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I would also like an assurance that, in view of Britain’s record of designing and building trains, the new trains will be designed and built in the UK. There is concern about whether certain rail manufacturing companies will remain open. The order for the new trains could give us a vital opportunity to secure Britain’s manufacturing base.

The longer-term question is: what happens once we have provided that capacity? How do we take it further on a network that will not be able to accommodate any more trains? We need to have a proper discussion about the development of a brand-new high-speed train that serves London, Manchester, Birmingham, Glasgow and Edinburgh. Although Eddington may have pooh-poohed the idea, I believe that if we seriously want people from Edinburgh not to fly but to catch the train down here, we need a service that can travel between the two cities in under three hours, which will be deliverable only with a brand new line and a brand new high-speed train that can deliver such services. Whether that is a Maglev train or the French variant of the HST, we need to be carrying out investigations in that respect. We can deal with things with our existing network for the next 10 years, but if we are to continue to encourage people to use the train, we will need to develop those high-speed routes.

I thank everybody for the contributions that they have made. We have had a good opportunity this morning to take forward the debate about inter-city services.

10.27 am

Stephen Hammond (Wimbledon) (Con): Like the hon. Members for Rochdale (Paul Rowen) and for Middlesbrough, South and East Cleveland (Dr. Kumar), I congratulate the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) on initiating the debate and on his speech, which was a tour de force, examining the future of inter-city rail. It is disappointing that there are not more hon. Members in the Chamber this morning. As far as my party is concerned, the reason seems to be the inexplicable decision by my colleagues to go and listen to a briefing by my right hon. Friend the Member for Witney (Mr. Cameron) and my hon. Friend the Member for Tatton (Mr. Osborne), rather than coming here to listen to me—I cannot think why they decided to do that. However, it means that I have a rather longer time than is usual in such debates in which to speak. Last night, the Minister urged me to be brief. Today, he is urging me to be lengthier in my response. I shall try to take the middle course.

The extra time allows me to start my remarks by going through the history, which is quite interesting. The hyphenated Inter-City was introduced by British Rail in 1966 as the brand name for its long-haul express passenger services. It is instructive that British Rail, in one of its few moments of real clarity, introduced the brand name Inter-City and that that was taken up by the whole of Europe. The UK Inter-City reached the peak of its public awareness in the 1970s, thanks principally to those of us who are old enough to remember the “This is the age of the train” adverts, which were fronted by Jimmy Savile.

In 1986, the British Railways Board divided its operations into a number of sectors, and the sector that
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was responsible for long-distance express trains continued to use the brand name Inter-City. Following on from the adverts of the 1970s, we had the Inter-City 125 adverts, also fronted by Jimmy Savile. The name of that train reflected its top speed in miles per hour. We are not here to debate that today, as the hon. Member for Edinburgh, North and Leith made clear, but it is always interesting to examine how what was a brand name has become a generic name.

As everybody who has contributed to the debate so far has said, it is clear that demand for long-distance travel has been growing for many years. The capacity constraints that we face in the next 10 years we also faced 25 years ago. Demand for long-distance travel has been growing for the past 25 years. The Conservative Government recognised that and started a programme of extensive electrification and line upgrades in the 1980s. The east coast main line, to which the hon. Member for Middlesbrough, South and East Cleveland referred, is the spine through the east of England up to Scotland. He will recognise that the electrification of the line to Leeds, Edinburgh and Glasgow in the 1980s significantly decreased journey times and increased capacity.

As has been rightly said, however, demand for long-distance rail travel continues to grow significantly, and all the major routes require substantial increases in capacity. The hon. Member for Rochdale quoted the popular statistic that the Corporation of London gave us last year, which shows that demand on the London commuter network is expected to grow by 30 per cent. by 2014. Similarly, Government statisticians suggest that the east coast main line, on which 2,000 passenger trains and about 250 freight trains currently run every day, will see a 40 to 50 per cent. increase in inter-city passenger traffic, a 30 to 40 per cent. increase in cross-country traffic and a 20 per cent. increase in the need for freight over the next decade.

