Examination of witnesses (Questions 220
- 239)
WEDNESDAY 17 MAY 2000
LORD MACDONALD
OF TRADESTON,
MR WILLY
RICKETT, MR
DAVID ROWLANDS,
MR RICHARD
BIRD and MR
PETER MCCARTHY
Mr Stevenson
220. Parliament has not published figures for
the ten year plan yet, we anticipate that will happen this summer.
One of the figures we have been presented with, which is in the
document, and the Deputy Prime Minister has indicated in the document,
is that the cost of improvements of the ten year plan, transport
included, will be in excess of £80 billion. I realise that
is an assessment at the moment, it has to be, but within that
£80 billion does it contain the announced assessment of the
costs of investment for Railtrack, for example, who have said
that over a similar period they look to be spending £52 billion?
(Lord Macdonald of Tradeston) You touch on a very
important question, Mr Stevenson, in that a lot of the comparisons
made are simply on public expenditure but increasingly as we go
forward in the ten-year plan we want to ensure that the private
sector is investing alongside the public sector in as large a
quantity as we can encourage. The £70 to £80 billion,
which was the range used by the Deputy Prime Minister in December,
was an extension of the trend of recent years. Certainly we are
looking in our Task Force for a more ambitious figure but a figure
which will include private as well as public and therefore it
will include what we can sensibly factor in by way of private
investment in the railways. You may recall that Railtrack made
it clear that the £51 billion that they listed was indeed
a wish list and was a pick and mix both for them, for government
and for the train operating companies to decide where the priorities
would lie inside that £51 million.
Chairman: More a try-on than a wish list.
Mr Stevenson
221. Wish list or no, they did publish that
assessment and in fact I think they held seminars to discuss it
at Railtrack and the £52 billion, as with the £80 billion,
is really the only figure we have to go on. I think you have said
in answer to my question, if you might help me by clarifying this,
that the answer to my question is, yes, the global figure, whatever
it comes out as, will include private as well as public investment
into railways and over every mode of public transport. That leads
to my other question then. If it turns out to be £50 or £52
billion, I understand that Railtrack are making a pretty fundamental
distinction between what they term commercial investment and non-commercial
investment. That leads me to my question, which is two-fold really.
Are you aware of the distinction that Railtrack makes, which is
a pretty fundamental one, and b), if you are, what assessment
have you been able to make as to where that dividing line is?
Thirdly, if you have made that assessment what effect will that
have on the public side of this total investment equation?
(Lord Macdonald of Tradeston) Just to repeat, if I
may Mr Stevenson, Railtrack described that £51 billion as
a wish list and almost every conceivable major railway project
over the next decade is listed in their network management statement.
However, as they pointed out at the time, the number of projects,
and the investment in them would be predicated on the refranchising
process (which is in itself driven by the SRA) in an attempt to
get increased investment in the railways from the train operating
companies as well as Railtrack and indeed the ambitions are it
to extend it further into private financial investment too. Perhaps
at this point, with your permission Madam Chairman, I can bring
in Mr Rowlands.
Chairman
222. We know Mr Rowlands. Come forward, Mr Rowlands!
(Mr Rowlands) Yes, we are well aware of the distinction.
If you look at one of the major projects that is running at the
moment and which the Committee has asked about before which is
the Channel Tunnel Rail Link, that is a project that is going
to cost £5.8 billion. It will receive a £2.5 billion
government grant and that reflects the non-financial social benefits
such as road decongestion. We are buying non-financial benefits.
As Lord Macdonald says, some of these are non-financially viable
projects and we recognise the distinction. We and the SRA will
be looking to see whether they too can bring non-financial benefits.
Mr Stevenson
223. That is fine, that is extremely helpful
and that does confirm the information I have but of course where
that dividing line may finally be and you are going to publish
your plans this summer presumably in the next month or two—
(Lord Macdonald of Tradeston) July.
224. That is very helpful. That suggests, Minister,
that you have not only recognised that distinction but also have
a pretty good idea of where it may lie. If that is the case, it
would be interesting to know as soon as possible how much of that
investment of whatever level it may turn out to be is commercial
and how much is social because the implications for the public
side of this investment could be, I suggest, considerable and
I think, given that you are going to publish your plans this summer,
we ought to have some idea of your assessment of this extremely
important area now because the plans you will publish in the summer
will be the basis for taking us forward for the next ten years.
Can we have that?
(Lord Macdonald of Tradeston) We will certainly in
the commentary that we attach to the ten-year plan to be published
in July try to bring out some of these matters and we have also,
as I say, got to try and anticipate what the outcome of the refranchising
process in the railways will be too. So I would not promise any
exactitude in it but we will try and scope it for you, as the
consultants say.
225. I am not sure I want to be scoped, whatever
that may mean. The final question on this because I do feel it
is important. Is it possible if you have any reasonable assessment
of that distinction between commercial and non-commercial, that
massive amount of money, which I suggest by this time you should
have, to let the Committee have that? That is my question really.
(Mr Rowlands) We could certainly give you a view in
those terms, both the projects that are running and the projects
still in a sense developing, like the West Coast Main Line, and
an outline view of some of the major projects. It will not be
definitive because some of the projects to come have still to
be properly defined but we will try.
Mr Stevenson: That would be helpful.
Chairman
226. July is a nice month. Are we thinking of
publishing it on 27 July?
(Lord Macdonald of Tradeston) I believe, Madam Chairman,
we will probably be in the hands of Treasury here because it will
have to come out at the same time as the SR2000 Spending Review.
Chairman: And they would not dream of publishing
anything on 27 July? You will realise that parliamentarians will
find it of considerable interest and they will be rather unhappy
if this information comes into the public sector after the House
has risen. I merely point this out. Of course, I am convinced
the Government would never dream of doing anything like that.
