of the intermediate stations, they cannot get on the trains. We need urgent action, and I hope that the Minister will tell us when some of that action will take place.

We also need to consider the capacity of the infrastructure. When Virgin started to run three trains from Manchester to London every hour, trains going through my constituency reduced in number, and a number of those went to Manchester Victoria instead of Piccadilly. Of course, Piccadilly is our hub station, where we get through trains either to London or to other destinations. Piccadilly is at capacity. There simply are no more trains that can run in and out of Piccadilly, so we urgently need the northern hub, which will free up routes and give us more trains to and through Manchester.

Similarly, the west coast main line is nearly at capacity. Trains cannot run 24 hours a day. There has to be time for maintenance and inspection. The assets are already sweating. Therefore it seems to me that we have no choice but an additional line. It could be a freight line, but why would we build for the last century rather than for this century and for the future? We need to use the best of our technology to ensure that we have a system that goes forward. That does not mean that I do not have sympathy-of course I do-for people who will be disadvantaged whatever line we build, but we need that additional capacity now. We cannot continue to put decisions off; we need to make the decision to go forward.

I agree with Paul Maynard that we need investment in rail across and within the north. When I started to work for the TSSA, I asked why the lines were called up and down lines. I was told, "Well, you go up to London and you go down to the provinces," so I asked, "What do you call it when you go east and west and you don't go anywhere near London?" I still do not have a good answer to that question. Sometimes we do have to cross that border-we do have to go into Yorkshire.

The current situation is ridiculous. We have two great cities in the north-Manchester and Leeds. They are so close to each other-only 40 miles apart-and are linked by a good service, but it has to travel so slowly because of the condition of the line. We desperately need investment in that route-investment in routes that do not just go to London. It is also incredibly difficult to travel within the region to other destinations-to get across the region. I am talking about people trying to go from York to Sheffield or other places. We need to consider how we can improve line speeds there and improve the service.

I welcome the commitment that the present Government have made to follow the previous Government's plans for electrification, particularly as I should get electrification in my constituency, which will be a great joy for us. However, we cannot stop at that electrification. We have to consider whether we can have east-west electrification. Can we electrify other parts of the system? I would be interested to hear what the Minister has to say about our future plans for electrification. The reality is that electrification increases capacity and speed, reduces wear and is better for the environment.

The debate is about celebrating the success of our railways. The problem that we have arises because too many people want to use our trains. I look forward to more investment. I congratulate the Minister on securing the investment that we do have now, but we need to look to the future and see how we can develop our infrastructure and rolling stock. I look forward to a better service for passengers.

Photo of Chris White Chris White Conservative, Warwick and Leamington

I add my congratulations to the Select Committee on Transport on its most excellent report. If I may say so, however, there is one area of the report that could have done with strengthening a bit-high-speed rail. I have already made my position clear: I do not support High Speed 2. As the report makes clear, the estimated cost of the London-west midlands line is about £11 billion, with the total cost rising to £69 billion for a full 1,500-mile network. High-speed rail is therefore a major part of the long-term investment in our railways, and I believe that it should be heavily scrutinised before we commit so much public money to it. I appreciate that the report mentions some of the arguments surrounding high-speed rail, but I believe that more time should have been given to it and it should have been studied in greater depth, given the potential cost to the country over the long term.

Given that in 2007 the Department for Transport broadly accepted the Eddington transport study, which concluded that high-speed-rail would be poor value for money in the UK, it is incumbent on Parliament to ask what has changed so much in the space of the last three years to reverse that conclusion.

Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport

Apart from anything else, there has been a change of Government. We are taking a forward-looking approach, so as to address the transport needs of our country over the next century. We have to make this upgrade to deal with the massive growth of future years. It is the best way to deliver it in a sustainable way.

Photo of Chris White Chris White Conservative, Warwick and Leamington

I thank my right hon. Friend for her comments.

If I may pursue my argument further, there are still some questions to be asked-such as whether the assumption of background growth in demand of 133% is truly realistic; such as whether potential competition from conventional rail has been taken into consideration when calculating the returns to be generated by this investment; such as whether new developments in technology, including video conferencing, online communication and information sharing, will seriously reduce the need for travel.

Large countries such as China are considering whether there are clear benefits to high-speed rail. A report by The Economist only two weeks ago entitled "On the wrong track" highlighted the fact that many of the newly added lines are making hefty losses and are thought to be operating at under half capacity. The Chinese Academy of Sciences has asked the Chinese Government to reconsider the case for investment in high-speed rail.

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

Does my hon. Friend agree that there is a crucial difference in that we have freedom of movement, but China does not, which slightly adjusts market demand?