We must ask, therefore, what will provide such extra capacity and what the Government intend to do, particularly on the east coast main line. There have been a number of suggestions. In 2000, Network Rail’s previous incarnation, Railtrack, planned to spend about £1.6 billion on the line to remove some of the bottlenecks. Over the past five years, we have seen the reconstruction of the station at Leeds and work in the surrounding area, as well as the overcoming of the bottleneck problems around Grantham. It is good that that work has been completed, but as the hon. Member for Middlesbrough, South and East Cleveland said, we need a commitment from Network Rail or, through Network Rail, from the Government to increase line capacity. Several stretches of the east coast main line could be inexpensively converted from two or four tracks to six. Clearly, some of the bottlenecks on the line are difficult to relieve—the principal one being at the viaduct just outside Welwyn Garden City, where I was brought up—and it would be expensive to increase the line’s capacity in some areas. However, it is not true that moves to increase capacity on the line are being constrained wholly by the need for expensive land purchases, and many of the problems on the line could be overcome through inexpensive land purchases.

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Although capacity is the pre-eminent problem facing the railway network, it is fair to say that other problems include over-prescription by the Department for Transport—last year, in a parliamentary answer, the Minister’s predecessor said that 14 civil servants were writing the timetables—Network Rail’s lack of vision, until relatively recently, as regards capacity increases, and the shortened franchise system, which acts as a brake on innovation and investment. Indeed, last July, as the hon. Member for Rochdale said, the Conservative party set out its belief that franchise lengths are too short and act as a brake on innovation and investment. If the Government take more premium out of the franchise period to recuperate their subsidy, one of the problems that we will have to accept is that the economic return to train operating companies during the life of a franchise will be shortened, and their ability to innovate and invest will be taken away. The lengthening of franchises is one of the key issues in terms of increasing capacity not only on the inter-city lines, but across the railway network.

The future of inter-city rail is also being constrained and that is likely to remain the case. The Evening Standard survey, to which the hon. Member for Rochdale referred, found that travelling by rail was not only more expensive than travelling by air, but that it was three times more so. A passenger on a typical rail journey creates one tenth of the carbon footprint of a passenger making the same journey by air. We therefore need to look not only at the economic consequences, but the environmental consequences, of pricing.

Despite the increased fares, however, anyone hon. Member who reads today’s debate pack or who looks at their postbag and at the articles in the newspapers will know that there have been several instances of passengers paying the full fare, but having to cram themselves on to their trains and stand for long journeys from Manchester, Birmingham and constituencies further north. In many cases, this year’s fare increases have been four times the rate of inflation, and we cannot expect people to keep making the environmentally friendly choices that we want to make if, at the same time, we do nothing to promote those choices.

Many people feel that they are being priced off the railways, and there is an indication that the industry thinks that that is a Government strategy. I should be interested to hear how the Minister responds to that. This year, Virgin and GNER have put up their average prices by more than 11 per cent., and one or two of my constituents on certain lines have faced fare increases of 56 per cent., which is hardly an incentive to go on the railways. If train operating companies are to be allowed to put through increases beyond the retail prices index plus 1 per cent., which the Government say is the standard fare increase this year, many people will want to ensure that companies deliver the necessary investment.

My hon. Friend the Member for Epsom and Ewell (Chris Grayling) summed things up rather accurately when he said:

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During the Christmas recess, the Conservative party announced that it would undertake a feasibility study with engineering consultants and financial backers on extending the high-speed rail network across the country. We accept that that is not a short-term project, but the thinking needs to be done now if we are to attack the congestion problems of the next 10 years. We also accept that no Government are likely to wish to spend in one go the £50 billion or £60 billion necessary to build high-speed rail from north to south, and nor could they afford to do so. Equally, we accept that the project may need to be phased, but the construction of our motorway network was phased, and the route from London to Manchester was not built overnight. Indeed, the motorway network was spun off from an extraordinary beginning—the motorway to Preston, which was the first piece of the network in this country.

On 19 January, my hon. Friend announced that the Conservative party was undertaking a further feasibility study to address the congestion problems about which we are all hearing. The study will look at technology that would allow an eight-minute journey from Glasgow to Edinburgh and a 15-minute trans-Pennine journey. I refer, of course, to Maglev technology and the next generation of travel. That is the sort of medium and long-term thinking and feasibility study work that needs to be done now to ensure that we make improvements and overcome congestion constraints.

