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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 981 - iv House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE ENVIRONMENTAL AUDIT COMMITTEE
Reducing Carbon Emissions from Transport
Wednesday 26 April 2006 MR ADRIAN LYONS and MS LOUISE SHAW MS HEATHER LEGGATE and MR DAVID LAPTHORN Evidence heard in Public Questions 278 - 370
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Environmental Audit Committee on Wednesday 26 April 2006 Members present Mr Tim Yeo, in the Chair Ms Celia Barlow Mr Martin Caton Colin Challen David Howarth Mr Nick Hurd Mr Graham Stuart Dr Desmond Turner Joan Walley ________________ Memoranda submitted by ATOC and the Railway Forum
Examination of Witnesses
Witnesses: Mr Adrian Lyons, Director General, the Railway Forum, and Ms Louise Shaw, Systems and Standards Manager, the Association of Train Operating Companies, gave evidence. Q278 Chairman: Good afternoon and welcome. We almost need a commuter service between us and you! We were unable to book our usual room for this session. Thank you very much for coming in. It is a very important part of our evidence gathering for this report which we are in the middle of preparing. Just to kick things off, I wonder whether you would like to say how important you think rail is in the whole process of reducing carbon emissions and what you see as the progress which there can be in moving towards our goal. Mr Lyons: I think rail plays a really essential part in this, not that rail in itself has a major impact on the environment, but that actually rail can reduce the impact of others on the environment in a way which I think probably no other powered transport mode can do. The way forward is very complex and I think you will probably be examining this. The railways have come through quite a dramatic period, we can describe it as, where the issues, of course, of performance, industry structure and safety have loomed very large indeed, and to be quite honest sustainable development issues have not received the priority which I think many of us would like to have seen. I think we can now confidently say the industry is significantly more stable than it was a few years ago and the sustainable development debate and activity is now beginning to emerge, I think, in a most positive way. Ms Shaw: Yes, I think that is very fair. We have been through a very difficult time, but we are making some very positive moves. Q279 Chairman: I am sure that will be quite a widely held view. I certainly, as a longstanding enthusiast for railways, welcome the fact that things seem a bit calmer. Given that is the case and given the potential contribution which even greater use of railways could make in terms of reaching national targets for cutting carbon emissions from transport, do you think the Department for Transport puts enough emphasis now, looking forward, on further cuts of carbon emissions in its strategy for the rail industry? Ms Shaw: Carbon emissions from the railway industry per se are not going to make a huge difference to the overall picture for transport in the UK. We are already very, very low producers of carbon compared with, say, the air industry or the roads. Where the contribution can be is in encouraging more freight and more passengers rather than making specific gains per se either in the rail freight industry or the passenger industry. So the emphasis from sustainability has increased noticeably in the last twelve months certainly with two particular individuals, Clive Burrows and Mark Hamworth fully on board with the sustainability agenda. Clive, the technical director, is working on the sustainability aims which we all want to see in the technical strategy which collectively the industry and the Department is working on to produce later on and into next year. Mr Lyons: I agree with that, Chairman. We are very pleased that the Secretary of State in the middle of last month announced (which we have been discussing for some time) that there be a proper long-term railway strategy. The whole sustainable development debate on the railways has got to be long-term; it is not something you can sort out in a matter of months. The other key issue now, I think, is that after probably an over-long delay we now see this emerging focus on sustainable development in the Department for Transport for rail. For a long time we have been pointing out that other modes of transport have received very significant incentivisation to move to lower emissions, power shift, clean up and all these other things in the road industry, while the railway industry was just left on its own. I think that is being rectified now. Of course, we have yet to see the overarching strategy and its technical strategy, but we are looking forward to that next year and I must say that DfT is making an attempt to discuss this with the industry to get the widest views. Q280 Chairman: The point was very fairly made that the biggest contribution which railways can make in cutting carbon emissions is not by reducing what is already quite a small proportion of emissions from railways themselves, it is by getting a bigger share of both passenger and freight traffic moving from either roads or air onto railways. Given that that is where the big gains are to be had, what will you be suggesting to the Department they should be put in the rail strategy? You say they are consulting, and that is good. This is an opportunity for you, as it is for us, to make some strong pleas and partly in the line of what you tell us we may want to back it up. What would you be hoping for now when this document comes out next year? Ms Shaw: Technically, we know we need to move on from the fuel sources we have at present, so there needs to be some recognition of some diversification of fuel source in addition to what we have, the diesel and the electrical supplies we have presently. We know that has to come into the technical strategy. Hybrid locomotives show some significant promise but have a long way to go in terms of whether we can practically implement them. Certainly in the short term, even in the medium term, we will lag behind road. We are quite comfortable with that. That is where the volume is and the proving ground can be, and we are very comfortable with lagging behind road on that. In terms of the overall strategy, there are many more things which rail can do which are very specific in terms of managing or improving the capacity we have. We have a very mixed railway at the moment, freight trains running in amongst passenger trains, and that is a constraint on capacity because they run at different speeds and have different technical characteristics, but it also means in terms of the energy consumption particularly it is not good for the freight trains to have to keep stopping and starting to make way for fast passenger trains. Equally, it is not good for the passenger trains to be kept down to the speed of a slow freight train. So we need to do some specific capacity-related things, and things like the high level output specification will enable the sustainable development of the railways - indirectly almost, it is not an objective in itself, it is what you will get from a high level output statement - to proceed that much better. There are two angles, the technical angle and the strategical angle, which will work by themselves but effectively work together. Mr Lyons: If I could add, Chairman, we do face a fundamental problem. The network is tiny in relation to roads and it is a very simple calculation that every one per cent shift from road equals a ten per cent increase in demand on the railway network. Quite frankly, we are reaching the limits of what the present network can do. Of course, in the short term we can lengthen trains and we can sort out some of the bottlenecks, but they are not going to increase the capacity to significant levels if you are going to make a really major shift from road and short-haul air to rail that is needed. Clearly, we have got to build some new capacity at some time, if not in the next five years in the next 15 to 25 years. Again, I think there is an increasing recognition that in so many bits of British infrastructure capacity is one of the big problems and at last we are seeing some movement from Government to try and address these with the Eddington Report, the strategy, and so on. Q281 Joan Walley: I just wanted to pursue that a bit further with you because in my own constituency, where we have got EWS, there is a conflict between the high speed trains down to London and extra capacity and freight. What I am really interested in finding out from you is, given what you are saying about welcoming the Department for Transport's long-term strategy this is as much about incentivising in terms of Treasury as it might be about PFI bids in terms of getting capital into building new infrastructure. How much do you think the Treasury and the Department for Transport are really taking on board the need for decisions to be made now for that extra designated capacity for freight in terms of the long-term rail strategy, without which the train operating companies cannot really operate either because you have not got the space? Mr Lyons: Absolutely. I think you are exactly right. As at today, to be quite honest the railway does not have a longer term strategy. Network Rail has short targets for another few years, to 2009. There is, of course, the Government commitment to Crossrail, which we welcome, and we know that the Eddington Report is looking at such things as high-speed lines, but those are not firm commitments yet. I think the key issue now is in two levels. One is, there is a great deal of work taking place led by Network Rail on the re-utilisation strategies (as it is called) which looks at what you can do in the short-term to try and increase the capacity on the network. One of the key ones which are going to be introduced is the freight utilisation strategy, which is due for production sometime in the course of next year, which is going to look at freight nationally and see what needs to be done. It could be argued that this should have been done a long time ago, but again like lots of other things other priorities overran it, but now at long last that issue is being addressed. However, I would say that too often decisions have been made in such things as the port expansion at Thames Haven, as a good example, where a major infrastructure project is put in for one mode of transport without thought of how land-side distribution is to take place and these sorts of issue have got to be addressed. Q282 Joan Walley: Yes, but my point also is that unless that is matched by a similar priority, for example in terms of the comprehensive spending review and getting it into the Treasury at this stage, whatever the transport strategy says unless it is backed by the Treasury how are you making sure that those representations are being made to Government? Mr Lyons: They are being made very strongly. Freight is very interesting because rail freight is not seen as a rail only problem. The Freight Transport Association has been extremely active, as you may know, in promoting with the Rail Freight Group a better future for the country, which includes rail. There has been, as you may know, a concern over the various grants for freight, the freight facilities grants, which are relatively small sums of money but have a significant multiplier effect, which tend to have been cut at short notice, and of course significant problems with local stakeholders because they suddenly find they have got a good idea for freight and find they cannot introduce it because barriers are put in their way. I am not at this stage 100 per cent confident that Treasury in the comprehensive spending review is going to meet every rail need. I would like them to because I think if they do it will be money well invested, but at this stage I think they need a lot of convincing and we are trying to do it. Q283 Mr Hurd: In relation to the need for expanded capacity in the context of what you have just said about concerns about the spending review, where would you prioritise geographically? Where is the capacity most needed? Mr Lyons: For freight? Q284 Mr Hurd: Not necessarily for freight. You were talking generally about the need to expand rail capacity - Mr Lyons: You basically start in the greater South East, where for a whole number of reasons we are seeing longer distance commuting, huge population growth, the ODPM's sustainable communities policies, and so on and so forth, all of which point out the need for extra capacity, not just on the railways themselves but in the car parks to put cars in so that people can get to stations. Those are being addressed in the rail re-utilisation study. There is a very interesting one for South West Trains which began recently, which I think was very much a benchmark of what we should be seeing. We have got to have Crossrail, whatever the difficulties of it. That sort of major enhancement of east-west flows across the South East is absolutely vital. Again with the South East, freight from ports, particularly Felixstowe and the ports in the Thames estuary and Somerset and Southampton, has got to cross the grain of passenger services over extremely busily used lines and must be separated. Further afield, we have clearly got some major capacity constraints on the eastern coast mainline arteries for the future. Regrettably, the west coast mainline upgrade, although it will very significantly improve the reliability of the line, has not increased the capacity