I would put it on record we would like the Department to bear
in mind elected Members would have something to say. Miss McIntosh?
Miss McIntosh
227. On the railways issue, but it also applies
to all sectors of public transport, I gather in your Annual Report
that you are concerned about crime and fear of crime deterring
the public from accessing public transport. What specific measures
do you have in mind and what budget has been allocated to this?
(Lord Macdonald of Tradeston) In terms of measures
that are in progress in London, for instance, I know there is
the intended recruitment of 40 railway police, an additional 40,
on top of the work going on in stations across the country. It
is a remarkable fact that about 83 per cent of railway stations
in the UK have been significantly improved in recent times and
that improvement often includes CCTV cameras in station car parks
and elsewhere on the stations. I met recently with the British
Transport Police to talk about their concerns and we have obviously
offered them every encouragement and support from the Department.
I do not know whether there are any further detailed aspects of
security.
(Mr Rowlands) It is probably worth saying on the railways
side that there is a Secure Stations Accreditation Scheme running
in conjunctions with British Transport Police, which was put in
place a year or more ago, with a progressive number of stations
being accredited under that scheme. You have both the Railtrack
and the general station enhancement schemes, which, as the Minister
said, is a programme which is about eighty-three per cent complete,
better lit stations with CCTV helps, and specifically there is
the safer station scheme as well.
228. I am thinking particularly of the tragic
case of the girl who was killed coming off the Metro in Newcastle,
which for someone of that age was not particularly late to return
home. I do not know if you had the chance to review it in the
light of that? Could I just turn to rail freight, are you aware,
Minister, there is a problem for smaller freight operators to
access some of the contracts and that they feel that they are
being excluded? Where there is a good bid they would like to submit.
(Lord Macdonald of Tradeston) Being excluded from
being able to run on the track?
229. Yes.
(Lord Macdonald of Tradeston) Again, Madam Chairman,
the plans that we will put forward through Mr Rickett's Task Force
will try to expand rail freight in a way that brings more competition
to the industry and more variety. I do not know whether there
are specifics Mr Rowlands could add.
Chairman
230. You remember the target that was set by
EWS, Mr Rowlands.
(Mr Rowlands) They would say the EWS target was an
aspirational one.
231. That will not be achieved.
(Mr Rowlands) I do not think they will achieve their
target. We are now talking in terms of about eight per cent a
year rail freight growth.
232. Do you think that is anything to do with
your permission to allow the 44 tonne lorries to go ahead?
(Mr Rowlands) No, I do not think it is anything to
do with that at all. I think their aspirational target may have
been a touch ambitious in the first place. Eight per cent a year
growth is still doubling rail freight growth in less than nine
years. It would still be a major change.
Miss McIntosh
233. It was particularly the Potters who changed
this. EWS, with the greatest of respect, is a major operator in
terms of logistic companies who have the capacity.
(Mr Rowlands) Could I expand? As the Committee knows,
at the moment there are two grant schemes, the Track Access Grant
and the Freight Facilities Grant. The spend under those grants
has increased quite substantially in recent years. We will pass
through the Strategic Rail Authority responsibility for the payment
of those grants and, I think, with some confidence expect the
Strategic Rail Authority, who are working on this already to re-focus
the way those grants operate. They have been successful but they
tend to be company specific or project specific. What the SRA
would like to do, once it is set up, is to use the changed powers
it will have through the Transport Bill at the moment to really
re-order the freight grant scheme to make it more easily accessible
to new entrants on to the railway, including small freight operators.
234. That does not seem to chime with the figures,
out-turn expenditure on freight grants for 1999/2000 £52
million, only £24 million in 2000.
(Mr Rowlands) What was your first figure?
235. The first one was on freight grants for
1999/2000, estimated at £52 million in 1999 and only £24
million in 2000.
(Mr Rowlands) The out-turn last year was £24
million, the out-turn the previous year was just under £29
million and the year before just over £29 million. What you
need to look at is not just the out-turn but what the overall
picture looks like. If you remember, what we pay out in any one
year is a consequence of grants that we were awarded twelve months
or maybe two years previously. What you were seeing last year
was the consequence of the grants awarded a year or two back.
Although we only paid out £22 million last year, which was
a dip, the number of grants we awarded last year was an all-time
record. We awarded grants worth £36 million for rail freight
and about £13 million for inland waterways, which was substantially
more than in previous years. Although the out-turn dipped a little
last year, as a consequence of the leads and lags in paying out
grants, the underlying picture, how many grants we are awarding,
it is still going up. Next year and the year after we will see
£24 million replaced by bigger numbers again.
236. I see. Can I bring you back to the 44 tonne
lorries. You are quite confident it will have no effect on the
amount of rail freight and the growth in rail freight?
(Mr Rowlands) It would be foolish to say that.
(Lord Macdonald of Tradeston) I believe it will.
Mr Olner: Pass it over to the Minister, it is
bit difficult.
Chairman
237. I do not want to be unfair, Mr Rowlands,
do you think it will hinder or it will improve the amount of freight
and the development of the rail freight industry? What will it
do? Will it make it easier to develop a good rail freight industry?
(Mr Rowlands) You need to look at two things here.
238. I am happy to look at five, but I would
like you to answer that question?
(Mr Rowlands) I think it would be foolish to say that
the introduction of 44 tonne lorries would not have an effect
on rail freight.
239. I think we would go along with you that
far.
(Mr Rowlands) The other point you need to look at
is, what else are you doing for rail freight? Although I cannot
anticipate that element, as with any other element of a ten year
plan, with some confidence we can say that we will be addressing
rail freight in the ten year plan and with some confidence we
will say there will be something there for rail freight that I
would imagine should counterbalance the impact of 44 tonnes and
better it.
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