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6.31 pm

Stephen Hammond (Wimbledon) (Con): We have had an excellent debate. The stimulus for it was, of course, the overruns in track maintenance and disruption to thousands on the west coast main line and at Liverpool Street, but inevitably the speeches covered wider issues.

My hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright), in his lawyer-like manner, presented an excellent forensic analysis of the problems that have confronted his constituents. It was thought provoking and extremely well argued. We were also fortunate enough to hear from my right hon. Friend the Member for Wokingham (Mr. Redwood), who, in a truly memorable speech, gave a history lesson reminding us that British Rail was not the paragon of virtue that some seek to remember, and that nationalisation is no model for the running of a railway. He also reminded us of something
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that some may wish to forget: that the right hon. Member for Kingston upon Hull, East (Mr. Prescott) praised privatisation for increasing passenger traffic. My right hon. Friend was, of course, right to point out the Network Rail is the creation of this Government. At the heart of his reasoning—which is why it was so correct—was the fact that Network Rail has £18 billion of debt guaranteed by the Government, and relies on the Government for its revenue subsidy.

We also heard a well-argued and thought-provoking plea from my hon. Friend the Member for Macclesfield (Sir Nicholas Winterton) that his constituents should not be left behind in the development of high-speed services that might be introduced when the route from London to Manchester is speeded up.

Along with others, I welcome the hon. Member for Lewes (Norman Baker) to his new role as Liberal Democrat spokesman. I was interested when the hon. Member for South Thanet (Dr. Ladyman) described his speech as “good”. We always feel worried when that is said in case the next words are “and original”, and we are told that the good bits were not original and the original bits were not good.

The only part of the speech from the hon. Member for Lewes with which I strongly agreed was the part in which he said that the Government had not focused on capacity. The speech from his colleague, the hon. Member for Southport (Dr. Pugh), was succinct and positive. I wondered whether the positive element was caused by the fact that so much was being spent on capacity improvements at Southport, but I am sure it would be ungenerous of me to suggest that that was the only cause.

We heard an interesting speech from the hon. Member for North Ayrshire and Arran (Ms Clark), who is not present now. She was honest enough to state that she favoured public ownership—not a sentiment that will necessarily endear her to those on her Front Bench or, indeed, guarantee her promotion. The hon. Member for Llanelli (Nia Griffith), who also seems to have disappeared, spoke of the lack of Sunday and holiday services. The hon. Member for Leicester, South (Sir Peter Soulsby), who is present, expressed some disappointment with Network Rail, but complained that he had heard no alternative suggested from the Conservative Front Bench. I cannot remember too many alternatives coming from the Front Bench of his party when it was in opposition, but I can give him the glad tidings that we are undertaking a rail review. We are taking our time over it, and coming up with measured, costed proposals that he will be able to see later this year.

The expansion of the debate beyond the issue of overruns is hardly surprising. Members recognise that the problems with Network Rail run far deeper than the shambles that we saw over the new year. The motion calls on the Government to take steps to make Network Rail more accountable and efficient, and that is only right. Even this “not me, guv” Government must accept that they created Network Rail, and that if Network Rail is failing they must correct it and take some responsibility.

On 19 December, Passenger Focus expressed disappointment at Network Rail’s indication that there would be overruns during the new year period. Before Christmas, Virgin Trains asked the Office of Rail
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Regulation to take enforcement action against the likely disruption over that period. In other words, the problems on the west coast main line and Liverpool Street did not come out of the blue; they were anticipated and expected. The question to which we have failed to receive any answer, and which must be answered by the Office of Rail Regulation inquiry, is “Why did Network Rail not act at that stage?” Why did it not reschedule lesser works so that thousands of people would not be disrupted and uncompensated?