Photo of Chris White Chris White Conservative, Warwick and Leamington

I agree with that specific point. However, if China, which has an economy twice the size of ours, is considering whether high-speed rail gives value for money-despite the point made by hon. Friend-we should think again.

As the Eddington transport study highlighted, it is not that Britain's transport system is not quick enough, but rather that it is extremely dense and we need greater investment in capacity.

Photo of Tom Harris Tom Harris Labour, Glasgow South

The hon. Gentleman advocates that we follow China's example on high-speed rail. I presume that he is aware that when the Chinese want to build a high-speed line they demolish houses that get in the way. Planning arrangements there are rather less democratic than ours. I would be wary about following that example.

Photo of Chris White Chris White Conservative, Warwick and Leamington

Those last two interventions show the similarities and differences in how our two countries operate.

The Committee says that we are reaching full capacity and that we need to put extra capacity in place, and I respect that. However, high-speed rail is not the only answer, and I believe that that should be investigated. The Department for Transport's report on alternatives to high-speed rail, rail package 2, was able to deliver the necessary capacity improvements at a superior rate of return, and it was costed at a mere £2 billion. We should be considering all these options rather than deciding on large-scale prestige projects. Further areas of concern could be highlighted, such as the potential economic disadvantage that may be caused to other areas of the country that do not have access to the high-speed network.

As I said, I am grateful that the Committee chose to consider the matter, and I believe that it will provide a platform for real debate on our rail investment priorities over the coming years. I hope that everyone will engage in it fully.

Photo of Julie Hilling Julie Hilling Labour, Bolton West

I thank the hon. Gentleman for giving way. I keep hearing that there are alternatives. I wonder what alternative there is for land-based travel from Scotland and the north of England to London if it is not high-speed rail.

Photo of Chris White Chris White Conservative, Warwick and Leamington

I had come to the end of my speech, but I shall answer the hon. Lady's question. We have heard much about north-south and east-west, but I have to admit that I am quite parochial about the matter. I am from the south midlands, and I believe that there are different options. We have good services now; what we need is greater capacity.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham 4:54 pm, 17th February 2011

It is a pleasure to serve under your chairmanship, Mr Owen. I too congratulate Mrs Ellman on her Committee's report and on securing this important debate.

It is good that there has been a reasonable degree of consensus, perhaps not entirely on high-speed rail but on the need for investment in the railways in general and the importance of that to the economy, the environment and the country. That is just as well because, given the time scales involved, it would be a disaster if those policies were to be chopped and changed between Administrations.

It is right to give due credit to the previous Secretary of State, Lord Adonis, who planned much of the investment that is now going forward. The present Secretary of State had his eye on the post of Chief Secretary to the Treasury, and may have been a little disappointed not to have secured that position, but every cloud has a silver lining and the Treasury's loss was certainly our gain-rather, it was the railway's gain, because he has secured one of the most outstanding settlements, and that is a credit to him and his ministerial team, and to the Government, whose overall commitment to maintaining capital spending in these difficult times means that we have secured most of the investment originally planned for the railways. That includes core funding for control period 4, for the Thameslink upgrade and Crossrail, and for High Speed 2.

It was a little uncharacteristically partisan of the hon. Lady to suggest that there was a deliberate policy to price people off the railways. That is so obviously nonsense and not part of the Government's strategy that it should not be repeated.

Photo of Gavin Shuker Gavin Shuker Labour, Luton South

I want to put on record the fact that I was pleased to receive from the Minister of State the information that, as a result of RPI plus 3%, growth in the railways will be diminished by 4%.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

Supply and demand on the railways clearly do not work in favour of the customer. If the Government had not taken a realistic approach to fares, as well as to public support for the railways, some of that critical investment in the railway's future would have been lost. That, too, would in the end have damaged the interests of customers.

It is obviously regrettable that any fares have to rise at all. We all want to see them fall. Indeed, that Liberal Democrat aspiration was included in our manifesto. However, we must recognise that the Labour party has left us with an annual overspend that would have swallowed the Department for Transport's budget many times over. We have to be realistic about the need to invest in that kind of environment.

The Select Committee made some important points about the security of that investment programme. Some of those programmes have been maintained. The Minister will know that I am going to mention one project that I think she maintains was not agreed but which I consistently maintain had been agreed, which is the redoubling of the Swindon to Kemble line. It was given enormous support by the Welsh Assembly, local councils, Labour MPs from south Wales and Swindon, Tory MPs from the counties between, and Liberal Democrats from Cheltenham, Bristol and Cardiff-and probably Chippenham.