enough for future growth which we can see over the next twenty years. Finally, we need to look at the other conurbations outside London, because many of those have constraints on them, and that is actually where a mixture of probably light rail and heavy rail coming together can produce some solutions which actually meet local needs. It is a big agenda, I fear. Almost everywhere you look we are stuck. Q285 Colin Challen: Just following on from that, we are well into the Government's integrated transport strategy. Could you point to its greatest success for us? Ms Shaw: How big a hole do I want to dig for myself? There is a number of spots where the simple application of sensible policies has demonstrated quick pay-backs. If I could point to the Nottingham tram scheme, for example, the tram station has been sensibly positioned right next to the main railway station in Nottingham. The passenger numbers are well in excess of those forecast for the first year's operation. It is a very well introduced scheme, very well run presently and in its introduction by the operator and is now being held as a flagship for Nottingham going forwards as a good place to live. The layout of the tram stop at the station is such that the extension south into other parts of the city has been easily enabled because the bridge is perched right at the level to go straight over the top of the station. So that will enable a much easier extension of the tramline should the local authority venture to try and persuade the Secretary of State that trams really are not such a bad idea after all. Integration between buses and trains has much less of a profile, I would say, nationally because people tend to think of buses much more as a local service than a service which enables them to go longer distances which the trains usually serve, but if I could think of integration in terms of local train services meeting and working well with national train services, Ashford and Waterloo, particularly with the Eurostar, I would say is an excellent example of an integration system. Clearly Waterloo is a huge volume station and feeds huge numbers of people straight into the Waterloo terminal for Eurostar, but similarly we are seeing increasing numbers of people in the South East using the local services to get into Ashford station to access Paris, Lille and Brussels. If one could see similar examples of high-speed rail in this country with high-speed rail stations being fed by local rail stations from conurbations for larger cities which do not have the direct high-speed rail themselves, I think that would be a very positive move if we were to consider integrated transport. Q286 Chairman: Just on the capacity point again, how much increase in capacity could be achieved by radically overhauling the signalling system? I see from my flat in London planes lining up to go into Heathrow one a minute and I can see four going in at any one moment. You cannot run trains one minute apart, I am told, on the major Intercity lines because it is too dangerous. Ms Shaw: There are ways and means. London Underground has some extremely good operating practices which enable them to have the shortest possible time between trains. The signalling systems we have in place at the moment certainly do not lend themselves to shortening up the distances between trains quite in the same way as you might see with London Underground. There is a technical solution which is being proposed by the European Commission and the Supply Community in Europe at the moment called ERTMS. I would say at this point in time ERTMS is not the panacea the suppliers claim it to be for a number of quite simple reasons and it is not something which is going to be solved in the very, very short term. However, there is now an increasing level of understanding just how we might get to the situation where the ERTMS system would increase the level of capacity in the amount of traffic which is available, but we have some significant development at a European level to do on our train operating practice. We have to develop a deal more cooperation between the Member States and between the railway companies in those Member States to get to a point where ERTMS is affordable from the point of view of the railway undertakings as well as affordable for the infrastructure manager. We have an unfortunate situation where the individual Member States develop their own little bit of specification to go with a core of ERTMS which for an international operator like EWS, say, wanting to run across several Member States makes it a very, very expensive signalling system. Each infrastructure manager thinks, "I'm fine. I've got my signalling system, it's ERTMS. I can put a big tick in the box and smile at the Commission next time I see them." For an international operator it means you have to get an ERTMS system for Britain, and ERTMS system for France, for Luxembourg, Germany, and so on, and in the short term until we get that ERTMS system sorted so that it works the same way whether you are in Dover, Dublin or Milan, then that is the point at which that capacity increase will be realised. Q287 Chairman: To an ordinary lay person with a little bit of business background it sounds hellishly bureaucratic, what you have just said. You have got a situation where you are a train operator, you are bursting at the seams with capacity, you have got huge demand - the level of usage in your industry is at a 45 year high and more of them want to do it - why on earth are you waiting for some perishing European Commission? Why do you not say, "We've got some track here. I can double the number of customers I take on it and double my profits by getting a better signalling system"? Mr Lyons: I think you are exactly right, Chairman. In fact a lot of advances have been made, but at present, of course, the London Underground has the advantage that trains travel between stations relatively slowly so their distance for stopping is not that great. On the national railways, for example at Waterloo, you have got much longer trains, much heavier, so the distances between trains have got to be greater. They cannot follow nose to tail because it is positively dangerous. One immediate advance which has been made has been the introduction of what are called the integrated control centres, and Waterloo was one of the first ones, where the Network Rail staff and the train operating staff work in the same room to the same set of orders, but most importantly they have now got some very clever software which not only shows you where every single train is on the system but a huge amount of additional information and of course because it is in the machine you can sort out train paths much, much better than you can doing it manually from a signal box. That is stage one. The next stage, you are exactly right, the Holy Grail of train operation must be what is called a moving block where each train has its own protected area and responds to every other train around it, making sure it does not come too close to danger. The problem has been that we made the decision to go for a Europe-wide standard some 15 years ago now and progress has been disappointing and costs are clearly far too high. I think it is the duty of all those who have the interests of railways at heart to be pressing the Commission and the European Railway Agency to move on from where we are now, because clearly we are not moving fast enough. Clearly signalling is one of the most expensive elements of railway operation and, of course, it is one of its weak points too because clearly if it fails the system comes to a halt. Ms Shaw: Perhaps I can add a little more to that. The rate of progress on the RTMS particularly has improved significantly in the last two or three years. The European railway industry is learning much, much better now how to get on and create a system across Europe which we can all agree to and work with, and the establishment of the European Railway Agency from that point of view is a very positive thing and we have a great deal of confidence in the individuals and the structure of the European Railway Agency to actually deliver something like ERTMS in a much more controlled fashion which we know we can all afford and which will technically deliver what we want it to. Q288 Chairman: I will not pursue it too long, but I am mystified why someone who is running a commuter train into Waterloo from Basingstoke needs to have a Europe-wide system. The only train which ever goes from this country to another one is the Eurostar. The requirements for Continental countries are fundamentally different. Who was the lunatic who signed up for this European deal in the first place? Probably the last Conservative Transport Secretary! Ms Shaw: It is quite simple. The supply market is not Britain, it is not Germany, it is not France, it is Europe now. We have a limited number of supply companies. They all serve the whole of Europe, and in fact the Chinese are very interested in ERTMS because they think that is the way they are going to buy their signalling in the future. Mr Lyons: Any software-based system benefits from being an international standard. The worst thing would be to have Britain with its own train control software, and Germany, and so on and so forth. We do not do it with mobile phones and we do not do it with motor cars, and I do think that if we can try and get a global standard for railway control it would be for the benefit of the industry and it would help bring costs down Chairman: It appears to me that both the mobile phone industry and the motor car industry are rather better at responding to increases in demand. Q289 Mr Stuart: Getting positive, in your memo you describe an ambitious scenario to rail growth with a number of expansions and improvements to the railway network by 2020, all accompanied by national road pricing. Have you estimated the carbon reductions in such a scenario and does the Department agree with your assessment, because I think in some of the earlier questions we were trying to tease out your assessment of the benefits from the move? Mr Lyons: I think on a very broad rule of thumb, and academics will argue around and around this thing, but in general terms if you can shift something onto rail you should be looking at having a carbon imprint of about ten per cent of the equivalent road traffic. There are going to be variations. With a lightly loaded train and a Toyota Prius, the Toyota is going to look more attractive, but certainly a well-loaded train or a long freight train is very efficient. It has a minimal carbon imprint. So basically you can be into millions of tonnes if you get this shift, but of course the driver has been the broader sustainable development agenda. Clearly a transfer from rail brings other benefits besides emissions; it clearly has social inclusion issues attached to it and it certainly has economic growth and regeneration ones as well, and it is on the latter that the case for railway expansion is principally being made at this stage. Q290 Mr Stuart: So the Department and yourself basically see the contribution to the carbon issue in particular in precisely the same way? Mr Lyons: No, because to be open and honest with you, at this stage there are no sustainable development targets for rail. It is clear that any modal shift brings significant environmental benefits with it, but they have not been the principal drivers for looking at modal shift. So it has not been the issue which has discussed mostly between the railway industry and the Government at this stage. Q291 Mr Stuart: I am very glad that you are both here today so that this can be highlighted, because I think the Members of this Committee will be slightly stunned at that. David Begg, who has recently written that the success of the Government's entire transport policy actually depends on railways driving down their costs. How are you responding to that particular agenda, and can you do so in a way which will also drive down carbon emissions? Mr Lyons: Yes, because a good sustainable development policy is an efficient transport one as well by definition. Of course, on costs, we are coming off that extremely high level of costs which occurred after Hatfield 2000. Network Rail's business plan is actually working well. It is actually coming in well under budget, which is almost a matter of concern in some quarters, but it clearly does represent a rapidly gaining pace of efficiency. There is clearly going to be an even tougher regime for the next control period (as it is called) for Network Rail, which is 2009 onwards. That is being negotiated now, so that is going in the right direction. We are also seeing, of course, with most franchises being re-let, they are either having to pay a premium - which we would argue in sustainable development terms is a somewhat odd thing to be doing, but it clearly is because the industry is being run much more efficiently and the operators can clearly see where they can grow the market profitably, and the Government benefits from that. Then finally, of course, there is the whole set of proposals to move on the industry and to expand capacity as economically as possible. The more you can get longer trains running more efficiently with more passengers on board, costs come down as well. So there is a whole package of measures and everything looks as though costs are coming under control. The longer term problem, though, is where do we go over the next 10, 15, 20 years? Q292 Mr Stuart: Can I follow up on that? You mentioned the premium in terms of the carbon emissions debate and you