Last night, the Minister and I were in the House, and I spent some time going through the Government’s transport failures. I do not need to re-enact those today, because, as the Minister knows, I set them out clearly and extensively, and they are recorded in Hansard. My speech was somewhat lengthy, but the Minister made a very short speech, and I am sure that his speech today will be a little longer. None the less, we welcomed his announcement on 8 March that the process for procuring the new train fleet for the inter-city express programme has started. The Government set the programme up to work in conjunction with high-level outputs, and it potentially represents a significant development of the inter-city network in terms of rolling stock. It is certainly the most significant announcement on the development of inter-city services that we have had from the Government in the past 10 years and, to that end, they are to be congratulated.

Perhaps I can encourage the Minister to go a little further this morning, beyond his announcement of last week, and answer some more questions. The hon. Member for Rochdale put several, including some on the environment. He touched, of course, on ownership. With the railway leasing companies at loggerheads with the Government, and one company, Angel Trains, refusing to buy Pendolinos for the Virgin west coast operation, citing uncertainty about how it will recoup its investment, how does the Minister expect the process to work? Can he confirm today that he has spoken to the leasing companies about that, and that the problem has been overcome?

Will the Minister also confirm whether the Department has the sort of expert negotiators in procurement needed to undertake a programme of the size in question? Government and public sector
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procurement records for Governments of either political colour reveal that a constant issue has been a lack of experts. The Government procurement record has thus left us, particularly in the context of defence, doing deals that have cost the taxpayer rather more than they should.

The Minister last week mentioned a figure of between 500 and 2,000 carriages. Will he discuss what the number will be? Will it be closer to 500 or to 2,000, and what will be the evaluation mechanism? Clearly, the number could have a significant impact on what can be delivered. Also, if the inter-city express programme is supposed to complement the high-level output statement, would not it have been more sensible to announce the two together? Are the Government now considering speeding up their announcement of the HLOS, so that we can see how the inter-city express programme will complement it? I wonder, too, whether the first operational date has been set. I notice that we are hoping for some trains in 2012, but perhaps the Minister will comment on when there will be full operation. What infrastructure improvements are intended to go alongside the rolling stock procurement? In the Minister’s statement of 8 March there was no indication of any infrastructure improvements. The Government have some hopes for the success of the inter-city express procurement programme, but is not its impact likely to be lessened without the infrastructure improvements that other hon. Members have discussed this morning?

Mark Lazarowicz: I sense that the hon. Gentleman is coming to the end of his comments.

Stephen Hammond: Indeed I am.

Mark Lazarowicz: Before the hon. Gentleman sits down I would be interested in whether he can enlighten us about the intentions announced by the right hon. Member for Witney (Mr. Cameron) with respect to taxation on air travel. It is good to have a debate on the issues, but I should have thought that if there is to be such a taxation increase an obvious way to allocate resources would be to invest in rail services and more environmentally friendly forms of transport. It would be helpful if the hon. Gentleman said whether that would be a good way to spend such money; I think that it might be.

Stephen Hammond: The hon. Gentleman might indeed think that a good way to spend money, and others might too. It is an interesting temptation for me to prejudge what money might be raised and how, when we are in government in a few years’ time, we shall spend it. I am sure that the hon. Gentleman will understand my resisting the temptation, but I note what he says.

I want briefly to mention the invitation to tender for the inter-city east coast franchise. That was announced on 15 December and on 20 February the pre-qualified bidders were announced. I understand that the Minister cannot talk about the bidders or where they are in the process, but perhaps he can enlighten the House—because the matter is significant for inter-city travel—about when he expects the franchise process to come to some conclusion. Can he confirm that the
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bidders will bid solely against a Department for Transport specification, as I think he said previously? If not, what other process is being used, and what are they being allowed to put into the process? Earlier in the year the Minister said that he expected the Department to be able to raise the sort of premium, from the rebidding or the reallocation of the franchise, that was in the original franchise. Does he still have that confidence, and, if so, what safeguards will be established so that the new franchisee, whoever that is, will not suffer the same fate as GNER?