The redoubling of that short stretch of line would have an enormous impact on the reliability of all the routes that serve those areas and constituencies. It would also be important to the resilience of the network in the west of England, particularly in the event of interruptions to cross-Severn services. Once again, I urge the Minister to look down the departmental sofa to see if any pennies can be found to secure that one project. It is a shame, but it is virtually the only railway project that was agreed under the previous Government that is not going forward.

The Select Committee report rightly talked about the value of rail enhancements, including many local projects, and stressed that they were as important as many of the larger projects. The importance of the right decision-making methodology was also mentioned. My hon. Friend Duncan Hames made some excellent points about the need for a long-term strategic view and for joined-up planning in that respect. However, environmental concerns now take an even greater part in that methodology.

Passenger experience, too, is important. When it comes to franchise reform, it is important that we do not use only the basic metrics, such as punctuality; we should also consider the quality of passenger experience on some of our railway services. I would nominate leg room as being one of the most important. Passenger experience should play a much greater part not only in the awarding of franchises but in their maintenance and, if necessary, their recall when services and standards fall. It is also important that regional balance is considered. Many Members have made similar points. Some of the specific medium to long-term priorities identified in the report were equally important, and the points were all well made. I am an unashamed supporter of high-speed rail as is the Liberal Democrat party. The time scales involved are quite mind boggling. We can reassure some hon. Members about the investment involved, because it is spread over a long period of time.

Photo of Andrea Leadsom Andrea Leadsom Conservative, South Northamptonshire

Is the hon. Gentleman an unashamed supporter of HS2, or is he an unashamed supporter of dramatically increasing the amount of capacity on the west coast main line?

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

Both actually. The importance of High Speed 2 is not simply related to the stretch to Birmingham. If we consider the ultimate plan, which is to link London and Scotland, and then Scotland and Europe, by high speed rail, with another link to Wales and the west, we can see that it will compete holistically with aviation-I have already mentioned that aviation traffic tends to drop by 80% on routes covered by high speed rail-and cars. As people shift from conventional rail to high-speed rail, which happens and is an environmental issue because high-speed rail is more energy intensive, the likelihood is that their places will be taken by people abandoning car journeys as traffic becomes more competitive.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

I am a little wary of the time, so I will plough on. I endorse the view that we need a balance in railway investment between not only Manchester but the whole of the north of England and London and the south-east. I echo the comments of my hon. Friend the Member for Chippenham about the need for a rebalance in favour of the west and Wales. When we enter the next control period, it is important that we bear in mind such balances.

Electrification, which was raised by the Select Committee, is an important issue, especially in the context of the Great Western main line. We need to be wary about presenting the commitment to electrify as far as Newbury and Oxford as any kind of cut. That project will continue until 2018, so to look beyond that is already well into the next Parliament. The Labour party committed itself to 20% cuts in its submissions to the comprehensive spending review across unprotected Departments, so if extra and faster investment in electrification were to happen, it would be interesting to see what cuts would be made to pay for it.

We must be wary of the perception that all the investment is working its way out from London. If I were to suggest that we face a rise in rail fares across the entire network, constituents living in Wales or Bristol would not see a great return on that rise. However, someone who is living in, say, Witney, would be closer to one of the stations that would be electrified-Didcot parkway or Oxford-and they might get a very real and rapid return on their increased rail fares. We have to be wary about the perception that all the benefits are being delivered first to London and the south-east.

Kelvin Hopkins made some important points about signalling technology. My hon. Friend the Member for Chippenham mentioned the European rail and traffic management system, and I raise an alarm about that. I urge the Minister to examine the experience of Londoners when the ERTMS was introduced on the tube system. She should perhaps take some advice on how well the system works.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

There is a difference between signalling assistance in general and specific signalling assistance about which there may be some doubts.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

That is absolutely correct. The Select Committee report also mentions the importance of investment in rolling stock. It is important for the Government to take their time to get that right. There have been delays under both Governments, so that is common ground. Rolling stock is a significant contributor to the general level of expense in our railways. If it takes time to consider how to deliver more competitive prices for rolling stock, it might be a delay worth considering.

Smart ticketing was raised in the report. It is important that we have better integration of ticketing. The current system is confusing and often unfair. Claire Cook, my fantastic PA in my constituency office, regularly books me a first-class ticket on a Gloucestershire to London train for £21.50. That horrifies many of my constituents who pay several times more for a standard ticket on the same train on the same route. They do not seem reassured when I tell them that because they have, in effect, paid for my ticket too, they are really saving money. That really does not seem to go down well. The risk is that there is an unnecessary perception of high cost, because people do not realise that cheaper fares are available. The ticketing system must be addressed. We should move towards a system that is a bit more like Oyster cards in London. When someone uses an Oyster card, they can be pretty sure that they are getting the cheapest fare available for that route. The application of such a system would be a good thing for the whole country. Obviously, though, that is a technical and organisational challenge.