have just expressed some doubts about the premium. Do you think the current situation means that services which could possibly be expanded, subject to capacity constraints, and with lower prices might attract more passengers, are basically not doing that because they are subsidising other services which would not have the same carbon impact? Mr Lyons: I think what we have got to ask ourselves are some pretty fundamental questions about how transport pricing is arranged. Clearly, it has been a priority of the Treasury and the Department for Transport to bring down the costs of the industry, and the industry would support that, and one of the mechanisms of that is letting out franchises so that we get into a situation where they will pay a premium for the licence to operate. One could argue that that premium being paid by passengers should see its way back onto the railway to further enhance the business and to add overall to a positive sustainable development outcome. At present we do not see that. At present the premiums are seen, I think by the Treasury and the Department for Transport, as an offset for the money they are paying Network Rail in grant. I would like to see a much more logical strategy where those modes of transport which are sustainable-friendly are given real incentives to further expand and increase their business and not, if you like, run to a reasonably tightly constrained franchise. Q293 David Howarth: Can I just come back to the question of your interaction with the Department, because what you said was extremely surprising. You go to talk to the Department and the discussions are about economic development and social inclusion but not about climate change and carbon. The Department officially shares the climate change public service agreement with other departments. Can I just ask you how the discussions go. Is it that you try to raise the environmental advantages of rail and they say, "We're not interested in that," or is it that you just react to what they are interested in, so you do not try to raise it yourself, but they never raise it with you? In other words, have you tried to raise it with them and been rebuffed, or is it that they never raised it? Mr Lyons: I will answer the generic one. Of course, we raise sustainable development. I personally, the Railway Forum, have been talking to the Department for four or five years about it now, as long as I can remember. I have to say that the priority in the rail area of the Department has been very firmly focused on cost and performance. On the issue of environmental impact, because it has always been perceived that rail is by far the most environmentally beneficial of power transport modes this has not been seen as the priority which those involved in rail and the Department have necessarily addressed. We have been saying they should, because we think the pay-off would be very significant if they did, and we were very pleased that the Secretary of State in his talk to the National Rail conference on 16 March mentioned a sustainable development agenda for rail for the first time every publicly. We have never seen that before and we were grateful. I think it is because of interaction between the industry and the Department that this has got onto the agenda as an important issue to be addressed. Ms Shaw: Yes, I would say it has made a very pleasant change. A number of the TOCs and the owning groups have taken their environmental and sustainable development responsibilities very seriously. If one were to check the National Express Group or the First Group on sustainable development, you would see that this is something they do treat with a significant degree of seriousness. It has been a very, very pleasant turnaround to have people like Mark Lambeth and Clive Burrows take the agenda quite as seriously as they have and they are now pressing us for things that we can do under the sustainable development agenda which they can build into the strategy, having had a chance to sit back and review it in the wider transport policy. Q294 Ms Barlow: The number of rail passengers has gone up sharply in recent years. Ms Shaw: Yes. Q295 Ms Barlow: How close are we, particularly in the South East, to overloading the network? How much scope is there for moving from car to rail and how much investment would it take to make a really significant shift? Ms Shaw: Outside of the peaks, we are nowhere near capacity. If you want to travel in the peak hours, then we are very, very close to capacity already and in some places we are probably in excess of capacity, theoretical capacity I should say. We could alleviate capacity in the short-term with a number of very small-scale investments to relieve various pinch points, either at stations or junctions of various kinds, and we are not talking vast amounts of investment. To make a step change would take a significant project, something of the ilk of the Kent domestic trains running on the high-speed rail link, will constitute a very significant increase in capacity for certain parts of Kent and the Thames expansion area, but that has been achieved at a significant cost to the CTRL. The CTRL in itself has achieved a huge increase in capacity and has grabbed an enormous share of the market between the three capitals and demonstrates very nicely what a well-thought out, well-run and well-resourced train service can do. I believe that the integrated Kent franchise with the new trains running on the CTRL will represent a big change in the amount of capacity, particularly from Ashford into the north of London rather than Ashford into the south of London. It is difficult to give you a precise indication of just how close to capacity we are because there are particular points where we are at capacity or over and above, but either side of that there is some scope. So if we could do something about those particular pinch points, then clearly more capacity would be available. Conversely, if we were to look at a different kind of step change we could make some trains longer. That would require investment at junctions and stations. Double-deck has been raised. That would be a very, very long term thing to do and would probably require investment in new lines, I would say, rather than developing the existing lines because one of the projects we have had ongoing for some time has revealed just how much of a challenge building a double-deck service would be and it would take some significant philosophical changes in terms of operating practice. It would require some separate platforms at stations and that sort of thing. So in the shorter term longer trains is probably a better bet, and we can do that on some routes already. Q296 David Howarth: Can you just explain that a bit further, because you see double-decker trains in Holland and the RER in Paris is double-decker. Can you just be a bit more precise about what the changes needed are? Ms Shaw: It is quite simple. We built our railway before everybody else did and did not realise just how much of an advantage it would be to have extra space. It is like the difference between, say, sitting in an Austin A40 and the present BMW 5 series. It is just that much extra space in strategic places which gives you sufficient room to actually put all the seats at a low level and high level and still have all the additional equipment you need for lighting, braking systems, air conditioning, and so on. We have a project in place to make the existing high-speed routes work with longer coaches and slightly wider coaches which will give us a single digit increase in seat capacity for the Intercity routes, and that seems to represent a far better cost benefit than having to spend a lot of money moving structures, moving tracks further apart from each other just to get enough room for two trains to pass each other at all points. We know that enlargement for double-deck trains would help with high capacity container trains and in some places some investment has taken place, such as Ipswich tunnel, on the route through from Felixstowe to Nuneaton to allow that to happen, but even if you do that for 9ft 6in containers, which are the highest present boxes, you still do not create enough space for double-deck trains. Q297 Ms Barlow: To continue with capacity, the Government is considering the possibility of national road user charging. How much linkage is there between the Government's policy for road and the policy for rail? Are they taking fully into account the need to increase capacity for public transport if they should bring this in? Mr Lyons: The answer is that there is no direct linkage at this point because clearly the form that national road user charging will take is not yet entirely known. It is quite clear that the levers you get when you have a national road charging scheme can be pulled in all sorts of directions and have all sorts of outcomes. At present it is quite clear that if there was a national road user charging scheme which was to significantly discourage motorists, particularly in built-up areas, and encourage them to move to other forms of transport - because the studies did show that by and large people will look for other ways of travel, you will discourage a certain amount of travel - public transport systems in Britain would quickly find themselves in many cases completely overwhelmed. This brings us to the big argument that if you are to move to a national road charging system, how are you to introduce it, what outcomes are you going to see, what modal shift are you going to get, and how are you going to cope with it? We have not really got to that debate at all yet. There is no sense of that. This is because we lack a really overarching transport strategy which has addressed all these issues in a way which can be successfully managed. Q298 Mr Hurd: Just to follow up on that point, I think the Government is in conversation with something like 32 local authorities about setting up road charging pilot schemes, and I think their hope is that it can be tested on an inter-urban basis. To what degree is the rail industry involved in those conversations and those discussions? Mr Lyons: On the edges of it, to be honest, at this stage because most of the local authority road charging schemes are at a relatively early stage of development as well. Where, of course, they are principally taking place, or many of them, is in the passenger transport executive area and by and large already the PTs have a well-integrated view of public transport and they can manage the business. The trouble is, of course, that even quite a tight local scheme has significant impacts outside its own area and this, I think, is the problem you hit with trying to do these schemes piecemeal unless you have got a really good overarching view of where you want to end up, and I think at this stage, quite frankly, we have not got it. I think the reasons are self-evident. I think there are some major technology issues which have got to be addressed. I think there has to be some major public policy issues which clearly have to be addressed ranging from privacy and security to what sorts of towns and cities we are actually trying to build amongst the countryside, and until that is really explored I think to some extent the railway industry is just warning that if there is to be a major shift to this form of road control we have got to be involved and it has got to be done in a way whereby if change is made, public transport does not let the system down. Q299 Joan Walley: Could I just follow that up and just ask what the mechanism is for you to be involved in that strategic way in that overarching policy, because there are whole swathes of the country where there are no PTAs and where there is not that kind of joint mechanism at a local level which could connect the whole thing up? Mr Lyons: Obviously the way you would see it link into the railway industry would be through DfT and the rail group there would have to be the conduit. Clearly, the other two major players would be Network Rail, because it has custodianship of the network but of course in the case of London, Scotland and elsewhere would have to take other issues into account, and of course the Association of Train Operating Companies plus the freight operators. So there is quite a number of people involved. Q300 Joan Walley: What I am trying to get at is, are you saying that is happening or that it is not happening sufficiently? Mr Lyons: There are no hard facts to transmit at this point. We have not really got to any stage yet in road pricing at which the railway industry has had to get involved. Q301 Joan Walley: The point I am making is that if the rail industry is not involved in the road pricing argument, then it is going to be an add-on at the end, is it not? It should actually be shaping the shape of their future policy at this planning stage? Mr Lyons: We, of course, have been consulted. Network Rail and others have played a part in the consultation process, but I would stress again that until we actually get to firm decisions - and I do not think it is a case of add-on because the railway industry would be in the position of saying, "Look, if this is the scheme proposed, this is what our response is." I do not think you can do it the other way round. I do not think the rail industry can go and say, "Look, we ought to build all these railways because we think road pricing is going to come on. I think we have got to do it from what we think the future demand pattern is, and then the rail industry can respond to it. Q302 Mr Hurd: Can bring you back to your earlier comments about new