Time after time this afternoon we heard the Secretary of State say that we must wait for the review. The Government must accept that, in letters to Members, the management of Network Rail has already accepted a large part of the blame. One of the questions that the Minister might wish to answer is “When did the Secretary of State know of the likely problems?” Did she know before Christmas, and did she speak to Mr. Coucher then? If she did not—given the clear statement by Passenger Focus and others that there would be problems over the new year—she has been negligent.

As we all know, what actually happened was exactly what had been predicted: work on the west coast main line was not finished on time. For commuters in the constituency of my hon. Friend the Member for Rugby and Kenilworth, however, that is not news. During the current financial year alone, they have experienced 150,000 hours of delay. Perhaps the Minister will answer the question that the Secretary of State chose not to answer: do the Government still believe that the west coast main line upgrade will be delivered by December 2008, and if not, when do they expect it to be delivered?

Liverpool Street station was shut on 2 January following the overrun of a 10-day engineering project to replace a bridge. Andy Chivers, managing director of the National Express One franchise, rightly described that as a “major failure”. He also declared that Network Rail had not delivered on assurances that it had given him before Christmas. The Minister might care to address the following questions. Why could Network Rail not predict the likely problems at Liverpool Street? If it did predict them, whom did it tell and what did the Department do about it? This was a failure of project management systems. Who was in charge? When did Mr. Coucher tell the Department? When did Mr. Coucher know, and when did Mr. Henderson, the engineering director, know? Whom did he tell, and when? When did the Secretary of State know, and what action did she take? The short answer to the second part of that question must be “none”.

If this were an isolated incident, we would be disappointed. We would be asking, as Passenger Focus has, “Where is the compensation for the passenger?” and “Has the industry understood the problems?” If it were an isolated incident, however, we would not be having this debate. The trouble is that for all the comments about learning lessons, it was not an isolated incident. Even as we stand here today, there are Network Rail overruns in Scotland. There are systemic problems with Network Rail that need to be addressed: its efficiency, its accountability, its priorities and the way in which it delivers services to passengers.

What happened over the new year in 2008 was certainly not an isolated incident. The Government disbanded Railtrack, created and then disbanded the Strategic
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Rail Authority, and then created Network Rail. We were led to believe in a brave new world created by the Government: never again would there be an incident, never again would there be overruns, and never again would there be accidents. What nonsense! Network Rail has had a history of overruns and accidents. In the last two years alone, its record reads like a catalogue of mismanagement, inefficiency and incompetence. In March 2006 it was fined for failing to provide proper information to other TOCs. In September to October 2006 there were derailments at Waterloo, where the rail accident investigation branch catalogued a failure of reporting and fault management systems and supervision errors, and at Greyrigg. In March 2007, it was fined for overruns at Paddington.

In July 2007, Network Rail was fined £2.5 million for failing to complete re-signalling at Portsmouth. At that point, the ORR concluded that Network Rail had failed adequately to evaluate and mitigate the risks associated with the project. That might sound rather familiar to constituents of my hon. Friend the Member for Rugby and Kenilworth, for that appears to be exactly what happened there over the new year. Far from learning any lessons, Network Rail seems to have failed to address those lessons.

Mr. Coucher—following the lead of the Government, who seem to say, “It’s not our fault, it is always someone else’s”—has sought to blame his contractors. This is feeble at best and disingenuous at worst. It is feeble because these projects have long lead times, contractors need to procure supplies and TOCs need up to 15 months’ notice. If that were so, the question we should be asking is whether the complete scheme was identified on time and agreed, and what interaction Network Rail was having with its contractors.

It is feeble to blame the contractors, partly because only a bad workman blames his tools. It also implies a complete failure of oversight, of management supervision and of management. The accident report for Waterloo shows that failures have happened whether functions have been taken in-house or not.

Norman Baker: The hon. Gentleman has found Network Rail guilty as charged and there are certainly other issues with which it could be charged. However, I am not quite clear what the sentence is. What is the hon. Gentleman’s remedy to deal with this matter?