Finally, everyone regrets increases in fares. Even when we accept that fares have to increase, there is a need to examine the sharp practices by train-operating companies, such as shifting the time boundary between peak and off-peak, so that there are suddenly more peak fares than before, even though, technically, the price has not been raised. That is a stealthy way of raising prices for customers. The use of averages was a point very well made. The Government must be on the ball about fare increases and make sure that train-operating companies are not taking advantage of customers.

In short, we should attack the fundamental causes of the high costs-the lack of capacity, the supply and demand problems and the cost base of the railways. The Office of Rail Regulation has said that Network Rail is up to 40% less efficient than its European counterparts, which means that we have some fundamental problems. With the inflated cost of rolling stock and so on, there is clearly potential for the Government to address the fundamental costs of our railways. If they do that effectively and protect investment, we will have a transport system that any Government could be proud to say is better value for money, better for the environment and better for the travelling public.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

Before I call Mr Gwynne, I remind Members that Mrs Ellman, as Chair of the Select Committee, will be making a few comments at the end.

Photo of Andrew Gwynne Andrew Gwynne Shadow Minister (Transport) 5:07 pm, 17th February 2011

I am pleased to contribute to this important debate. I congratulate the Transport Committee on its report and my hon. Friend Mrs Ellman on securing this debate. I am pleased to have had the opportunity to listen to the views and concerns of right hon. and hon. Members. It has been good, thoughtful and powerful debate from all parts of the Chamber. The Select Committee report posed a number of questions about the future of the rail industry that are relevant to our deliberations today. The report might be a year old, but it is very much a case of back to the future. Many of the challenges outlined in the report are still to be answered satisfactorily or properly addressed by the Government.

The report looked at a wide range issues facing the rail industry. There were perhaps too many to cover adequately in the time that we have left. A key issue is how we deal with severe overcrowding on services and how we realign rail investment more equally across the whole country. The report considered ways in which we could increase electrification on the network and examined rail investments that could be shared with all parts of the country.

As you are no doubt aware, Mr Owen, Labour is currently undertaking a policy review. As part of that, the transport team is looking at the ways in which we can deliver improvements in our railways. With nothing ruled in or out at this stage and with all ideas on the table for further discussion and examination, these ongoing discussions will form the basis of Labour party policy on transport for the next general election. A number of the ideas that have been raised today will be considered seriously.

Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport

Does the hon. Gentleman's party still support high-speed rail or not?

Photo of Andrew Gwynne Andrew Gwynne Shadow Minister (Transport)

The Minister pre-empts what I will come to later in my contribution, but we are in favour of faster trains and better connectivity, and high-speed rail will certainly form part of our policy review.

Returning to the Transport Committee's report, there are a few issues that it addressed that I would like to revisit briefly. As the report clearly identified, it is likely that there will be serious capacity issues all over the rail network in the years to come, and the Labour party remains committed to addressing both overcrowding and capacity issues on the network. However, where a Government makes future investment in the rail network is clearly important and tough decisions have to be made about the future priorities of the network.

As the report also clearly identified, investment decisions will have a huge impact on regional growth, and those decisions can help to perpetuate a vicious cycle of increasing disparity of wealth between regions. They will be all the more important in light of the abolition of the regional development agencies, which was referred to by both my hon. Friend the Member for Liverpool, Riverside and Paul Maynard. I myself represent a constituency in the north-west of England, so it is frustrating for me to see how rail congestion is having a real economic impact in areas such as Manchester and in the wider north-west, with knock-on effects on jobs and prosperity for my constituents and others.

The report rightly identified the northern hub as the key to improving rail services across the north of England. As we have already heard, it is an ambition of the northern hub project to increase train services in the north, including to cities such as Newcastle, Liverpool, Manchester, Leeds and Sheffield, by 40% during the next 20 years. That means 700 more trains a day, making it possible for 3.5 million more passengers to travel by train every year. The estimated wider economic impact of the project is also significant, with the creation of 23,000 new jobs and a return of £4 for every £1 that is spent. Of course, it has been frustrating for the northern hub project that there are no firm commitments about when work on that worthwhile and economically beneficial project will start. I want to take this opportunity to ask the Minister if she envisages that the project will be in the next Network Rail control period.

The report also examined the benefits of electrification, both for the environment and for improving the efficiency of our rail network. As we know, a number of regional schemes were announced by the previous Labour Government, and many of them were reconfirmed by the current Government through the comprehensive spending review. As yet, we are still awaiting a final decision on whether or not the Great Western main line electrification will extend all the way to Wales. People in Wales will feel pretty upset if that decision is delayed unduly, especially when the Conservative party manifesto itself said:

"We support...the electrification of the Great Western line to South Wales."