housing. As you are well aware, a number of new housing growth areas are being planned. Are they being planned with adequate rail links and do you have any comment on the degree to which the Office of the Deputy Prime Minister and the Department for Transport are working together? Mr Lyons: There is an onset of projects, of course, and it is very interesting to look at Ashford, for instance, where there is very substantial rail provision and where it looks as though Ashford, certainly from a rail infrastructure point of view, is being able to cope with the sort of growth of 30,000 plus houses in the next 10 or 15 years. There must be greater doubts on some of the other schemes with Cambridgeshire. We can see them. Clearly rail is the solution to successful transport infrastructures. You only have to look at Milton Keynes and Basingstoke, for instance, and Basildon, which are earlier examples where rail has solved a lot of problems. Transport for London certainly has got some very clear views of how it has got to help improve the Lee Valley corridor (as it is called) which gets you out into Cambridgeshire and the City. I think it would have been better if some of the sustainable community plans had been more factored into transport plans at an earlier stage, but like a lot of these things, so much in Britain in planning terms happens organically. Something is suggested and then a response comes up to see if it actually can be sustained. I think we are in a reasonable debate. I do think, though, that the number of places where we have capacity constraints on the network are now getting so great that some sort of ordering of all this would be quit helpful and this is where we are looking forward to a strategy from the Government looking out over thirty years which will give the Government's view of what it wants the rail industry to be doing for the future and then we can see how we are going to make it work. Ms Shaw: The building of transport as an afterthought is a recipe for an expensive project and a less than optimal one. If you consider how people are going to move in and out and to the next big city early in the process, you can much more often hit a solution, probably about the same as you would have done afterwards but at a much lower cost and in a much more ordered fashion. The development then becomes sympathetic to the town, the location, or whatever it is, but also to the countryside which surrounds it. Q303 Colin Challen: Are there any schemes between train operators and employers to incentivise off-peak travel patterns? Ms Shaw: Not specifically employers themselves. People like South West Trains have instigated schemes such as Megatrain, which allows you to book tickets at a significantly reduced rate off peak. There is a range of fares which encourages people to travel as far as possible outside of the peaks, which exists from the long-distance operators and from the shorter and the urban operators. I am not aware of any schemes per se between employers and the train operating companies. Mr Lyons: Many firms offer very valuable family concession schemes and sometimes free travel to use trains and often they are limited to off-peak, you cannot use them in peak hours. Ms Shaw: Where there is some cooperation, I should add, is that the London-based operators work with various attractions in the capital, London Zoo, the theatres, and so on, to encourage leisure visits as far as possible outside of peak hours by offering discounted admission prices, and so on. There is a number of temporary or long-term schemes which exist like that. Q304 Colin Challen: Is this something which could be developed? I have a constituency which is near the centre of Leeds with commuter train lines which go into Leeds. By the time a train passes through my constituency it is always full and if people could be encouraged to go an hour later then they could benefit possibly from concessionary fares. Large local employers should be working with yourselves, and vice versa, because it does not cost anything, there is no infrastructure. So is that something which you think could be taken up? Ms Shaw: I would say there is certainly some scope. Q305 Colin Challen: Talking about infrastructure, how important are new high-speed rail links to reducing our carbon emissions? Mr Lyons: I think I have got an even bigger issue. We have seen across Western Europe some 2,000 miles of high-speed line has been built in the last 20, 30 years or so. Another 1,000 is actually effectively under construction or at the very advanced stages of planning and all we have managed to build is about 70 miles of that total. We have seen huge benefits in economic terms and social terms and in environmental terms in comparison with short-haul air with the introduction of these lines and I think it is a key issue which we in Britain must address. Even if we do not want to go ahead with high-speed lines, we ought to understand why we do not and what the alternatives are, and at this stage I do not believe the alternatives are at all palatable, which is that it means increasing short-haul air operation in this country to levels which I think would become completely unsustainable and just building more and more motorways or allowing the present motorways to run over capacity. So high speed lines meet, I think, the full sustainable development triple bottom line, that you build them and you do see significant advantages in the country. Ms Shaw: Given the size of this country, we really ought not to have short-haul airlines, frankly. Q306 Colin Challen: Would you prefer to see domestic flights taxed more heavily so that that would encourage the modal shift which everybody wants? Mr Lyons: Of course, I think railways should offer such a competitive product that you would not want to travel by short-haul air, and actually that is already happening. Places where short-haul air flourishes is because the railways were not, quite frankly, delivering the service. A good example was the link London to Manchester and with the West Coast mainline and the chaos which was, quite frankly, evident on the line in the last two or three years. We have now seen that the line has been restored back to a reasonable service and an immense shift back from short-haul air is already occurring. It has gone up almost 60 per cent as the market has moved around. I always think modes of transport should present themselves as attractive and good value and not worry about trying to pick off the others, because I think that is not intrinsically, in my view, the way any business should go. It should be confident in itself. Ms Shaw: Yes. The Eurostar is another beautiful example. There is no London to Brussels air market any more, and similarly London to Paris, which is a little further and therefore takes further time on the train, is a very much smaller air market than it ever was before Eurostar came out. Q307 Colin Challen: Could we just have a quick look at the demise of Motorail? Thirty years ago, you could go into most corners of the UK taking your car with you on the train. The last service, I think, was to Penzance last year which was closed. What was the cause of that demise? Mr Lyons: I think, regrettably, it was the expansion of a motorway and good trunk road scheme which significantly shrunk Britain from the road point of view. The heyday of Motorail was when it took almost a day's journey to go from London to Penzance, if not longer; it was a two day one. The road system has been significantly improved down to the South West. It meant that that market largely disappeared. I do not think in British terms the Motorail concept looks like a particularly commercially operational place for railways to go. There is much more interest, I think, in exploiting the Intercity market, also serving out to airports as well, rather than looking at just trying to substitute car mileage in a Motorail format. To be honest, I do not see it coming back in any great form. Colin Challen: It had something to do with the demise of British Leyland over the same period, obviously. Cars are more reliable now! Q308 Chairman: Can I just take you back for a second to the comparison between flying and the trains, because you say you would like the railways to compete effectively, but you did say offering good value. Is it not the case that if you book a very small time in advance you can fly on what is effectively an ordinary scheduled flight from London to Scotland at a fraction of the full price and that therefore it is very hard for railways at the present to compete because you can get a £20, £30 flight from London to Glasgow or London to Edinburgh, and therefore some soft of taxation on domestic flying would surely be part of the process of enabling you to offer better value? Ms Shaw: If a realistic understanding of what goes into the costs structure of an air fare was more publicly known I think it would raise the consciousness that there is no level playing field between road and rail, so the price structure which an airline can operate is inevitably lower just on the basis of fixed costs. Equally, having said that, I could go to the GNER website this afternoon and book you a fare between London and Edinburgh for £25 return by doing the same as going onto the British Airways website and booking in advance. Travelling on an off-peak service I could get you that fare. Mr Lyons: Chairman, clearly the railways are very interesting because of course everybody who uses short-haul air finds using the internet is the absolute way to buy tickets. They are very clear websites with very sophisticated new management systems, but I think with rail people have probably a more varied view of how they are going to get and access a ticket on the train and it is clear we are going to have to move to systems, particularly with Intercity travel, which look more like the short-haul air ones because I think they are the ones where we can sell attractive fares to passengers. That is already happening. Ms Shaw: Yes, the improvements in the IT systems, the National Rail Inquiries timetable service and the ticket booking services which the train operators now use has led to a significant increase in business over the internet, with people collecting tickets when they appear at the station rather than turning up at a ticket office and waiting in line to buy a ticket. It has enabled the railways to expand on their off-peak business particularly. But we also have to deal with the situation where people will want to buy a season ticket or want to travel at particular hours and the services which go with season ticket holders have also increased from the train operators over the last few years to the point where they are offering their season ticket holders a better service, not just in terms of the quality of the trains but also the advantages which go with being a season ticket holder, and that has increased the volume of season ticket sales too. Q309 David Howarth: I cannot say I have noticed on the 6.15 to Cambridge, but never mind! Mr Lyons: It is one of the most saturated - Q310 David Howarth: It is. You have to turn up the day before to get a seat! Can we go briefly back to freight? Could I just ask you first whether your comments about the Department's priorities and putting other factors well above climate change also applied to the attitude towards freight? There are enormous advantages of shifting freight from road to rail. Is the same low priority from the Department apparent in that area as well? Mr Lyons: I would not say it is a low priority as such. The problem has been the issue of capacity. That is the first thing. The network in so many areas is so relatively heavily used that putting additional capacity in and guaranteeing the service which a modern supply chain wants - and that is absolutely critical with things like containers; you cannot let it take two days when it will go by road in 12 hours - so at present, to be honest, I think the Department has largely said to the freight side of rail, "Here is a number of ways we can facilitate the way you can grow the business, but in practice you are going to be constrained by the amount of capacity on the network." There are clearly ways we can squeeze more out of it and Network Rail is working very closely with the freight operators and with the passenger operators to see what else it can get onto the network, but it does not alter the basic problem that any really significant shift is going to require some new capacity. You cannot squeeze much more on, and it is no good going to people and saying to them, "Yes, we can guarantee you two or three freight deliveries a day," when basically you cannot and I think very often it has just been the constraints of the infrastructure which has stopped growth. There is clearly much more demand than there is traffic, but even then, of course, traffic on the railways, particularly with things such as aggregates and minerals, has soared. It has never been at these levels for 20, 30 years, but you can see it is producing some very significant strains on the network to maintain those levels of service. Q311 David Howarth: One of the suggestions which has been made to us by Freight on Rail is to do with land and planning, so one possible way of making sure there is more capacity in the future is for there to be a national strategy about rail freight and for that to be built into regional and local planning decisions. Do you think that would be a good idea, and if so, what needs to be in the strategy? Mr Lyons: I think it would be a good idea if all rail expansion, including