Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence


Examination of witnesses (Questions 1 - 19)

WEDNESDAY 9 DECEMBER 1998

COUNCILLOR S STACEY and MR K MEDLOCK

Chairman

  1.  May I welcome you most warmly to Transport Committee and ask you firstly to identify yourselves in whatever order you feel is fitting and make any general remarks you would like to open the session.
  (Councillor Stacey)  Thank you very much for that and thank you very much for the opportunity to come to talk to you. I am Councillor Stewart Stacey, I am a councillor in Birmingham, hold various posts in the West Midlands in the planning and transport field. I am Deputy Chair of the Local Government Association's Planning Committee and Chair of the National Planning Forum. I will introduce my colleagues. Ken Medlock OBE in fact needs no introduction to some of you. Ken is from the Liverpool Chamber of Commerce. He chaired the North West Channel Tunnel Group for some ten years now and was a leading private sector member of the North West Partnership. Andrew Lee, is consultant to the Fast Tracks to Europe Alliance and Steve Hoier from the London Borough of Newham where he works on the Stratford station project is the co-ordinator.

  2.  That is very helpful. Do you want to make some opening remarks?
  (Councillor Stacey)  Thank you very much. As someone once said, a week is a long time in politics and since our submission we have had the parliamentary question and answer yesterday. I should like to say we very much welcome the Government's decision to hold an independent review of the Consortium report and its possible alternatives. We do say that this must be to a finite timescale. We understand that the West Coast Main Line is ready to roll and the East Coast Main Line will be early in the next year. We do not want the services held up any longer than necessary.

Mr Olner:  Do we have any guarantees that the West Coast Main Line will roll?

Chairman

  3.  We are worried about where you thought it was going to roll to.
  (Councillor Stacey)  As I understand it, it is now technically capable of taking the train.

  4.  That is probably a better way of putting it.
  (Councillor Stacey)  We would say that we have had the briefest of chances today to look at the Consortium's report and we do think it shows the problem of the Consortium's way of looking at the issue of services: what we understand are the incentives in their management contract which are based on turnover and cashflow improvement rather than actually the running of railway services. We believe that this is fundamentally flawed for two reasons. The first is that it leads to a narrow customer base by both demographics and geography and leads to it only being used by a small slice of the broader population. In other words it becomes a train for the few not for the many. We also believe it unpicks the done-deal of the section 40 of the Channel Tunnel Act 1986. The capital and regional sets have already been paid for by the taxpayers of the whole country and we see both types of services, inter-capital and regional, as an integrated package and not the regional services as a bolt-on extra. Indeed the Government's White Paper on integrated transport says that the cherrypicking of profitable routes could threaten networks. This sort of behaviour has no place in our transport policy. We understand from the Consortium's report that they see the north of London services losing around £12.1 million a year, although if you include stops at Watford and Olympia according to them that loss is down to £4.9 million a year. In that report they admit that the inter-capital service is already losing £150 million. I have not heard that they are proposing to stop running those trains, yet they seem to be unwilling to start running the regional trains.

  5.  Some of us who use the services may think they have already stopped running the trains, but that is probably just malice on my part.
  (Councillor Stacey)  There have been other changes as well. It is not just in one week. Since the Act in 1986 we have seen an expansion of the European high-speed rail network and it is now becoming Europe essential for cities and regions to have an address on that network. We have seen in this country the breakup of the corporate railway, which makes it more difficult to integrate new services into the British network and we have also seen the Government's regional agenda with the setting up of RDAs and so on. Regions are going to be disadvantaged in economic development terms if they are not seen as important enough to have an address on the network. Indeed the Transport White Paper links the RDAs to strategic planning issues. Finally I should like to say that we were somewhat astounded to see the name that the Consortium has now taken for itself of Inter-Capital and Regional Rail Limited since they appear from their report not to want to run any regional rail services. I do not quite understand how they can do this. Perhaps your Clerk could advise you on whether the provisions of the Trade Descriptions Act are appropriate.

  6.  That is an interesting thought. Let me ask you something very simple. Do you really feel that you want this service because it will provide very real social and economic benefits or is it just that you are worried about having what you call an address on the circuit?
  (Councillor Stacey)  There are two issues. The address issue itself is important in the economic benefits issue because of the need to market the regions and the RDAs when they come on stream shortly will be all about that. The offer of a region to attract inward investment will be affected by this issue of whether you are on the network.

  7.  You are not seriously saying that only if you could offer one service like this would people be interested in putting economic development into particular regions, are you?
  (Councillor Stacey)  I am saying that it may be a test of whether footloose capital actually sees the commitment to particular regions by the national government if it does not think that region is important enough to have connections to the European high-speed rail network.

  8.  It is not just a publicity thing. You think it is really important to have this high-speed link.
  (Councillor Stacey)  I do indeed. Picking up on the other part of your question, yes, the service in itself will provide very real benefits, real benefits both to the populations served by it in the journey opportunities it will give to them, but also in terms of bringing people into the regions in terms of direct economic but also development of leisure tourism and getting people from abroad to be able to access tourist destinations in regions other than London.