10.45 am

The Parliamentary Under-Secretary of State for Transport (Mr. Tom Harris): I congratulate my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) on securing the debate. Before I respond to points that he made, perhaps I can start almost in reverse order by dealing with some of the comments of the hon. Member for Wimbledon (Stephen Hammond). I feared, when he began his comments with a reference to 1966, that it was going to be a very long speech. Strangely, his quick history of inter-city rail services in Britain glossed over the privatisation of the rail industry by his party’s Government in 1994. He gave more mentions to Jimmy Savile than to the privatisation of the rail industry.

Perhaps the hon. Gentleman will take this opportunity to intervene; I do not have that much time, but I should be happy to give way to him. He has made several critical comments. Can he confirm that any future Conservative Government will refuse to accept premiums from any bidder for a rail franchise? While he is doing that will he confirm that they would not necessarily go for the company offering the largest premiums?

Stephen Hammond: I did not mean to avoid speaking about privatisation this morning; it could have taken us into a rather long discourse, and I thought that we were relatively constrained by time, so I did not head down that route. The Minister will I am sure want to confirm that use of the railway system has increased significantly since privatisation. As to premiums it is far too early for us to prejudge what would happen. We might of course choose an altogether different system for the operation of the railway network. It is not at all clear yet, so I shall resist the temptation from the Minister, rather as I did the interesting temptation from the hon. Member for Edinburgh, North and Leith.

Mr. Harris: I shall take that as a no.

The hon. Member for Rochdale (Paul Rowen) made a similar comment about premiums. He said that the premium required by GNER in the previous franchise was too punitive. I wonder if he understands that when an invitation to tender is issued, not only do the Government not specify a level for premiums; they do not specify whether a premium should be paid. I am not sure how the hon. Gentleman can conclude that a premium that was volunteered by GNER was too punitive. The term punitive suggests that the Government were in some way trying to punish the winning bidder for the GNER franchise.

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I sometimes, in my darkest moments, envy the Liberals. It does not happen often, but I wonder what it would be like to have the luxury of being in a party that, never aspiring to Government, does not have to consider the consequences of policy or finance. We have seen this morning a typical example of Liberal Democrat wishful thinking on policy. The hon. Gentleman talked about fares and about its being cheaper to travel by plane than by rail. He gave a continental example. He did not point out that he was making a comparison of the most expensive peak fares in Britain with average off-peak fares on the continent. That is fair game in politics; I understand the point that he is trying to make. However, sometimes we should pay less attention to badly-conducted newspaper surveys in this country and more attention to the facts. However often we say that air travel is cheaper than rail travel, simple repetition does not make it true. Often newspaper surveys do what the hon. Gentleman has done this morning. They take the cheapest advance flight on easyJet or one of the cheaper airlines and compare it with the same journey by rail, for which they take the first-class, pay-on-the-day fare. Of course those fares will be more expensive than advance purchase fares on the cheaper airlines. The hon. Gentleman fails to take into account airline tax and the fact that there is sometimes an additional charge for baggage on flights. Also, the cost of travelling from a city centre to an out-of-city airport, on the Heathrow Express for example, is never taken into account.

Paul Rowen: I understand the Minister’s point, but let us deal with real facts. A first-class ticket from Manchester to London is £337 by rail and £319, including tax, on a British Airways full-rate fare. That is a clear example without any reduction in fares. That clearly is not right.

Mr. Harris: I do not accept the hon. Gentleman’s comparison.

The hon. Gentleman said that fares have increased hugely in the past few years. There are two points to make on that. First, because of the control that the Government have exercised in the past 10 years, regulated rail fares, which the majority of rail passengers use, are 2 per cent. cheaper today, in real terms, than in 1996. He says that that is a huge increase, but I think it is a decrease.

Secondly, is the hon. Gentleman suggesting that the Government should increase the subsidy to railways in order to reduce the fare that passengers pay? That is a perfectly legitimate policy, which I might embrace wholeheartedly if I were a Liberal—hypothetically, of course—knowing that I would never have to implement it in office. It is a lazy argument simply to say that every passenger should be even more subsidised than they are.

Paul Rowen: Does the Minister accept that if we had longer train franchises, we would be able to get investment without having to raise such huge sums through fares?

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