things such as high-speed alignment should get in. I always say, look how the motorway system grew up. It was put in by planners in the early 1950s and we suddenly found by 1970 we had got 1,000 miles of motorway because it had been in the planning process and because we have very little of this in national and regional planning structures at present means that a lot of stuff goes by default. What should be in it? Clearly there are two absolute priorities where rail freight is right at the head of the field. One is that it is the obvious way to move heavy, bulky, low-value traffic such as aggregates and minerals. It is crazy to even think about road for them, and making sure that that is facilitated must be a priority. The second one is moving containers from ports to inland ports or sites for it to be cross-loaded. Clearly that must also feature because that system could make our ports operate so much more efficiently and also save a considerable amount of road journeys across Britain. So there are those two elements. Then you have the remaining areas where other supply chain activities can be built in, and I think you just have to look at them on a case by case basis. A large industrial engineering complex may have significant advantage if it is rail served but at present cannot be because it is too far away from a rail head, and we ought to be looking at those, but I think those are ones where there is no hard and dry rule for this and you need to look at it on a case by case basis. Q312 David Howarth: So what are the main factors on the demand side when companies are deciding whether to use road or rail for their freight? Obviously cost is a big factor, but you are also talking about other supply chain problems. What goes through their heads? Mr Lyons: Cost and reliability are the two drivers for any supply chain operator. Is the supply chain going to do what it says on the packet? It is going to deliver in so many hours, days, whatever it is? Is it going to deliver in the right quality? Then finally, cost. Clearly we have got to look particularly at certainly the more sophisticated supply chain interaction between rail, road, ports, airports, to make them the slickest process. If you get transfer costs wrong between modes, you can add very significantly to the cost and time of the business. If you get it designed right, you can bring costs down very significantly. That is where all this excitement about piggy-back trailers and things on rail comes up. But I would stress that particularly when you get to supply chain solutions there is literally a huge range possible and to have a single set of parameters I think would be wrong. You have got to work with your customers and you have got to work inter-modally. You have got to see what roads, ports and air are going to be doing as well to produce that integrated supply chain which businesses want. Q313 David Howarth: What about the soft effect, the public relations advantages for companies of being seen to operate in an environmentally friendly way? Do you think that is being pushed enough, that companies could use the fact that they are using rail freight as something to attract customers? Mr Lyons: I think it is becoming evident already. It is clear that if you have got a ten per cent factor probably on road freight - again you have got to compare loads, but you are talking of a 15:1 advantage in emissions, and I think under social responsibility reporting, which companies now do, they are becoming very keen on this. This is a story they want to tell and they are looking for options. I think too often they are thwarted. They do come to the railway industry and find we just have not got the capacity to help them. Again, I think we should be looking at this because it should be part of the national sustainable development strategy. Incidentally, I would welcome a national freight supply chain strategy. I think it would be extremely useful. Q314 David Howarth: One final point. You mentioned the fall in financial support for freight. I think the figures are that in 2001-2002 £61.1 million came directly from Government and that fell to £28.5 million in 2004/5 and that is set to decline further. Could you just set out for us why you think that is happening, why the Government is doing that, and what the effects of it are? Mr Lyons: I cannot exactly quote figures, I will have to check them, but there has been a decline. I think the major area has been the freight facilities grant, which was to pay for expansion of the infrastructure to cope with it. It was cut at short notice by the SRA when it ran out of money some time ago and it is being reinstated. I think the Government support is going up, but I do think the problem - and we come back to this issue - is that there is almost a limit of what can be taken out because the network cannot take that expansion which actually many of our customers would like to see. Q315 Mr Hurd: Could I ask you about a push towards driving greater freight by rail, how it goes with the grain of trends in the management of stock and distribution and modern business practice? I am thinking here of the culture of just in time and the fragmentation of distribution. Why go through all the bother of freight rail when basically you can use British motorways as your warehousing capacity, which other people pay for? Mr Lyons: The first reality is that very few things are manufactured in Britain which are manufactured from things entirely sourced in Britain. There is a huge amount of component exchange running with other countries, both in the European Union and further afield, and we have seen this huge explosion in container traffic, for instance, which has been mirrored by major expansion at Felixstowe, Thames Haven, and so on and so forth. Yes, I fully agree, the general rule of thumb for non-aggregates, minerals traffic under about 150 kilometres is basically unless you have got some very, very sophisticated rail interaction with your production system, probably road looks pretty good. But the further you get, if you are moving something from, say, Milan to Middlesbrough and you can do it fast by rail, it makes a lot more sense than moving it by air cargo or by road, and even the operators would agree with this. They do not want to man a truck over these huge distances because that costs them real money. It is much cheaper to put it on a train and let the train take the strain for those long journeys. At the far end, you then go into modal transfer for the short-haul. Ms Shaw: There is some scope there. There has been some willingness from supermarket operators, for example, to operate from their bases in the south of Scotland, Glasgow in particular, to take pre-packaged truck loads of food, produce, up to the north-east of Scotland, to Inverness in particular, rather than using the main trunk routes through the Highlands. So it is not that the unwillingness is there, it is just that there is a number of other constraints which perhaps collectively, if one were to start knocking them out, one would find that this would happen more. Q316 Chairman: On a different dimension, one of the things which always mystifies me is that large numbers of lorries arrive on a train through the Channel Tunnel to Folkestone and then get off onto some of the most crowded sections of motorway to go around London and head for the Midlands and the North. On the face of it, that is ridiculous, but the scheme to try and promote a privately funded piggy-back railway beyond this crowded area of the South East has not worked. What has gone wrong there? Ms Shaw: Clearly, a scheme like that can take a very, very long time to develop. Along the line of route there would be a deal of time to acquire the land, which has been used for other things, and get the route clearance through. There is also a great deal of capital investment involved in setting up a dedicated freight line and I think the consensus at the moment across Europe is that actually the railway undertakings which exist do not think that a dedicated network for freight actually will pay its own way. They would prefer to optimise some routes more for freight then they do presently for passenger. That is a more cost-effective way of managing it than a dedicated freight network as such. I think there were some difficulties specifically within that project which began to surface towards the latter stages when it was coming up towards a Parliamentary bill stage. It is not inconceivable that something like that could be resurrected with some changes in direction or different sources of financing, for example, which might enable it to happen, but by way of comment, when the Channel Tunnel rail link is opened there will be a significant opportunity to increase the amount of freight which gets on the rails the other side of the Channel and stays on the rails this side of the Channel coming up towards London, purely because we will have a more Continental size loading gauge between the Channel Tunnel and the east of London, and then potentially further up if Crossrail gets extended out to the kind of scope we would like to see. We have a sweet irony in this country that we have the biggest lorry loading gauge and the smallest railway loading gauge, and if we were to go about correcting some of that we might claw back some of the traffic which presently goes on large lorries. Q317 Mr Caton: Accepting what you have already said about the relatively low level of carbon emissions coming from the railways, can we look at whether it is possible to reduce carbon emissions from our trains? The Climate Change Programme Review said that: "The Government will consider how new technologies can improve energy efficiency and reduce fuel consumption to get even more environmental benefits from rail." What is the Government doing, apart from doing the considering which it has told us it is doing? Ms Shaw: We fully expect to see a reflection of that kind of question in the technical strategy when it comes out. Certainly a move to some new technologies in the form of hybrid traction shows some promise for reducing emissions, particularly from diesel trains. The emissions from electric trains at the point of use are already pretty close to zero. If one were to increase the mix of renewable power going into the electrical traction supply, then clearly that would also reduce the emissions on a more global scale for trains. So we would expect to see some more concrete comment and planning on either furthering the electrification network using conventional National Grid supply, connected supplies, or alternatively exploring things like micro-generation at line side or at stations to further boost the supply or create a new supply where there is not one at present on the electrification front. Q318 Mr Caton: This is a two-part question. Can you tell us how much is likely to be achieved by 2010, which is the focus of the Climate Change Programme, but also from what you have just said, Ms Shaw, it sounds like there is a debate going on about what is the best way forward? The clear options seem to be going head-on for electrification, or secondly looking for these new technologies you mentioned, or presumably something in between. Can you give us an idea of the pros and cons of the different approaches? Ms Shaw: To take your first question, by 2010, that is three and a half years away, in realistic procurement terms I would not expect to see any significant move to incorporate new technology on a wide scale on trains. I would expect by then we might see some applications for hybrid locomotives, particularly where they have almost no applications such as shunting locomotives, for example. I would not expect to see them on multiple unit-type trains, or even regular locomotive or high-speed type trains simply because there is not the scale of power unit available that would work in a high-speed or freight train that we know we could actually put into something that would fit in our size of hole. We have looked a lot at some of the American technologies that are available. Even the American railroads, as big as they are, they are only tinkering with these hybrid technologies at the moment and they have a lot bigger space for their locomotives to put all these bits and pieces inside the locomotive that one needs. Mr Lyons: There are two issues by 2010 which I think you can see very significant advances on. One is the eventual switch to low sulphur fuels on the railway. We have to meet a target actually by 2009 with the new non-road mobile machinery standards. Secondly, of course, the move to brake regeneration on electric trains, which has already started on the West Coast mainline and on the East Anglian lines, could well spread to the DC line south of the Thames, which again would bring significant power savings. I think the high-speed train debate, the HST2 specification, which is actually calling for a range of power technologies of a train set which can be built which can either switch currently from diesel to electric, or some sort of hybrid, will not necessarily produce anything more than a prototype but it will at least begin to focus the debate on where railway power goes in Britain over the next 20 to 30 years. Q319 Mr Caton: I think you, Mr Lyons, said in your submission that the Department has not yet addressed these questions? Mr Lyons: Yes. In fact we did draft this before the Secretary of State made his announcement about the technical strategy and, although we probably all unofficially knew a technical strategy was beginning to emerge, I think, to be blunt, we