Examination of Witnesses (Questions 800
WEDNESDAY 16 JANUARY 2002
MP AND SIR
800. Which is less than one per cent?
(Mr Byers) That is separate from the debt of Railtrack.
801. As you probably know, many train operating
companies are also unprofitable, are you not concerned that this
is going to undermine the industry's ability to meet the objective
you set for the next 10 years?
(Mr Byers) You are right to say that a number of the
train operating companies have difficulties with the franchises,
and the Committee will need to look back at when the franchise
were awarded and the circumstances of them being awarded. I think
the industry will benefit from having a smaller number of train
802. Do you mean some of them going bust?
(Mr Byers) No, as we go through the franchise process
we will see, this is said clearly in the strategic plan, there
will be a reduction in the number of franchise holders. That will
be good because it will reduce the fragmentation, which has been
a real problem in the industry. It will also mean that out of
main termini in London we may have just one franchise operating
and that will improve efficiency dramatically as far as those
stations are concerned.
803. Can I clarify a few things, from an investor's
point of view what you are talking about sounds fairly draconian,
how much private sector funding are you hoping to attract?
(Mr Byers) The private sector is still keen to be
involved in the franchising process.
(Mr Byers) We have a very good example today where
the GNER franchise has been announced this morning. The Committee
will find out that represents about £100m in private investment
in a two year extension alone, money which has been committed
today by the private sector. Not just allegedly, hard headed business
people today are putting in £100 million on a two year extension
to one franchise.
805. Let us come on to this issue about franchising
and investment in the track. Everyone accepts that there are certainly
problems in fragmentation of the railways on an on-going day-to-day
running basis, is there not still a fragmentation in terms of
strategic planning? I draw attention to the problems of Midland
mainline and what happens there. The long term plan is to get
investment in the line, to upgrade it and speed up the train times
to Sheffield, that does not appear in the 10 Year Plan, as I understand
it. In the long term franchising arrangements there are proposals
to upgrade the rolling stock on the Midland mainline, but as far
as I understand no requirement to put tilting trains on, which
could have the desired effect of speeding the times up without
necessarily investing in the track. On the other hand, we have
franchising delayed proposals for the East Coast line, which will
eventually be extended beyond two years. There are proposals floating
round from Virgin to run to Sheffield from that line, and then
proposals to upgrade the whole of the East Coast mainline as part
of the infrastructure developments over the 10 Year Plan. You
have four different possibilities there of getting improved train
times to Sheffield but no one seems to be joining them up, even
in the 10 Year Plan, into any coordinated thinking.
(Mr Byers) Sheffield clearly is the place to be, that
is why all of these trains need to be running there. I think the
important thing about the Strategic Rail Authority now under new
leadership is it needs to give a lead, that has really been lacking.
806. Could you just repeat that? "It has
(Mr Byers) The Committee have said this as well. I
am reflecting the good advice of the Committee.
807. Over the last five years!
(Mr Byers) The Strategic Rail Authority has lacked
leadership. The Strategic Rail Authority operating effectively
would actually be able to overcome that sort of duplication process,
and using the franchise process is a way you can do that. I have
been disappointed that the franchise process has not been used
in the past as a key way of driving up improvements as far as
passengers are concerned. That has to change for the future.
808. While the 10 Year Plan actually leads the
way forward in certain issues it is not absolutely set in stone,
and because things are not mentioned in it, is there still scope
for them to be developed during the 10 Year Plan?
(Mr Byers) The 10 Year Plan, and this was said by
the Deputy Prime Minister when it was published, so it is not
just me saying it today, is a flexible framework. It would be
barmy to set in concrete a 10 Year Plan for transport, because
there will be changes during the course of the 10 years which
we are going to have to respond to. That is why it is a framework
within which we operate. We will review it and revise it in the
light of new demands and pressures being made. We will have three
Spending Reviews that will be conducted during the lifetime 10
Year Plan and that can build in, perhaps, new money, if we can
get it, and make a case to the Treasury. That is what we need
to be doing. It is a flexible framework. There are things that
can be added to the 10 Year Plan if there is a demand there for
809. Two very quick questions, forgive me if
you have answered this one already, the Automatic Train Protection
System how much will it cost and will it be implemented within
the time scale of the plan?
(Mr Byers) There is a clear commitment for its introduction.
Can I let the Committee know the precise cost of it.
810. An odd feature of the strategic plan is
the decision of the SRA, apparently, to consider handing over
franchising to the Merseyside PTE, which I think is a unique arrangement.
Do I take it that the mention of that is not a definite commitment
to that as a green light for that idea?
(Mr Byers) There has been some discussion about this.
We have said that the franchise process is basically horses for
courses. It may well be as far as Merseyside is concerned that
having the PTE involved and responsible for it would be the best
way forward for that particular franchise.
811. I think if the Strategic Rail Authority
are going to make the plan work, firstly, we have to accept they
are beginning very late, this should have been done at the beginning
of the last Parliament, not now. Given that we are where we are,
can I ask you if you are really satisfied that the SRA have enough
muscle to get the companies to deliver what they promise? You
said in your press notice, "Systems set up of privatisation
place no performance requirement on long distance operators"
you are talking about GNER, they are the first one, "and
a requirement on other long distant franchises as they are replaced
or extended". That is presumably what you have in mind. The
reality is that unless the SRA has enough muscle to insist on
delivery then frankly we are running so far behind we are going
to be in real trouble, we are in trouble today.
