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30 Nov 2006 : Column 1293

Let me also offer the example of my experience of timetabling on the Great North Eastern Railway route. I went up to Newcastle in the summer, and I checked on the national rail timetable website what train I should take. To my surprise, it told me to change trains at York—to get a Virgin Trains train there, rather than take a GNER train for the entire journey. I was puzzled by that, so when I got on the train I asked the guard why on earth the website had given me that advice. He said, “Ah, that is because we add an extra 10 minutes to the timetable between Durham and Newcastle so that we can catch up on any timetable problems we might have.”

The truth is that, although there have been improvements in performance, in some cases they have been created by extending the timetable. Therefore, they do not amount to simply an improvement in the reliability of the railway. There might now be a more realistic timetable, but the point I have made has to be taken into account when Ministers say to us that the railway is performing dramatically better.

David Wright: Are not the examples that the hon. Gentleman is giving us commercial decisions to do with managing the timetable and the network effectively? I am surprised that the hon. Gentleman is raising those examples as issues considering what he told us about five minutes ago: timetables are irrelevant as far as his party is concerned and they should be in the hands of the rail-operating companies. Therefore, why is he raising the point?

Chris Grayling: I am raising it because it is a practical fact. We have heard the Minister setting out that there have been significant improvements in reliability. That is the case, and we should offer our congratulations to those in the rail industry who have delivered improvements in performance over the past five years, after a very difficult period for the industry. However, in some cases those performance improvements need to be somewhat qualified by the significant changes that have been made to the timetable.

Mr. Drew: Will the hon. Gentleman give way?

Chris Grayling: No, I shall make some progress now, because other Members will want to speak.

The big challenge our railways face today is very immediate, and it is too low down Ministers’ priority list. It is hard to see how the current network can continue to absorb the projected growth in both freight and passenger numbers, and the increased growth that it is getting year by year, without serious measures being taken to ease constraints on capacity.

The forecast for the next few years for the rail industry is not attractive to the travelling public. According to the rail regulator, there will be no growth in passenger-train kilometres between now and 2014, but according to both Network Rail and the train operators, passenger growth during those years is likely to exceed 30 per cent. The small print of the new franchise arrangements means that it is almost certain that unregulated fares will rise sharply year by year:
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this year it is three times the rate of inflation, and last January there were fare increases of up to 10 per cent. We are seeing the brutal reality of that on some parts of the network.

This summer, we discovered that the Government and one of the major rail companies had had secret talks about pushing up fares and pricing passengers off busy London commuter trains to try to tackle the overcrowding problem. Ironically, the route in question was the Thameslink route, for which the Government’s 10-year plan promised improvements by now. We were told in the 10-year plan that the Thameslink 2000 project would be open by now and would provide longer trains and more space for passengers—another example of a promise that has come to nothing.

Mr. Lee Scott (Ilford, North) (Con): Does my hon. Friend agree that asking passengers, particularly on commuter routes into London, to pay fare increases and then expecting them to travel in conditions that we would not legally allow for animals cannot possibly be a way to achieve better performance?

Chris Grayling: My hon. Friend is absolutely right, and that is the issue that lies ahead for the rail industry and the Government. They talk about improvements in performance, but our trains are increasingly overcrowded and action is not being taken to ease the pressure. Our rail network seems to be expected to absorb the growth forecast as a result of increased economic activity and the increasing numbers of people coming to live in this country. The practical reality is that our rail network will be an unhappy place for passengers in the next decade if action is not taken to ease the capacity problem. The situation is unsustainable. It is not realistic to expect the passengers of the next decade to travel on increasingly overcrowded trains; nor will we get freight off the roads and people to leave their cars at home if the rail network is under such pressure.

We must remember that all this is happening at a time when the taxpayer’s spending on the railways is at a record level. Five years ago, the subsidy for our railways was just over £1 billion a year; this year, it is in excess of £5 billion. I see no sign that the Government or Network Rail—the two organisations with the power to do something about the problem—are really getting to grips with the challenge ahead.

The irony is, of course, that six years ago the Government did promise that they would get to grips with the problem. The 10-year plan for transport, which was their strategy to ease congestion on our transport system, was ambitious stuff. We were promised wholesale change. The Deputy Prime Minister was absolutely clear about its goals. He said in its foreword:

The document promised a transformation on the railways. It promised the modernisation of our main rail arteries, such as the west coast main line, by 2010. We can put a tick in the box for that one. The east coast main line —[Interruption.] I thought that I had already
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turned off my phone, Mr. Deputy Speaker; I do apologise. The east coast main line has been forgotten. The Government are about to start improving the Great Western main line, but there will be no improvement in capacity. We were promised upgrades to our suburban railways in London, Birmingham and Manchester. We were promised less congestion, more rail freight and upgrades of the routes to our major ports. [Interruption.]