were trying to put some pressure on this because these questions are very important for the industry. We are pleased to see in the specifications for the HST these big questions being asked technically and we hope the technical strategy puts this in context. Of course, the other remaining issue we have not discussed is where does hydrogen power fit into this mix? Does it have a future or not? In some ways it looks very attractive for rail, in others you could argue that electrification provides many of the advantages that hydrogen will given for other modes of transport, but again there needs to be a big debate about this and it needs to be set in the context of a national power debate as well. Railways even today use something like one to two per cent of the total grid output. If you go on expanding the railways, is the National Grid going to be up to it, or are there going to be Louise's micro-generation type solutions? It is not just the railway industry here. We have got a set of demands, but we need to see what the national context is and very often when we are planning for the future we find we have not got doors we can open because the issues have not really been fully explored. Q320 Joan Walley: Mr Lyons, I think you touched on my question really, and it goes back to the Non-Road Mobile Machinery Directive and in a way the way in which the introduction of that Directive is perhaps at odds with the whole technical issue about improved air quality and how we go about reducing emissions from diesel trains. You mentioned the debate which there needs to be had. How are the Department for Transport or Defra, or both of them acting together, going to be given the lead to the technical solutions which are now being forced through by climate change? Mr Lyons: I think Louise is right in the middle of the NRMMD debate. Ms Shaw: Since the Non-Road Mobile Machinery Directive came into force we have been working with particular individuals at DfT to try to work out firstly the effects on the emissions from typical rail engines and also having to take into account the fuel changes coming up as well, and they are taking particular care to understand all the effects this is going to have on the operations of the rail operator, whether it is going to effectively require more fuel to achieve the same output from the train, whether it is actually going to improve the air quality or whether indirectly by improving emissions from one particular direction you are actually going to drive up the emissions of CO2. I credit the Department for actually taking the whole thing with NRMM as seriously as they have done. Where we have met difficulties is with Treasury. It looks like we will be paying an increased amount of tax for the rail traction fuel because the ultra low sulphur diesel is effectively a road fuel rather than a gas oil, as we use presently. So the base fuel costs could well go up and that is possibly as big or bigger an effect of the Non-Road Mobile Machinery Directive than the other effects which could come up. Mr Lyons: We would argue very strongly against any perverse incentives here. It is a very small fleet of diesels that runs the railway. There are less than 4,000 prime movers compared with tens of millions of vehicles and getting these solutions right on this very small fleet is very important. The other point, of course, about non-road mobile machinery is, I think, a philosophical point which the Railway Forum has, which is that it really shows us the limit we are reaching on the diesel. There is a point now coming where suppression of emissions, either by treatment inside the engine or post-treatment, and engine efficiency are beginning to come into conflict now and we are going to have to think very seriously where the diesel on the train goes over the next 10 to 15 years. There would be significant advantages in having a power unit which has lost power but is actually controlling emissions better but more expensive to run, rather than the advantage we have at present, and these of course are the debates which get into the electrification argument and on hydrogen power as well, which I think shows in some ways we are at a cross-roads and luckily I think we have now got a Department for Transport which recognises we are. Q321 Joan Walley: What I really wanted to cut through to was whether or not it is a question for the Department for Transport or for Defra, or as you suggested, the Treasury in terms of other perverse incentives. It is just that I do not understand, sitting here, which department is calling the tune, how these conflicting issues perhaps waiting for new environmental technologies to come through are being resolved, and the incentivisation is being driven from within Government. Is it the green ministers who are trying to sort of thrash out these unresolved conflicts? I do not understand how this is being squared. Mr Lyons: I could throw in two other groups, of course. There is the Department for Trade and Industry and of course our own Regulator is also involved in this. Q322 Joan Walley: Has he had anything to say on this? Mr Lyons: He recognises that he has not taken sufficient awareness of the sustainable development arguments in what he has been doing. Of course, we do come from this period when the railway has been extraordinarily focused on cost and performance issues and it is only now that we have reached a period of stability that the groups, if you like the Regulator and the Rail Group and the defendant, are beginning to look at these long term strategic issues which we must address as an industry. Q323 Joan Walley: I am just wondering if there is any further information you have on that, because in a similar inquiry this Committee has carried out we had a very similar situation arising in respect of the energy industry, in respect of the difficulties we had in getting the Regulator there to take sustainable development into account. If you are suggesting that there is a similar issue now in relation to transport and the railways - Mr Lyons: Yes. Q324 Joan Walley: Is there any correspondence or anything with the Regulator which could perhaps illuminate or cast some light on this for us as to how it is preventing the development you are looking for? Mr Lyons: I think our relationship is slightly less confrontational than, say, the energy industry one, but I think we have still to draw the threads together in Whitehall. There is relatively little correspondence, but I think we could easily provide you with a brief, if you wanted us to, on where the situation is now and what the views of the various Government departments are and our Regulator in respect of the switch to MRMM. Joan Walley: I think that would be helpful to us. Q325 Colin Challen: Under the current contractual arrangements, it is not possible for train operating companies to purchase green electricity. Why is that? Ms Shaw: The electricity for traction is procured by Network Rail for the train operators and I think if we were to try to procure the electricity on a train operator basis we would lose an amount of leverage that we have, given the size of what Network Rail purchase. We would be quite amenable to having Network Rail increase the amount of green electricity in their procurement mix very happily. The one proviso would be that we would not want any perverse incentives of the traction charge to go up as a result of doing so. Q326 Colin Challen: Could you just explain. There is not a sort of statutory or other problem with that, it is purely a contractual issue? Ms Shaw: It is a contractual issue through the regulators. Mr Lyons: I think clearly one would assume that any move to a renewable electricity sourcing would actually potentially increase cost. Q327 Joan Walley: In regard to the sustainable development policy, is it? Mr Lyons: Yes. We require the Regulator to have a view. If Network Rail come to the Regulator and said, "Look, I would like to get from my current mix where I go for the cheapest option I can buy," which is clearly energy sourced from nuclear, which seems to be the main source that Network Rail is using, "but I would like to have a greener mix as well for other sources. It is going to, however, increase my energy costs by such-and-such. Are you, the Regulator, going to be happy with this?" I think there would have to be a decision made on that basis. Q328 Colin Challen: Obviously costs are clearly very important, but obviously if there was more green energy it might come down in price anyway? Mr Lyons: I think that would be another advantage as well. Q329 Colin Challen: Is it not something that really train operators particularly ought to be, if not campaigning for then arguing for, to try and boost not only their green credentials themselves but in future to reduce carbon emissions? Ms Shaw: I think you will find many of the operators already do so in their discussions at a high level with Network Rail. Going back to what I said earlier about the corporate social responsibility of people like First Group and National Express, I shall be very surprised if that sort of subject is not a topic of conversation between the chief executives as it is. Q330 Colin Challen: Are there any reliable ways of reducing the cost of electrifying the network? I can quote an example. I believe the East Coast electrification tried to reduce the cost by employing cheaper wires, which now cause enormous problems. Are there any ways in which it can be reliably reduced? Ms Shaw: I think that is a slightly unkind description of it. The East Coast mainline was very carefully examined from an engineering point of view to find the most cost-effective system. Yes, there are some spots where it has problems and Network Rail are working on increasing the reliability of those particular spots. Having said that, to go back to what I said earlier about the signalling systems, there is a technical standardisation programme ongoing throughout Europe which is rigorously examining the costs of an electrification system and will produce a standard specification which the large suppliers, the likes of Siemens and Balfour Beatty, can sell across the whole of Europe, but also being designed from the point of the railway, the infrastructure managers, so that they have a much clearer understanding of just which bits cost what, and to bring down the cost of electrification equipment through the means of standardisation and also by not having to demonstrate the compatibility between different trains across different networks to bring the railway in and to take these costs down that way. It is difficult to give you a figure of how much that would bring costs down, but clearly there is a balance between slightly beefier equipment such as you might see in France and Germany which costs a little more on the first cost but which actually over the lifetime lasts much better, it is more reliable, it does not have problems in severe weather, and the kind of lightweight equipment which we have in the UK which had a lower capital cost but which has perhaps more of a maintenance cost and a reliability cost and somewhere there is a balance to be struck and I am confident we will discover that balance. Q331 Colin Challen: Yes, we have a tendency to always go for the lower early capital costs in this country. Is that not what we always do in the end? Ms Shaw: It seems so. Mr Lyons: I think we have learned a number of lessons from this and Network Rail are now in their business plan fully committed to the whole life cost approach to management of their assets. The idea that you start cheap and then pile on costs later is bound to have significant problems. So things have moved on. Network Rail clearly are strenuously committed to bringing down costs, but the prices which has been quoted in recent years for electrification projects were quite frankly unsustainable and they are re-working a number of them. There are some small-scale schemes currently under consideration and there are some test beds for whether you can manage these projects a lot cheaper. But one thing I must come back to, and we have hit this a number of times with electrification schemes, particularly when we upgraded the DC line south of the Thames to the new bigger, heavier trains, that actually the National Grid in itself has got significant capacity constraints and quite a lot of the costs of electrification seem to lie with the National Grid to beef up their system to allow sufficient power to get to the railway power lines. So it is not just a railway issue, it is part of the national power supply one which we have got to address and consider the significant costs which might arise if we have to expand that. Q332 Colin Challen: Is that something you have had the chance to input into the Energy Review which has recently been completed? Mr Lyons: Yes, we did, and our submissions to Defra came back to some of it. The railways have been here for 200 years and they are going to be here for another 200 years at least. We make long-term decisions every day in an industry and we have got to do it in a strategic context and we have got to do it in a very wide strategic context too. Q333 Mr Caton: Following on from that, can we look at reducing revenue costs and also carbon emissions by capital investment in regenerative braking. Mr Lyons, you said in your memo that 50 per cent of the electric trains currently in service are capable of using regenerative braking, which would mean up to 20 per cent reduction in the use of electricity but very few actually use it. Why is this? Mr Lyons: An increasing number are using it in fact