I am not sure whether there were any Welsh MPs in the room during the coalition negotiations, because that commitment was subsequently downgraded to a general statement of support for

"further electrification of the rail network."

It is crucial that the economic benefits of electrification extend to south Wales, and by that I mean that electrification should extend not only to Cardiff but Swansea.

Similarly, we wait with bated breath to see whether the newly electrified lines in the north-west, when they are eventually upgraded, will actually have electrified trains running on them from day one. Rightly there is a concern that, with delays to Thameslink, the carriage cascade to the north-west will be delayed. After all the internal investment to electrify the north-west part of the network, it would be a travesty if the old, overcrowded and slower diesel units continue to be used on the newly electrified lines.

I would warmly welcome any updates on these issues that the Minister can give us today. Can she let me know when there will be a decision about electrification to Wales? Likewise, can she confirm the time scales that are in place for the replacement of Thameslink rolling stock and for cascading trains to the Great Western main line and the north-west?

The Transport Committee report also identified the importance of having new rolling stock on the network. Clearly, the delaying and reprofiling of some major schemes that had been announced by Labour is disappointing, especially as train fares were hiked up last month, but new carriages remain some years away for some commuters.

It is a similar story regarding the delivery of replacement stock for the outdated inter-city fleet. Clearly, the Government have delayed their decision on the inter-city express programme, with all the knock-on effects for cascading rolling stock. It is time that the Government ended the delays and allowed that project to proceed.

Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport

I will not take any lectures from the hon. Gentleman-a Labour MP-about the IEP, given that his Government made little progress on it and spent £26 million on merely trying to procure the new trains.

Photo of Andrew Gwynne Andrew Gwynne Shadow Minister (Transport)

I would welcome an update from the Minister about where that infrastructure project has got to and when we can expect to see new inter-city trains.

After rail fares increased last month by RPI plus 1%, as we have already heard, it is disappointing for commuters that the Secretary of State keeps claiming that fare increases across the CSR period will be only 10%. Is not the truth that RPI plus 3% will deliver a cumulative increase of more than 30% on the inflation forecasts by the Office for Budget Responsibility?

The Minister's Department confirmed to me-it seems that it has also confirmed this to my hon. Friend Gavin Shuker in an answer to a written question-that it expects the effect of those rises to be rail passengers opting for other forms of transport. There is a concern, which the Minister used to share, that higher fares will price people off trains. That concern exists despite what Martin Horwood has said. In turn, pricing people off trains will reduce people's access to work and force them back on to the roads, generating more congestion, increasing carbon emissions and setting back our goal of achieving a sustainable transport system.

Briefly, I want to talk about high-speed rail, which was also mentioned in the Transport Committee's report. As I have said in response to an intervention by the Minister, the Labour transport review will look at all areas of policy in detail, including high-speed rail. Clearly it is right that we should look in detail at the best way of delivering faster journey times between our core cities while increasing capacity.

The connectivity gains of high-speed rail arise not only from faster trains but from the new route alignments that comprise the proposed "Y"-shaped network of lines from London to Birmingham and-eventually-north to Manchester, Leeds and beyond. However, I have a real concern about the Government's commitment to taking the planned high-speed line to the north. They have decided not to use the forthcoming high-speed legislation to secure the legal powers that would be needed to take the line beyond Birmingham, as Labour had planned to do. We will support the Government in taking the line beyond Birmingham, if that is what they choose to do. Perhaps the Minister can provide us with assurances that the Government will look again at seeking powers to extend the route beyond Birmingham.

It is also worth briefly mentioning freight on the rail network, which was an issue referred to both in the Transport Committee's report and by my hon. Friend Kelvin Hopkins. Freight operations play a big part in the economy, and we should look at ways of ensuring that freight capacity can continue to play a role in the rail network. Will the Minister outline how she sees rail freight being prioritised, especially with an eye on possible structural changes to Network Rail in the coming years? Indeed, is rail freight still a Government priority?

That brings me on to the McNulty review on value for money, which will have a real bearing on the future functioning of the rail network. I welcome that review of the rail industry, which was started by Labour when we were in government. When Sir Roy McNulty publishes his final report in April, we will consider any sensible proposals that would take costs out of the industry without reducing the quality of services for passengers. Does the Minister agree that, as the cost to the Government of running the railways comes down, the cost to the public of travelling by train should come down as well? Such a reduction would go some way towards helping hard-pressed commuters up and down the country, who are facing record fare rises of more than 30% in the next few years. The initial findings of the McNulty review have suggested that savings of £1 billion can be found without cutting services. Will the Minister now commit to sharing the benefits of those savings with passengers and to rethinking some of the fare rises that are due in future years?