(Mr Byers) Two things have to happen. You are right
to point out that the SRA has to be in a position of strength
in its negotiations for the new franchise holder. The government
needs to give the SRA our backing to achieve that. Secondly, we
do need a new approach to franchise, this is a point raised in
the House the other day, which will allow the SRA to take into
account previous performance by franchise holders in deciding
whether or not they are an appropriate holder of the franchise.
Their record should be used, for some it will be of benefit, because
they have worked well, and for others it will be a real disadvantage.
They should recognise that it is how they perform with franchises
they already have which will be used in judging whether they are
appropriate people for franchises in the future. That is a very
powerful message when we are, perhaps, thinking of reducing the
number of franchise holders.
812. You will realise that the award of a franchise
to somebody like Stage Coach was greeted with almost unmitigated
horror by the passengers. We will need some very firm commitments
on these matters. Can I also say to you that bus substitution
is a matter of very grave concern. As so many of these companies
are fundamentally bus I hope the SRA is going to make it clear
that the substitution of buses on rail services is not an alternative
that is acceptable.
(Mr Byers) My reply is going to be that a bus is not
a train. I know that will be written in the newspapers tomorrow,
"Secretary of State, Great Revelation". It was a point
raised by the honourable member for the Vale of York in the House
on Monday. If you get a route like Thirsk up to Newcastleand
I know because I have done that route before when I have lost
money at Thirsk racesyou can travel reasonably quickly
by train, but the idea of having a bus!
813. It makes the loss even worse.
(Mr Byers) It is a serious point, a bus is not a train.
814. Are we going to make it very clear to these
companies that they have to comply and things like removing lavatories
from rail rolling-stock will not do? Can I also ask you, Secretary
of State, are you going to insist on a proper staged programme,
a proper timetable for replacement of rolling-stock? There is
absolutely no point in people announcing they are going to take
on new rolling-stock if the length of time taken on the safety
case and the length of time to bring them into operation is such
that passengers are still waiting two years after the event, as
has been announced.
(Mr Byers) I believe that lessons have been learned
by what has happened over the last few years. You are right to
point out that the quality and the technical ability, and so on,
of rolling-stock has been poorly lacking. I am afraid it is a
consequence of decisions that were taken 10 years ago, when many
good manufacturers went out of business because of the orders
on stock in privatisation.
815. Secretary of State, given your performance
today do you think your mother will be calling a radio station?
(Mr Byers) My mother has never called any radio station.
I am afraid once again it is a question of, do not believe all
you read in the newspapers. She is 78 years old and she should
be left alone by the press actually.
816. 78-year-olds quite often have things to
(Mr Byers) I can say that my mother has a lot to say
Mrs Dunwoody: Quite right.
817. I am rather hoping that his mother and
my mother will not get together. Can I say that I do welcome the
announcement about GNER. The Secretary of State has raised an
important point about bus service replacing trains. Can I ask
a further question, obviously one of the companies involved is
going to be subject to strike action, where we gather that 18
out of the 25 train operating companies are facing loses which
total substantial amounts of money, can we have an assurance from
the Secretary of State today that any company which falls victim
to industrial action will not be made more vulnerable to rail
(Mr Byers) I think it is important that companies
that have failed on performancefor example, replacing Thirsk
to Newcastle by a busis something that should be taken
into account when it comes to refranchising. Industrial relations
is an issue that will be taken into account, not in a negative
way. The important message in all of this is that we want both
sides to talk and to negotiate a settlement. The message to railway
workers is that it is not in their long term interest to have
disputes on railways, because people will find alternatives, and
they risk putting their jobs on the line as a result. It is in
their interest to get a solution as well.
818. It is also true that if there exists a
machinery by which individual workers in the rail industry can
be consulted before any action is taken then that democratic right
is not going to be removed from them.
(Mr Byers) I have made the position very clear as
far as the government is concerned in relation to that. The important
thing is that those individual railway workers through their unions
and the management get together and talk and try and arrive at
819. Secretary of State, you referred several
times this morning to the key areas of your Department, I was
tempted to wonder whether you could give a list of the areas of
your department which were not key areas? Perhaps you would not
want to do that. How far do you feel that the rail issues and
one or two others are really distorting the overall performance
of the Department?
(Mr Byers) It is clear that at the moment there is
a great concentration, and rightly so, on issues to do with the
railways. Railways are used by 2.5 million people per day and
the quality of service is not good enough and we have to improve
it and we have a responsibility with the industry to do precisely
that. There are big decisions about to be taken on London Underground.
I was very clear when I was appointed in June that I would have
to take these difficult decisions in relation to the railways
and London Underground and to do it quickly. I have done that
and people have criticised some of the decisions. I am clear that
to muddle through and to tinker round at the edges would have
been the worst thing to have done. Decisions are going to be taken
and we are going to get on with it. I hope that by doing that
we can stabilise the position in relation to transport and then
those other big areas for which we have responsibility, which
I am still very closely involved with, the local government White
Paper we had before Christmas, the planning Green Paper, a new
initiative on housing, the whole regional agenda, all of those
issues, all very important, are being worked on at the moment
and they will be worked on over the period ahead. The media does
not focus on them as much but the work is going on and we are
making a real difference as far as they are concerned.