on the West Coast and certainly in East Anglia they are. The main area where a move to regenerative braking would bring significant advantages is on lines south of the Thames. There are some issues with DC electricity, a lot of technical ones about putting power back into the rails, which is slightly different from doing it with overhead AC lines. It does require some modification of the DC system. It is going to cost money to make sure a safe, reliable regenerative structure is put in place and the debate is now on with Network Rail to introduce that. Again, interestingly, because sustainable development was not at the top of the agenda this was an issue which was not looked at two or three years ago in any great detail. Now, of course, we are getting into more stable times when the sheer pressures of work on the network are beginning to ebb a bit and you can now look at putting regenerative braking in, and I think we will see some quite significant moves in the next few months over this. It is probably in electric train operation terms the single biggest step you can take to save energy. Ms Shaw: Yes, it is a win, win situation for both the infrastructure manager and the train operators in that if you use regenerated electricity it produces much less wear on the trains themselves, so it saves money that way, but also it has the benefit that if you are regenerating power back into your supply line you do not have to put in quite so many transformer stations or generation points as you would do if you did not regenerate, because the trains themselves are putting electricity back on the line so therefore they are supplying themselves. So it is almost a win, win, win situation with regenerative braking. To be fair to Network Rail, the standard equipment they are putting in now does permit regenerative braking to take place, but there was the problem with the power upgrade. It was done at such a speed and with the focus that it just did not happen. Q334 Mr Caton: You say the debate is on now in Network Rail. Is the right message coming from the Department for Transport on this? Ms Shaw: Yes, very firmly. Mr Lyons: Yes, and the Regulator as well. It is clear that the advantages are so significant that this must be an issue which is to be taken forward. Ms Shaw: Yes. Chairman: Thank you very much indeed. We have kept you rather a long time, I am afraid. We have covered a lot of very useful ground from our point of view and we are very grateful to you for coming in. Memorandum submitted by Sea and Water Examination of Witnesses
Witnesses: Ms Heather Leggate, Vice-Chair, Sea and Water, and Mr David Lapthorn, former Chairman, Lapthorn Shipping Limited, gave evidence. Q335 Chairman: Good afternoon and welcome. I apologise for keeping you well over time, but there was a number of issues which colleagues wanted to follow up. By way of general introduction, would you like to say what you think the role of water freight is or can be in helping Britain meet its targets for reducing carbon emissions? Ms Leggate: The various studies show that the carbon emissions from water freight transport is substantially less than road, and indeed rail. Depending on the studies you look at, we can see that in terms of inland shipping and coastal shipping carbon dioxide emissions are about 63 per cent less than road and about 25 per cent less than rail. There is actually a study by the Royal Commission on Environmental Pollution which demonstrated even higher percentages. So in terms of carbon emissions, water freight is a very effective form of transport and a lot of the infrastructure is already in place, so it is not a question of new technology, it is already there. Q336 Chairman: Were you disappointed that the Climate Change Programme Review did not refer to the potential of shifting freight from road to water? Ms Leggate: We are always disappointed to be forgotten. Q337 Chairman: Why do you think that was? Given from what you have said there is an obvious agenda, why do you think they ignored it? Ms Leggate: I think generally water freight does not get very much attention at all and it is something which is not even thought about. I was listening to the evidence given just now and water was not even mentioned and I am really quite shocked about that, because in terms of our organisation, Sea and Water, we are actually quite happy to promote rail as well as water. There is talk about ports, but I think we should also talk about the potential for coastal and inland shipping in any freight transport strategy. Q338 Chairman: What do you think the keys are to shifting freight from road to water? Ms Leggate: What do we need to achieve it? Q339 Chairman: Yes, what policies, instruments? Ms Leggate: I think there are various things. One is trying to streamline the planning process which does not allow for easy development of ports and waterside facilities, so I think a lot needs to be done in that area. There is also the issue that in terms of competing with road transport there is not this level playing field that everybody talks about because road users do not pay the true cost in terms of externalities, and in certain areas that means it is quite hard for some shipping operators to compete with their own transport. I think that is an area which needs addressing and will presumably be addressed when road pricing actually comes in. Thirdly, there needs to be some investment in the infrastructure, particularly as far as inland waterways are concerned, and it is actually not very much in terms of money. One good example is for the Olympic Games and we have been pushing quite hard for water to be used for transporting to construction sites and actually servicing those construction sites, but actually there needs to be some investment in the waterways in certain locks, which is relatively small, round about 10 to £15 million. It is very difficult to get people to take that decision, although the construction companies themselves are very keen to use water in that instance and are prepared to invest in new vessels in order to do that. Estimates by British Waterways show that that sort of initiative, using the waterways to service the construction sites, could take half a million lorries off London's roads. We are finding it difficult to get people to take those decisions. In fact the planning permission was given on the basis of road transportation, which does not help. Q340 Joan Walley: If I may, I would just like to pursue that a little bit further. I cannot help being reminded of a time many years ago when I was a shadow shipping minister and people would say to me, "Well, coming from Stoke-on-Trent, what is the connection with shipping?" Ms Leggate: I do, in fact. Yes, "What do you know about shipping?" Q341 Joan Walley: Of course, my answer was that in the nineteenth century we had an industry, which was the pottery industry, which we took out from Stoke-on-Trent to the four corners of the world via, of course, the Trent Mersey, and obviously we still have Port Vale Football Club flying the flag, if you like, for ports there. Can I just say that I think one of the issues about the role of the inland waterways and about shipping, despite the fact that we are an island nation, really there is not the public perception, I do not think, about the role and the contribution and in a way I think the creation of your organisation following the 2002 report, and so on, is perhaps one step forward, but do you think there is enough perception about your organisation and your role? Is not part of it to move up the political agenda, to be able to get the train operating companies to be talking across modal streams, ports, waterways? Ms Leggate: Yes. Q342 Joan Walley: But part of it has got to be an understanding in the public's perception of ports and the whole way that connects with the integrated transport strategy? Ms Leggate: Yes, absolutely. I totally agree with that and as an organisation this is what we are trying to do now. Q343 Joan Walley: How are you doing that? Ms Leggate: We are trying to communicate on numerous levels, partly with policy-makers across all the departments. Q344 Joan Walley: How is that coming across to the public's perception of the contribution you can make. Ms Leggate: At the moment, it is not very much. It is something which we need to push quite hard because freight is not very attractive really in terms of public perception, but I think things which are and things we are trying to push quite hard are the environmental benefits, and I think the public are becoming increasingly aware of those. When we look at water freight transport we are then looking at greener issues and people are becoming more aware of those, and that is something we are pushing quite hard. We are also trying to push on a corporate level with companies now becoming more involved with corporate and social responsibility agendas, for example Tesco announcing the £100 million on environmental issues. We have actually written to Tesco to suggest that part of that could be looking at green supply chains. An area which needs to be developed is the area of waste management and lots of companies could actually use water as part of their waste management systems. Mr Lapthorn: If I could go back to the public's perception, I have spent far too long, 30 years or so, trying to persuade MPs and others with more influence than I that probably the best way to influence the public is for those MPs and so on to simply admit that we are an island and that their shipping ministers are ministers for road, rail, air and sea. There are very few (and there has been quite a lot of them) who have admitted publicly to being minister for sea. Yes, we are an island nation, but people will look out here and say, "Oh, isn't that nice?" as commercial vessels go up and down, but the only time the headline is made is when something goes wrong. That is the best way, in my mind, not to dish out subsidies and all these sorts of things - I shall get shot for that! - but for the politicians and decision-makers to accept that here is a real sustainable alternative to sitting on the M25 coughing and spluttering behind a lorry. Q345 Colin Challen: The Government has decided to amalgamate the grants for rail with water into a single pot, which is a smaller pot than the previous two pots. What do you think the Department's thinking was on that and what will be the impact of it, do you think? Ms Leggate: I think they are thinking about money, but it will have an impact and we are quite concerned because, as I said earlier, until road pricing comes in, on a number of levels it is very hard for water freight operators to compete with road, so it is quite disappointing. Q346 Colin Challen: What kind of figures are we talking about in terms of water previously, in terms of grants? Ms Leggate: In terms of the grants, not very many millions - Mr Lapthorn: £9 million. Ms Leggate: -- nine, £10 million. Mr Lapthorn: Generally speaking, certainly recently it has taken up to such an extent that there was borrowing from the following year to make the numbers fit in the previous year. Q347 Colin Challen: Do you feel with the single pot approach that the rail lobby will squeeze you out even more? Ms Leggate: Yes. Mr Lapthorn: Yes, because the greater impact rests with rail and we as an industry, as a general remark, live and die by our own sword. Rail, I feel, does not. That is my personal view. Q348 Dr Turner: Your memo calls for the Government to introduce a system of road pricing on the basis that road haulage does not pay its full external cost to society. What form of road pricing would you like to see introduced, and what do you think the Department feels about this? Ms Leggate: I think the Department is a bit cross that we have raised it, actually. I have had discussions with the Department about it and they acknowledge that road pricing in some form is inevitable and we know people are working on that within the Department. Obviously the technicalities are to be worked out and I would not like to say what form it should take, except to say that it should involve road users actually paying more towards the true cost of that road use so that other modes can compete. Q349 Dr Turner: Do you have any practical suggestions, so much a tonne, or on the size of the vehicle, or on the vehicle excise duty? Ms Leggate: Pence per mile. Mr Lapthorn: We are not going to sit here and say we can get rid of every lorry, because clearly there is not much water between here and Liverpool in a straight line, but what we want to do is to reduce the traffic on that straight line by using the waterway, which is free, at least as far as the main bulk of it is concerned. In my view, it comes down to pence per mile or kilometre, that sort of concept. Ms Leggate: It is going to be very complicated, is it not, and obviously you need to take into account regional congestion and that kind of thing, but actually the Department in terms of pricing and how much heavy goods vehicles do not contribute to calculations which the Department has actually produced, that the heavy goods vehicle fails to cover its costs to the tune of about 51 pence per mile, of which 2.5 is on climate change and 6 on other pollutants. They have done those calculations. Q350 Dr Turner: If you were to be successful in getting a significant amount of freight off the roads, how would you deal with it in terms of shipping capacity? You would have to make some investment to get it to rail and water. Mr Lapthorn: If it is done immediately, the problems are not too great. What we see is an