Mr. Deputy Speaker: May I say to the hon. Gentleman and to the Member who is now holding the electrical device that if it is uncontrollable perhaps it could be taken out of the Chamber now and left outside, where it may do what it likes?

Chris Grayling: We were promised the Thameslink 2000 project, and we were even promised that Crossrail would be open by 2010. The truth is that virtually none of that is going to happen.

The Government talk endlessly about the need for a strategic approach to our railways. They even set up the Strategic Rail Authority in a blaze of publicity. It was commended by the previous Secretary of State, who said that it had already brought coherence to long-term planning, and that the new management was making a real difference. Then, it was scrapped by that same Secretary of State. Instead, we have Ministers taking decisions on what happens to rail passengers throughout the country.

David Wright: Does the hon. Gentleman think that we should do more to encourage people to book transport on the telephone, or by the internet?

Chris Grayling: I am not sure that politicians should be playing such an active role in micro-managing the railway. I have no doubt that the rail companies are perfectly capable of taking decisions on how best to provide booking services for their customers.

It was Ministers who decided to downgrade Melksham station, in Wiltshire. It was Ministers who decided that there should no longer be rail services from Walsall from Wolverhampton. It was Ministers who decided that there should be no Sunday services at many stations in Oxfordshire. It is Ministers who have decided to start running down the railway line from Oxford to Bicester—an area that we know is blighted by traffic jams.

The problem goes deeper. Not only are the Government failing to fulfil their promises to deal with the capacity needs of the future, but they are responsible for the changes to the rail franchising system that represent the ultimate stealth tax on passengers. Let us consider the case of South West Trains. The Minister and I have had exchanges about the award of the South West Trains franchise and the so-called 20 per cent. increase in passenger capacity. Let me explain the reality of that to the Minister now that we have a little more time than during Question Time.

Today’s applicants for a passenger franchise do not bid to run a business: they bid to operate a detailed specification and timetable provided by the Government. They bid blind and, if they are the incumbents, they risk losing their business overnight.
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Because they have relatively little flexibility, financially and operationally, the winners tend to be those who squeeze the most out of the system. In the case of South West Trains, that means squeezing the most possible people into its trains and handing over the fare money to the Treasury. What is the consequence for passengers? Well, South West Trains bid more than £1 billion for its franchise and it will have a severe task hitting that target.

Where will the mysterious 20 per cent. increase in capacity come from? It is true that the company is buying 10 new coaches for the Windsor line, but they will come nowhere near providing a 20 per cent. increase in capacity. Instead, it will come from ripping out seats on suburban trains to create more standing room. On medium-distance routes, it will come from removing toilets to create extra room for passengers and, on longer distance routes to the south coast, it involves scrapping the still modern and comfortable express train units that have two plus two, four-across seat configurations plus tables and replacing them with the more cramped inner-suburban five-seat configuration trains, cramming more passengers into the same space. None of that represents an enhancement of the service for passengers.

It is not an enhancement of the service to ask passengers who are travelling from the north-west to the south coast to get off at Birmingham New Street and cross over several platforms to change trains. New Street is probably Britain’s most overcrowded station, but the imperative for improvement comes not from a lack of platforms but from the available space on the concourse. Only this Government would think that it was a good idea to have more people get off at Birmingham New Street to change trains —[ Interruption. ] Is the Minister willing to intervene to tell us that that will not happen? Hon. Members would be delighted if that were the case.

Mr. Harris: I would not wish the hon. Gentleman inadvertently to mislead the House, so I shall repeat what I said earlier. We expect that the new franchise will mean fewer passengers having to change at New Street, not more.

Chris Grayling: Let us be clear on that point, because the issue has caused great concern to hon. Members on both sides of the House. Long distance through services from the north to the south of England using the cross-country franchise and passing through Birmingham will have to terminate there, instead of continuing to their destinations. Will the Minister confirm that some services that are now through services will become divided services, as part of the refinement of the franchise?

Mr. Harris: I confirm that some services that are now through services will terminate at Birmingham New Street—the hon. Gentleman is right about that—but other services that now terminate at that station will no longer have to do so. Overall, we expect that fewer passengers—I repeat, because the hon. Gentleman has failed to comprehend the point, fewer passengers—will have to change trains at Birmingham New Street once the three new franchises are in operation.

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Chris Grayling: Well, I am interested to hear that reassurance, because at my party’s conference in October senior executives who are very close to the bidding process and the current franchise expressed their profound concern about the change in the pattern of services. They felt that the trains in question should not terminate in Birmingham. I am delighted if the Minister is refining the service pattern to improve the situation, and I look forward to hearing from those involved in running the franchise that they are satisfied that those changes have eased the problem.