  9.  If it is that important why are your members not prepared to subsidise the service?
  (Councillor Stacey)  We already are subidising. The taxpayers of the country as a whole have paid, as have taxpayers of London and the south east, for the train sets. People in London in particular are having theirs run. We are not having ours run. Those issues were dealt with back in 1986 as far as we are concerned when the MPs from right across the country voted for the Channel Tunnel Act, despite some misgivings that it was only going to be of benefit to London and the south east economically. The deal was done then. There were promises after pressure, there were amendments to section 40 of the Act to make sure that there were to be benefits to the regions and as we saw it that was done. We do not see why we should have to pay twice.

Mr Stevenson

  10.  May I return to the report which has been done by what we now call the Consortium? A week is a long time in politics but in your initial submission your comments in section 3 on the decision to allow the Consortium to undertake the feasibility study were somewhat sceptical. You "doubted their ability to be objective as there is no synergy between their business plans and the rationale for developing international services to the regions". You have expanded on that and clearly you were questioning the ability of this organisation which has a vested interest to be objective. Is that a fair summary?
  (Councillor Stacey)  Events have borne out that cynicism, yes.

  11.  It is a fair summary.
  (Councillor Stacey)  I think so.

  12.  Having established that, may I go on to ask a further question? You referred to the written question and the written response yesterday which is welcome but whilst welcoming that you did not comment on a point which is made in the Consortium's report which says this analysis, that is the report, was undertaken by independent consultants. Does that not throw some doubt on your cynicism about the capability of this organisation to carry out this exercise objectively?
  (Councillor Stacey)  Whether your paid staff are directly in your employ or consultants it depends on the parameters you set them, the parameters within which Inter-Capital and Regional Rail Limited seem to be working in the terms of their management contract with London and Continental Railways and their business objectives. I am not arguing that the report is incompetent. What I am saying is that given the parameters which were set it was bound to come to that conclusion.

  13.  Would you accept that there may be other factors which may have contributed to the conclusions they came to other than the contract criteria and the business ethos of the Consortium, namely that one part of the Consortium is British Airways? They may just have a passing interest in Eurostar services operating from Heathrow other than from the regions. Is that a factor which you think might have influenced thinking?
  (Councillor Stacey)  It is one which we have not allowed to cloud our considerations.

  14.  You should look me right in the eye when you answer.
  (Councillor Stacey)  I was looking at the Chair; I am sorry. It is one which we have not allowed to cloud our considerations. Such comments have been made. What we have tried to do is stick to the facts which are available and known to us.

  15.  You welcome the fact the Secretary of State has said he views the report as disappointing ... commission a thorough independent review of it and so on ... and the alternative proposals put forward by Virgin Group. What elements do you think the Secretary of State should lay down, apart from the timescale, as criteria for that independent review?
  (Councillor Stacey)  Goodness me. If I were writing the brief for the Secretary of State. I should like to say that you start from the point of view of the assumption that these services are going to run because that was what was promised the people in the regions back in 1986. How is it going to be done? One of the disappointments we had was that in the deal on ensuring that the Channel Tunnel high speed rail link was going to be built there was an assumption in that that the capital services were going to run and indeed they are. It did not seem as though the assumption were made that the regional services were going to run. We find that particularly disappointing and perhaps it is a question you can ask the DTR next week: why not? We think that could have been the time to make sure that what had to be run included regional services. As far as we are concerned, the fresh inquiry should start from the position that they are going to run and then ask how it is going to happen.

Mr Donohoe

  16.  Given the fact that the proposed service to link Glasgow direct would mean a journey of some nine hours 23 minutes what prospects are there ever to be in a position to make that economically viable with the alternatives there are in terms of just over two hours in a plane?
  (Councillor Stacey)  The questions of economic viability from individual stations does not come into it. We are going back to the first principle again that this was all part of a larger deal and that it was not a matter of it being economically viable to run a train from Glasgow to Paris and probably never would be.

Chairman

  17.  Forgive me but someone at some point is going to point out to you that there are budget airlines, there is an agreed formula in transport which says that things which are most efficient are those within a certain distance or those beyond a certain distance. We have agreed with you: fine, you have the point of principle on your side. I think you are being asked something different.
  (Councillor Stacey)  A train from Glasgow to Paris which just runs from Glasgow to Paris is never going to make money while you can fill an aeroplane relatively cheaply, a budget airline to fly people there.

Mr Donohoe

  18.  So why have it with all the investment you are talking of?
  (Councillor Stacey)  The investment is already there. The trains are already built the rail line is already electrified. As you get further south the same train as it runs further south will pick up from other places, other stations, people will feed into other stations and it will as a whole become something which we actually think will be economically viable in itself.

  19.  When will the first train run from Glasgow to Paris?
  (Councillor Stacey)  That is a very good question. We do not know. We understand it would be technically feasible to do it early next calendar year.


 
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