In conclusion, as the Transport Committee report shows, the Government need a long-term vision for rail, and we need to deliver projects to build on our ambition to have a world-class rail service in this country. Where we agree with the Government, we will support them. The previous Labour Government left the rail network in a far better condition than the one in which we found it. Rail passenger numbers increased by 40% during the last decade, punctuality and quality of service also improved steadily in that time and consumer satisfaction with services increased. However, I recognise that there is still a huge amount to do, and this Transport Committee report is a good starting point for that future work.

Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport 5:19 pm, 17th February 2011

It is a pleasure to serve under your chairmanship, Mr Owen, and I, like everyone else, congratulate the Chairman of the Select Committee, Mrs Ellman, on securing this debate on such an important issue.

It has been a good debate, and we have at times been in danger of breaking out into a bit of cross-party consensus, which is extremely unusual on rail. It has been enlivened by references to Trotskyism and Leninism-the first time I have seen such elements enter into a debate on the railways. Everyone has recognised the crucial importance of our transport networks in general, and our rail network in particular, to our future economic prosperity, and to our ambition both to address environmental concerns, including those about climate change, and to deal with congestion on our roads by providing a viable alternative to the lorry and the car.

The coalition has pledged to cut the deficit and also recognises that securing growth is vital, which is why in the comprehensive spending review the Chancellor placed a priority on transport spending. As many Members, particularly Gavin Shuker, have acknowledged, transport projects can generate wider economic benefits many times their cost. I very much welcome the generous acknowledgement by my predecessor as rail Minister, Mr Harris, that the anxiety about a Conservative Government slashing spending on the railways has not materialised. Rail emerged from the spending review in a far stronger position than most people had expected, and that was acknowledged also by my hon. Friend Paul Maynard.

We have had to take a difficult decision on fares and I, of course, wish that that could have been avoided, but without the three years of RPI plus 3 increases, we simply would not be able to deliver the vital capacity improvements that passengers need. To make the sums add up, we had no choice but to ask passengers to pay more, but we are absolutely confident that passenger numbers will continue to grow. I was surprised that the Select Committee Chairman asked whether we were committed to new capacity and whether we expected growth to continue, because we are embarking on one of the most ambitious extra-capacity programmes in the history of the railways. That demonstrates our confidence that passenger numbers will grow, and our commitment to relieving overcrowding, which, as she rightly highlights, is a major concern.

Photo of Louise Ellman Louise Ellman Chair, Transport Committee, Chair, Transport Committee

Do the right hon. Lady's statements mean that she gives a categorical commitment to delivering the rolling stock as promised, and will she include in the conditions of future franchises a requirement to look at the health and safety implications of overcrowding?

Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport

I will, in a moment, outline the Government's commitments on extra rolling stock. Health and safety is a matter for the Office of Rail Regulation, which takes on board all such factors in its decisions on safety in the rail industry. There has been a significant improvement in safety on our railways over recent years, and we need to pay tribute to the fact that they are one of the safest forms of transport.

In response to the hon. Member for Glasgow South, we do not at the moment have any plans to reintroduce the flat cap. Affordability is the concern, but we will keep the matter under review, and see if it becomes more affordable in the future.

The improvements that we have promised are extensive, and over the next four years the Government propose to invest £30 billion in transport, £14 billion of which will support capital maintenance and investment in our railways. Major projects that we are funding include high-speed rail, Crossrail, Thameslink, Birmingham New Street and the tube upgrades. In answer to the question that the hon. Lady asked about carriages, we expect there to be about 2,100 new carriages on the rail network by 2019, of which about 1,850 will be additional capacity, and I shall go into a little more detail on carriages in a minute.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

Will the right hon. Lady look into the fact that more than 100 mark 3 carriages could be available immediately? We would only need to have new bogies to cope with the gauge difference with Ireland. The Irish need the money, I think.

Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport

It is open to the train operators to lease additional capacity if they so wish, and they may well be interested in exploring the option that the hon. Gentleman outlines.

Substantial work is under way on the strategic freight network, and I have repeatedly paid tribute to the work done on that by the previous Administration. I emphasise that rail freight plays a really significant part in our strategy for reducing carbon emissions and relieving congestion, and that is why the coalition has prioritised investment in projects such as the Felixstowe-Nuneaton gauge clearance.