Sir Nicholas Winterton: Cut the bonuses.

Stephen Hammond: I am just coming to that point, but I agree with my hon. Friend the Member for Macclesfield. Network Rail is not properly accountable and it needs to be made so, but do not take our word for it. This morning, one could have read Tom Winsor’s remark that

Lord Berkeley, a Labour peer, said:

Network Rail's structure ensures that it is accountable only to itself. My hon. Friend the Member for Chipping Barnet has already highlighted the problem of fines and has said that she believes that the ORR might require extra powers. She is right.

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Where else should accountability for Network Rail lie? Should it lie with the non-executives, who awarded themselves a pay rise of 18 per cent. on average last year and are supposed to be holding the executive body to account? In yesteryear, the then, and hopefully soon to be again, Labour Opposition used to lecture us about fat cats. At least those privatised companies delivered. In the world of new Labour, a failure to speak out or to provide accountability earns people a self-awarded 18 per cent. pay increase. Causing disruption to thousands of people earns the chief executive a £466,000 salary and £76,000 in bonus.

The short answer is that Network Rail is not a private sector company but a public sector one. This Government created Network Rail. The Secretary of State today has sought to hide behind the ORR. It is typical of an exhausted Government, clamouring for any credit they can find but shirking any responsibility. The Secretary of State failed to answer the key questions today. When did she know? What action did she take? Increasingly, she is a Secretary of State out of touch with the needs of the travelling public. Network Rail is in danger of hitting the buffers.

If, after the new year chaos, the travelling public and the TOCs view Network Rail as not fit for purpose, that is equally so of the Government and the Secretary of State. The Government have a responsibility to ensure that Network Rail works. It is a failure: the failure of the Government. The travelling public, who suffered fare increases of up to 14 percent and often travel in sub-human overcrowded trains, deserve and have a right to expect better.

6.45 pm

The Parliamentary Under-Secretary of State for Transport (Mr. Tom Harris): This has been a very good-humoured debate—at least the middle of it was; the beginning and end have been less so.

I will come back to my prepared comments, because first I want to make it clear that mistakes have been made and Network Rail has issued an apology. Passengers have paid the price for the mistakes made and that is unacceptable, as both sides of the House accept. The hon. Member for Wimbledon (Stephen Hammond) has said that Network Rail is a failing company. That speaks more to his wishful thinking than to the facts. Nothing would please the Conservative party more than to have Network Rail painted as the same basket case as Railtrack. It is simply not the case.

[Official Report, 23 January 2008; Vol. 470, c. 16MC.]

Network Rail came to the rescue of Railtrack. When Railtrack was drowning in its own inefficiencies, and costs for the updating of the west coast main line had gone to above £20 billion with no prospect of the project finishing, it was Network Rail that came in and rescued the project, which is now delivering at a cost of £8 billion. It was Network Rail that helped push performance up by more than 10 per cent. as measured by the industry standard public performance measure. It is the outstanding engineering experience of Network Rail that is leading renewal and expansion of the rail network at Birmingham New Street, at Reading, on the west coast main line and through Thameslink.

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My hon. Friend the Member for North Ayrshire and Arran (Ms Clark) spoke about her concerns about the involvement of private industry. I do not agree with her. I do not think that the involvement of the private sector in the rail industry is a bad thing. I think that it has brought innovation and efficiencies to the rail industry. She is a solid supporter of the railways and I take seriously what she says. However, in some areas we will have to disagree. I do agree with her that passengers must get the best possible service. I have said on a number of occasions that the railways are not run for politicians or for the industry itself; they are run for passengers.