accelerating rate of closure and change of use for waterside facilities, this river being a prime example. In our organisation, myself in particular, we deal with the smaller end. We are not talking of the odd 100,000 tonne bulkers, I will not put a limit on it, but let us say 10,000 downwards, and certainly inland 1,000 downwards. The facilities are there, but they are on their way out very quickly. In the Medway we have lost five wharves in the last four or five years because of the quest for regeneration, for housing, et cetera, and the consequence is you end up with a concentration on the larger ports and the natural process then seems to be, "Okay, from the larger port we'll stick it on the road and rail and off we go," and forget the largish number of small ships there are around to service the many small ports and facilities between those hubs. In very short order not only are the facilities going to disappear but the small ships as well, and in pure economic terms based upon the current market - and when I say that, that is probably 20 years - the sums just do not add up. So the size of ship has gone up, making the very small places less accessible and less viable, and the returns on the 1,000, 2,000 tonner that will go to most of these places just do not exist because the rates do not pay the bill. Q351 Dr Turner: It is a shame. I would like to see the sailing barge come back. Mr Lapthorn: Been there and done it! Ms Leggate: Having said that, though, in terms of coastal shipping the infrastructure is there. There is nothing to prevent the coastal routes and there are 300 commercial ports in the UK, so coastal routes could be used and there is not really any sort of capacity restrictions on that at all. In terms of the European short sea fleet, you have got something like over 2,000 vessels of 10,000 deadweight tonnes or less. So you have got quite a considerable capacity there for coastal shipping. Q352 Dr Turner: What sort of scale of investment do you think would be needed to make it sustainable for the future? Mr Lapthorn: It is almost a "name your figure", but my belief, as a ship owner, is that you have to have a number of ships which enable your customer to feel confident that he can always get his ship, he can always get his continuity of supply. Your starting figure is two to three million pounds per new vessel, but once there it is there for 20 or 30 years and the level of regeneration at the moment is almost insignificant; it is just not happening at the smaller end. Q353 Dr Turner: What do you think could make it happen? Mr Lapthorn: Increased income, for want of a better expression. We have what I would describe as a pure market, little or no subsidy, little or no assistance, certainly nothing direct, and we are competing directly with road and rail and certainly road and probably rail are not paying their full cost. We are paying our full cost and it is not enough. Q354 Dr Turner: If they did, it would then make you commercially attractive? Mr Lapthorn: Oh, yes. Q355 Joan Walley: I just want to explore some of these in a little bit more detail, if I may. I really wanted to start off by asking you, you mention in the submission which you gave to the Committee that you have called on the Department for Transport to take on board some of the credit risk of water freight operators to enable them to make investments. I just wondered what specifically you had asked for and what specific response you had had back? Ms Leggate: We have not had any response. It is something which we have very recently done and the difficulty in getting the finance is something which for smaller operators prevents them from actually investing in new vessels. Q356 Joan Walley: You say you have had no response, but what have you had no response to? Ms Leggate: It is part of a policy document we have just brought out called "The Case for Water" and the Department has made it clear that it is going to officially respond to this document and that is a part of that document. Q357 Joan Walley: In that request for specific support which you have asked for, does it include things like loan guarantees, which presumably are available across other business sectors? Are you looking at what is already available to help? Are there schemes like that which you are looking at as well? Mr Lapthorn: The old section 10, 1972 Industry Act gave us loan guarantees for new ships. That expired some years ago and given that the rate of interest was 7.5 per cent fixed, as market rates went down below that, so the uptake of that was reduced anyway, but certainly the experience of that sort of departmental guarantee was really quite onerous and one ended up with something of the order of 200 per cent cover required. So there was not a great incentive to go rushing out to say, "Yes, I'll have some of that," and move on. Q358 Joan Walley: Earlier on, Mr Challen referred to the removal of a combination of the rail and the water freight grants into a single pot. While it existed separately for your industry, did that help and contribute on the scale you hoped it would? Ms Leggate: It contributed, but I do not think anywhere near the scale that we hoped it would. Mr Lapthorn: It is largely inland. There are one or two notable examples like Leeds with aggregates, 100,000 tonnes or so a year taken off the road and delivered directly into the centre of Leeds by water. But coastal efforts are few and far between. Q359 Joan Walley: Again, in the memo you have given to us you say that the development of UK ports is frustrated by planning processes which are too slow, over-complicated and costly with the effect that therefore you are at a disadvantage compared with other European competitors. Does that apply, for example, to Felixstowe? I seem to remember Felixstowe being built without any thought at the time of the infrastructure that would lead into it. That aside, how are you now contributing to the port policy which the Government has, I understand, set up? Is that what your document which you have just referred to is about, or are you having separate discussions with the Department about its review of ports policy? Ms Leggate: No, we have fed into the ports policy debate and obviously we are now waiting for the review on ports policy. Q360 Joan Walley: Is that linked to the document you have just referred to? Ms Leggate: Yes, we do actually refer to the ports policy review in that document. Q361 Joan Walley: Is that your submission to us, or is that a separate document? Ms Leggate: No, this is a separate thing, but we have had discussions with the ports. We have members of our organisation are port operators, so we have had discussions with them and the port operators have fed into the ports policy review, but certainly the ports are a good example of the pitfalls in the planning process, things like the Dibden Bay saga, which went on for years and years and whilst we recognise that there needs to be a good planning process, there must be ways of trying to speed the process up and streamline it so that ports in the UK can compete with ports in Continental Europe. Q362 Joan Walley: Just before we come on to that, have you had any indication from the Department for Transport as to what its response to your representation is, the discussions you have had with officials? Ms Leggate: No. Q363 Joan Walley: You have got no idea what weight is going to be given to ports in the review? Ms Leggate: Well, it is a review on ports, so I am not quite sure what weight is going to be given to planning, although at a recent conference Dr Ladyman was actually giving the opening address and he did seem to indicate that planning was going to form part of the ports policy review. Q364 Joan Walley: From the talks you have had with officials, are you fairly confident from the overtures you have had with different departments as well as the Department for Transport, ODPM for example, Defra as well, that there is a sort of joined-up approach across Government? Ms Leggate: No, definitely not. This is a real problem for us. We have a fairly good dialogue with the Department for Transport, but any water freight strategy, or any freight strategy for that matter, cuts across a number of Government departments and this is not recognised at all. We do not have a great deal to do with Defra, although we need to because there are issues for Defra in any water freight strategy, and of course ODPM, and we have actually for certainly eighteen months to two years tried to get DfT to develop some sort of group for water freight which cuts across these Government departments so that water freight can actually be seen not just as transport but as something which affects the environment and something which affects the regions. We have had absolutely no success with that, no success at all. Q365 Joan Walley: Just to press you a little bit more on that, we heard earlier on what you were saying about your innovative ideas for the Olympics. Have you, for example, appraised the housing market renew areas and also the areas for the Government's sustainable communities strategy to see what the implications are there for economic and regeneration initiatives which could entail water side by side with the initiatives which are already underway? Ms Leggate: No, we have not really, because what we are primarily concerned with is freight on water, so we have not got involved with the regeneration programmes and that kind of thing. Q366 Joan Walley: So who is making those connections? Mr Lapthorn: That is a good question. Ms Leggate: I do not know. Actually, we are finding it hard to make any connections with anybody because of the fact that this committee which is supposedly making the decisions on the Olympics has not yet been formed, or has only just been formed. The problem from our point of view on water freight is the work which is needed on these locks and on these channels needs to be done now, because that is going to take some time, in order for the construction work to start in twelve to eighteen months. We are going to literally miss the boat because the work which is needed on the locks will not be completed in time and the construction work will have to start. So we fear it is too late, and certainly when I spoke to the Department for Transport about it they were very pessimistic about the whole thing because it was just all too late to do anything. Mr Lapthorn: The sad thing is that in that particular case it is not just a case of construction traffic, it is the clearing of the site and all those things beforehand and then the continuing transport of waste, et cetera, after the event. It is typically short-term thinking. Q367 Joan Walley: Just finally, you were calling on ODPM and DfT to identify sites with natural potential to be turned into interchanges where all of this could actually come together. How far down the road do you think you are - well, I think perhaps you have answered my question already, have you not? What will it take to get you round the table in order to look at this in a holistic way? Mr Lapthorn: It would take nothing to get us around the table. We would be there tomorrow. We would be there now. I think at the heart of it, I suspect, is a lack of knowledge. "There is a lorry. I know what it does, I know where it goes and I am in control of it. Ships, canal barges, whatever, I know nothing about so I won't even go there." Joan Walley: Thank you. Q368 Chairman: On your own industry's emissions, the Government's Climate Change Programme Review said that Britain is "playing an active role in reducing emissions from shipping". Can you tell us how that is happening? Ms Leggate: The active role I think comes more on an international level in shipping and air pollutant emissions from ships is covered by the Marine Pollution Convention of the International Maritime Organisation. Since then we have had a European Directive on marine fuel sulphur, which is limiting the sulphur content of fuel to 1.5 per cent and it is likely to be stricter for the port areas and inland waterways, something like 0.2 per cent. I must say, I am not aware of any initiatives in the UK to reduce that other than what has come down from European and IMO. Mr Lapthorn: The tendency is, not just in this area but across the board, to fulfil international and European obligations and because there is little or not influence over other flagships coming into the UK because of the international nature of the business the sorts of ships and inland vessels where our majority interests lie already meet these requirements anyway and engine manufacturers and others are in a continuous process of improving, reducing emissions, in the normal course of events. Q369 Chairman: So the industry does not have any particular priorities in this respect? Mr Lapthorn: Not directly, no, other than achieving the international requirements, and when you are into international fuel oils, and so on, in the larger sizes it becomes more significant. Ms Leggate: Having said that, it is a very innovative industry and very hi-tech, and this is something else which does not come across. When ship building goes on, there are not two ships that are alike. There are always improvements in design and in engine sizes, so that kind of innovation is going on all the time. Q370 Chairman: I think we have covered most of the ground we expected to. Is there anything else you wanted to say? Have we missed any points? Ms Leggate: I do not think so, actually. Mr Lapthorn: Other than to say, if I may, go out and sell it. Chairman: Thank you very much for coming in. It is much appreciated. |