The hon. Gentleman would like to see a dedicated freight line. I know his enthusiasm for that project and am always happy to engage with him on it, but the freight industry as a whole prioritises the projects in the strategic freight network, rather than a dedicated line. If the hon. Gentleman can make the case for going ahead with something like that in the future, I and my colleagues will of course be prepared to listen.

On the regional balance, in making project funding decisions it is important to take account of the needs of different areas. Although the business case for rail investment in the south-east can often be stronger because of the sheer volumes of passengers, assessment of the business case is just one element in the decision-making process and we can, and do, have regard to other factors, including the appropriate balance of funding between different parts of the country. It is worth recognising that improvements in London and the south-east can yield benefits for the economy as a whole, but the north of England will benefit directly from a whole range of programmes that are under way, including faster journey times between Liverpool, Manchester and Leeds, additional carriages, electrification, station improvements and important upgrades on the east coast main line, as well as the extension of light rail in Manchester and Newcastle, and in the longer term the north will benefit massively from our high-speed rail plans. The tough decisions made in the spending review mean that we are able to provide more than £1.5 billion for local authority major schemes in the period up to 2014-15, and that is a larger amount than the average annual Department for Transport spend on such schemes over the past 10 years.

High-speed rail has been a big issue in the debate this afternoon, as ever. My hon. Friend Andrea Leadsom spoke with her usual passion and articulacy on her concerns about high-speed rail, and I welcome the input of all colleagues on this issue as it is one of the most important parts of the coalition's programme to improve our railways. Very soon we will start a major consultation on our strategy for a Y-shaped High Speed 2 network, and I can assure the shadow rail Minister, Andrew Gwynne, that we are committed to taking this railway to the north of England, in two delivery phases. Opponents of HS2 say that it will not have a big impact on the north-south divide, the important response to which is that they should look at the extensive support for the project in the north of England, and also at the rest of Europe, where cities such as Lille have been transformed as a result of the connectivity that can come with a high-speed link to a capital city.

Demand for travel between our cities is expected to increase significantly, and there is an industry consensus that the west coast route will be full to capacity within little more than a decade. The hon. Member for Blackpool North and Cleveleys indicated that there was some contention about passenger growth figures, but everyone accepts that there will be significant growth on the west coast main line.

Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport

I am afraid that I really cannot. I do apologise.

We will face severe congestion and overcrowding on those routes in years to come, unless we act now to begin the process of delivering that capacity.

On the alternatives, upgrades of an existing line, even extensive ones, could deliver only half a new line's capacity benefit and would be more expensive. My hon. Friend asked whether 12-car trains would deliver the equivalent capacity: no, they absolutely would not. The hon. Member for Luton North asked whether new signalling would deliver it, and the answer is the same. We are already introducing new capacity on existing lines, and there comes a point at which incremental changes do not deliver the upgrade needed. Moreover, High Speed 2 will deliver the benefits of capacity released on the existing network, with major benefits for places such as Milton Keynes, Luton, Northampton and Peterborough, and also for freight operators.

I sincerely believe that careful mitigation can address many of the most serious local impacts, and I know that my hon. Friend will continue to fight hard for her constituents, who might be affected by the line. We welcome their involvement in the consultation process on which we are about to embark, to ensure that we get the right answers on high-speed rail and that we listen to the views of people affected by it.

After 20 years of discussion, Crossrail is finally going ahead. I hope that that answers those concerned that High Speed 2 will swallow up all the funding available for rail. The hon. Gentleman complained that the Hitchin flyover might not go ahead as a result of the funding pressure on high-speed rail. It is under way, or will be shortly, as it is in an investment programme to which the Government have committed. We have confirmed that the Thameslink programme will proceed in full, despite anxiety that it might not. Some 1,200 new carriages will be delivered, almost doubling the number of north-south trains through the capital at peak times.

On the Derby factory and the procurement of the Thameslink trains, the hon. Member for Glasgow South tempted me to depart from the EU's procurement rules. I fear that I would find myself falling foul of the European Communities Act 1972 if I did, so I will not advocate failing to abide by our treaty obligations, but I can assure the House that bids from UK-based operators will be considered carefully and assessed fairly, objectively and equally.

The Government expect an additional 650 carriages in several of our major cities by 2014. We expect services to be strengthened into Leeds, Manchester, Sheffield, Liverpool, Newcastle, Birmingham, Bristol-to answer the concerns of Duncan Hames-London Paddington and London Waterloo. In addition, new Thameslink and Crossrail rolling stock will enable the redeployment of hundreds more existing electric carriages, strengthening the case for further electrification of our network. I hope that that responds to the concerns expressed about the quality of rolling stock in the north. Julie Hilling rightly raised concerns about the quality of that rolling stock and the notorious Pacer trains. We believe that our programme of new rolling stock will help address those concerns.