The hon. Member for Rugby and Kenilworth (Jeremy Wright), in a positive and emollient speech, asked Ministers to address Network Rail’s failings. He might be interested to know that, on 12 November last year, the hon. Member for Chipping Barnet (Mrs. Villiers) told The Daily Telegraph:

of all the ministerial team, I think she was probably referring to me. She continued:

If that is a genuine concern of the Opposition Front Bench, the hon. Gentleman has to accept that that comment was made in a pejorative sense. Presumably the hon. Lady does not believe that Government involvement in the industry is a good thing, yet here we have the transport Whip, the hon. Member for Rugby and Kenilworth, telling Ministers that they must micro-manage Network Rail.

Jeremy Wright: Will the Under-Secretary give way?

Mr. Harris: I am sorry but I am not giving way, because I have a limited amount of time.

The hon. Member for Rugby and Kenilworth made some other comments about services to his constituency. He might be interested to know that, at Rugby, there will be a trebling of services from Rugby to Birmingham, Coventry and Northampton. There will be an accelerated service to London, and a new semi-fast service to Crewe giving new connections to Liverpool, Manchester and Preston. There will be a major increase in capacity in all Rugby services. The upgrade of the west coast main line will be good news for all his constituents.

My hon. Friend the Member for Llanelli (Nia Griffith) talked about Sunday services and she is right; we want to move to a seven-day service. The right hon. Member for Wokingham (Mr. Redwood) gave a speech that I thoroughly enjoyed. There were some things he said with which I agreed; I will not go into the detail at the moment. However, he has the dubious distinction of being Railtrack’s last and proudest defender. He said that there was no difference between Network Rail and Railtrack but that he generally prefers Railtrack. It says something about the self-delusion of members of the Conservative Cabinet at that time that even now, after what has happened to Railtrack, they still believe that Railtrack was not an ignominious failure.

My hon. Friend the Member for Leicester, South (Sir Peter Soulsby) talked about high-speed lines. He has
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mentioned the issue before, and he knows that it is still under review by the Government, and we will make further announcements on it in years to come.

The hon. Member for Southport (Dr. Pugh) made some praiseworthy remarks about Network Rail. They were, I felt, less than enthusiastic, but he was welcoming of the utilisation strategies produced by it.

The hon. Member for Macclesfield (Sir Nicholas Winterton) talked about the need for car parking at Macclesfield. He also talked about the Government seeking modal shift in respect of the importance of getting people out of their cars and on to the railways. He can search the Library and the online version of Hansard as much as he likes, but he will not find any comment by me encouraging—or dictating to—people to get out of their cars. It is the Government’s intention to provide people with informed choices, and to allow them to make decisions about which modes to use. The fact that 40 per cent. more people are using the railways today than 10 years ago says a great deal about the stewardship of the railways under this Government.

I agree with something that the hon. Member for Chipping Barnet said. There would indeed be fewer network rail possession overruns under a Conservative Government, and that would be for one very obvious reason: there would be far fewer engineering works. The west coast main line upgrade, Thameslink, Crossrail, Reading, Birmingham New Street—funding for all those projects, which are so vital for the expansion of the railway, simply would not be guaranteed under a Conservative Government.

The Conservatives always like to dispute Labour claims that they are planning to cut public expenditure. When it comes to the railways, however, we already have a cast-iron guarantee that investment would be reduced, and reduced significantly. The hon. Member for Chipping Barnet stated on her own website:

On 17 July, she stated in the House—wrongly, of course—that the Department for Transport set the franchise payments for the train operating companies and that those payments were solely responsible for increased fares. There we have Tory transport policy to date: train companies do not like paying premiums. I wonder how the hon. Lady came to that conclusion—perhaps she commissioned research from the university of the blindingly obvious? Of course they would prefer not to pay premiums, but if a train operating company is making large profits on a franchise given to it by the Government, why should not some of the profits go back into the transport budget? That is what is happening. However, like her predecessor on the Front Bench, the hon. Member for Epsom and Ewell (Chris Grayling), the hon. Lady wants TOCs to be given subsidy only from the public purse, regardless of how profitable a franchise might be. The disappearance of those premiums would present a net loss to the rail budget, so where would the cuts fall?

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