My final point concerns the decision yesterday by the Office of Rail Regulation to refer the rolling stock industry to the Office of Fair Trading. It is not for us as politicians to pass detailed judgments on the decisions of the regulatory authorities, but I want to ask the Minister a few questions that I hope he will answer when he winds up the debate.

The Minister will be aware of the pressures facing our train construction industry. He is right to say that the change in regulations requiring train operators to replace slam-door stock over the past three years or so has led to significant additional investment in new capacity. There has been a substantial bulge in the supply of new trains to the network but, after that boom period, the remaining rail manufacturers in this country now face something of a bust. I am sure that no hon. Member wants our train construction industry to disappear, but there is a distinct dearth of orders to keep those very valuable factories open over the next few years.

The Government and the regulatory authorities have decided to pursue a full investigation of the ROSCOs. That is a big problem for the manufacturers: it will almost certainly involve a two-year moratorium on the ordering of new trains, as the ROSCOs will be uncertain about their future business and therefore reluctant to invest. What consideration has the Minister given to that problem? What discussions has he had with the train manufacturers? How can he ensure that there is no hiatus as a result of the investigation?

The rail industry has had many successes over recent years, as well as difficult times and some failures, but it is what happens in the next 10 years that matters now. For passengers and freight operators, the coming decade is likely to be a period of increasing capacity constraints, congestion and overcrowding, and there is precious little sign that the Government will act to deal with the problem before it becomes acute.

It is not too late to make a difference, but Ministers—who have taken it upon themselves to have a central role in running our railway—must take decisions and act quickly. So far, the decisions are not forthcoming: projects are sitting on the shelf and the things that could make a difference are not happening. If Ministers do not get on with the job, the problem of overcrowding on our railways will be vastly more acute in five or six years than it is now. That will undermine any attempt to deliver a more environmentally friendly transport strategy or to boost the future of our railways. My message to Ministers is that they should not look to the past, but instead look to the future and get something done.

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4.17 pm

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab): After 10 years of franchising in the rail industry, my Committee concluded that it has been a muddled policy. However, having heard the hon. Member for Epsom and Ewell (Chris Grayling), I believe that my hon. Friends on the Front Bench can be comforted by the knowledge that what we have now could never be as much of a muddle as what he proposes.

I do not want to speak for long today, so I shall concentrate on those matters that I consider to be important. My hon. Friend the Under-Secretary of State for Transport, the hon. Member for Glasgow, South (Mr. Harris), is a handsome fellow and has handed out considerable amounts of money to the rail industry. I suppose that it is slightly ungracious to look a gift horse like that in the mouth, but the reality is that the franchise system has not produced the results that we expected.

It has been stated repeatedly that franchises have led to increased passenger ridership, but someone has to say very clearly that there is no evidence that that is so. The rail companies cannot demonstrate the innovations or improved services that have produced increased numbers of passengers. They maintain that they have been able to secure more passengers, but they do not say how, or when the increases began.

For most people, it is the overcrowding on the roads that has caused them to opt for rail travel, and the affluence of our society means that they have been able to do so. That means, however, that the Government must be certain that they are getting good value for taxpayers’ money.

Andrew Rosindell (Romford) (Con): The hon. Lady is right to say that taxpayers’ money should be spent wisely. Has she considered the enormous amounts—the billions—that are being spent on the Crossrail project, and does she agree that the money could be better spent on upgrading existing lines?

Mrs. Dunwoody: I am interested in the hon. Gentleman’s question because I understood that the Conservative party was strongly in support of Crossrail and has been trying to raise money throughout the City of London, because it believes that the project can be economically defended. If that is not the case, it would be helpful to know.

The Transport Committee inquiry identified two distinct sets of tasks. We said, first, that

Secondly, we noted that a number of issues needed to be sorted out immediately because there was no clear evidence that the railway companies were doing anything other than resting on their laurels.

The famous canard that only handing over control of major passenger systems to private companies will produce high-quality management and imaginative responses is bizarre. There is no evidence for it. Some companies have produced some small innovations, but the reality is that more people use the services precisely because the Government have insisted on the replacement of old rolling stock, and because some of
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the new services are more efficient than the previous ones and most sensible people know that public transport is infinitely preferable to driving hundreds of miles for many hours.

Mr. Drew: Will my hon. Friend give way?

Mrs. Dunwoody: I shall not if my hon. Friend will forgive me; I do not want to take up too much time.

The Government want competition, but there is no real competition in the system, partly because of the capacity problems. The Committee was worried about the fact that risk had not been transferred to private companies, as was supposed to happen. We pointed out that the more risk the Government transferred to private operators, the more money they added to their demands for doing the job. The Committee concluded:

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