As the Chancellor confirmed in his Budget speech, lines between Liverpool, Manchester, Preston and Blackpool will be electrified. The redeployment of electric rolling stock to those routes will in turn free up hundreds of diesel units, which will be available for train operators to lease after 2015. In November, the Secretary of State announced that Network Rail will electrify routes on the Great Western main line from London to Didcot, Oxford and Newbury. We expect to make an announcement shortly on the further electrification of that line. We have decided to press ahead with plans to buy a new fleet of trains to replace most of the high-speed trains operating on the Great Western and east coast lines. We have narrowed down the options to two, and we hope to give the House more information in the near future.

The hon. Member for Luton South and others were concerned about stations. We are continuing with the £150 million national stations improvement programme and the £370 million access for all programme, including £2.3 million to be spent on a scheme at Luton.

Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport

I am afraid that I cannot. I have run out of time. Birmingham New Street will go ahead, hopefully delivering economic benefits of £2 billion. Improvements at Reading will address a long-standing bottleneck, benefiting people across the Great Western line.

The Chairman of the Select Committee and others are absolutely right to say that it is crucial to get better value for taxpayers' and passengers' funding of the railways. Reforming our railways and reducing their cost is essential. The Chairman of the Select Committee and Martin Horwood rightly expressed concerns about the high cost of Network Rail compared with other operators in Europe. We recognise fully the concerns about rail fares. To answer the shadow Minister's question, we believe that we should share the benefits of the reduction in railway running costs that we expect the McNulty review to deliver. They will be shared between fare payers and taxpayers. We are also clear that any changes suggested by the McNulty review must protect freight operators' interests.

There is an important role for open access, as my hon. Friend the Member for Blackpool North and Cleveleys urged me to make clear, although open access is not necessarily his only hope of direct train services between Blackpool and London. No decisions have been made yet, but it is possible that that might form part of franchised operations.

We are working closely on the northern hub. I recognise that there is a lot of support for it. Dealing with the problems identified in the project would be of great benefit to the economy of the north of England. I cannot give any guarantees today, but it must be a strong candidate for funding in the next control period.

Hon. Members have supported a list of projects. On the Swindon-Kemble line, if there were any spare funding down the DFT's sofa, as the hon. Member for Cheltenham asked, I am sure that Swindon-Kemble would be a good candidate. However, he will appreciate that our rail budgets are fully committed. He made a good point about the improvements to resilience that the project would deliver. The hon. Member for Liverpool, Riverside mentioned the midland main line. There is a strong business case for it, but again, affordability is a concern. I am always happy to talk about Kirkstall Forge, and I look forward to the revised bid, which I believe will be made in September. It is a good scheme with significant benefits, and I hope that one day it will proceed. We will have to see whether it proves affordable, given our budget constraints.

I am grateful for the time allowed me to speak in this debate.

Photo of Louise Ellman Louise Ellman Chair, Transport Committee, Chair, Transport Committee 5:36 pm, 17th February 2011

Thank you for chairing this important and interesting debate, Mr Owen. I thank the Minister for her response. I am pleased to see my hon. Friend Andrew Gwynne acting so effectively in his new position. We have had a constructive debate, and I thank all hon. Members who have participated, including Select Committee members and others who find the issue important enough to have spent time and spoken here. The range of contributions underlines the importance of investment in our railways. Contributions have addressed the importance of investment in local stations, of local services and of developing capacity, whether in local, regional or high-speed rail services. I listened carefully to the Minister's response. She has given some assurances. The Select Committee will be following up the promises and commitments that she made, and will take up the various points raised by hon. Members.

The report that we have been debating was concluded a year ago, but it is significant how highly relevant many of its recommendations and the issues that it raised are today. The Select Committee's work is enhanced by the involvement of many Members. I assure all hon. Members here that we will be pursuing all the points that they have raised in our questions to Ministers and others responsible for delivering our services, and in new inquiries. I thank everybody for their constructive participation.

Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

I apologise for coming so late. We were engaged in debate in the main Chamber. When the McNulty report is published, I urge the Select Committee to consider it in detail and give us the opportunity for a further debate based on the Committee's consideration of the recommendations.

Photo of Louise Ellman Louise Ellman Chair, Transport Committee, Chair, Transport Committee

I thank my hon. Friend for his comments. The Select Committee takes rail investment extremely seriously and will give the McNulty report full consideration in due course, along with the Government's White Paper on the future of rail. Value for money in our rail service is intrinsically linked to the structure of rail and is the best way to deliver an effective service in terms of passengers and freight.

Question put and agreed to.

Sitting adjourned.