Select Committee on Transport Tenth Report


2  A 30-year vision for the railways?

The objective of the White Paper and HLOS

4. The White Paper and the High Level Output Statement (HLOS) are based on the assumption that the way in which the rail industry is now organised is both sensible and effective.[5] On that basis, the White Paper devotes little energy to organisational structure, concentrating instead on providing a broad analysis of likely trends and requirements for the railways over the next thirty years, while the HLOS sets out in some detail what the Government aims to achieve during the five years between "Control Period 4", from 2009 to 2014.[6]

5. The Government maintains that the White Paper and HLOS represent the first plan for growth on the railways since the 1950s, and it sets out a 'long-term ambition' for a railway that:

i.  can handle double today's level of freight and passenger traffic;

ii.  is even safer, more reliable and more efficient than now;

iii.  can cater for a more diverse, affluent and demanding population; and

iv.  has reduced its own carbon footprint and improved its broader environmental performance.[7]

6. In achieving these objectives, the Government is committed to the principles set out in the Eddington Transport Study, advocating a "pragmatic" investment policy.[8] Because it is virtually impossible to forecast passenger and freight demand more than a decade into the future, the strategy will be:

i.  to invest where there are challenges now, in ways which offer the flexibility to cope with an uncertain future; and

ii.  to put in hand the right preparatory work so that, as the future becomes clearer, the necessary investments can be made at the right time.[9]

This approach favours relatively small- and medium-scale investments which make better use of existing infrastructure, rather than grand visions and large-scale investments in major new projects such as high-speed rail.[10] Eddington concluded that existing infrastructure was well developed, and that the geography of the UK did not lend itself to high-speed rail.[11]

The High Level Output Statement (HLOS)

7. The High Level Output Statement (HLOS), with its detailed specification of what the Government wishes to achieve, and how much it is prepared to pay for it over a five-year period, was generally welcomed.[12] Network Rail told us that there was a very clear plan setting out the way in which to tackle the twin challenges of growth in patronage and environmental concerns faced by the industry in the short- to medium-term.[13] The Office of Rail Regulation concurred with this view, welcoming the new sense of clarity.[14]

8. The White Paper and the HLOS are based on a number of assumptions about, for example economic growth, demographic development and the relative cost of other transport modes. When questioned on some of these assumptions, notably the price of oil, the Minister, Tom Harris MP, argued that even where these assumptions were false, it would be undesirable to change them:

    one of the underpinning tenets of the White Paper, of HLOS, and one which has been widely welcomed, strongly and warmly welcomed by the industry, is a sense of security, a sense of stability over that five year period. I think it would actually undermine the whole purpose of HLOS if we were to say that we would review HLOS month by month, depending on the price of oil.[15]

The price of oil has increased by more than 50% this year, and according to current predictions, the price is likely to remain very high throughout 2008-09.[16]

9. Although he acknowledged that the Government needed to determine the overarching strategy and vision for the railways, Chris Bolt of the ORR argued that it is not the Government's job to develop detailed strategies. In the ORR's view, the industry itself needs to take greater responsibility, and it is for the industry, led by Network Rail, to develop a range of strategic options for future development and investment from which the Government can choose. The ORR is requiring Network Rail to develop this process in preparation for the next High Level Output Statement in five years' time.[17] The ORR also acknowledged the importance of early planning, arguing that because of the lead times for rail investments, planning for the next High Level Output Specification needs to commence now - even before the current HLOS has come into effect. Again, the ORR will seek to create incentives for Network Rail to make this happen.[18]

10. The High Level Output Statement will give the industry a degree of stability and direction which we welcome. We accept that the validity of some of the assumptions which underpin the HLOS, such as economic growth and the price of oil, will change over time, and that every change should not result in alterations to the HLOS. However, where seismic shifts that are likely to remain in the medium-term occur, and where they are likely to create extra passenger growth, we think the Government needs to consider making adjustments to the HLOS. We believe the massive increases in oil prices over the past year, and the fact that prices are expected to remain very high for the foreseeable future represent such a case.

The long-term strategy and vision

11. The Government's attempt to set out a long-term vision and strategy for the railways has been widely welcomed across the industry,[19] though many commentators have argued that it needs to go further and be more visionary and radical in its approach.[20] Eurostar argued that, whilst the Aviation White Paper had succeeded in setting out a proper long-term strategy, the Rail White Paper was notable for its failure to create a similarly clear strategy for the railways. In their view, rail planners had to 'reinvent' the ability to plan for growth after decades of declining patronage.[21]

12. Many were critical of what they see as the Government ducking key strategic decisions on issues such as high-speed rail and electrification.[22] Roger Ford, for example, argued that the White Paper lacked real ambition or vision.[23] The West Midlands Regional Rail Forum pointed out that, although the White Paper took cognisance of certain long-term issues such as rolling stock procurement,[24] it failed to develop solid medium- and long-term strategies for the sector as a whole. The document was "very, very concentrated on the control period up to 2014", neglecting key projects where planning needed to start sooner rather than later.[25] In Peter Rayner's words, "the White Paper admits the railway will run out of capacity but offers no solutions."[26] He argued that unless issues such as strategic routing and other longer-term strategic development needs were addressed "the railway will stagnate."[27]

13. Some commentators believed that the reason for the absence of any real vision or long-term strategy in the White Paper was that such vision would invariably entail decisions on major infrastructure development. And such infrastructure comes with a hefty price tag. Roger Ford suggested that the Government:

    is determined not to spend any money on permanent infrastructure and infrastructure improvements. The message seems to be anything but infrastructure improvements and to squeeze more out of the railway we have.[28]

14. Taking a slightly different perspective, some organisations representing passengers argued that although long-term strategy was important, what mattered most was to get things done here and now. It was at least as important to relieve current bottlenecks and other problems as it was to plan twenty or thirty years ahead.[29]

15. The ORR recognised that key decisions about longer-term strategy remained to be taken, because the current infrastructure would reach its limits within the foreseeable future.[30] However, the Minister responded robustly to criticism that the White Paper was short on vision:

    When people criticise the 30 year strategy as not having vision, in 1996 we were planning for the demise of the industry and for us to be able to sit here today and say that what we are planning for is for more than 2 billion people to be using the industry every year and for it to be more efficient and a better performer and safer than it has ever been in its lifetime […] I actually think that is a vision that is worth it.[31]

16. Apart from the general disappointment that the White Paper had failed to deliver the long-term vision required for the railways, three specific areas of criticism of the White Paper stood out in our evidence. One concerns the way in which strategic planning and policy development for the railways has been framed, and the other two concern the failure to commit to high-speed rail and electrification.

17. We warmly welcome the Government's effort to create a long-term vision and strategy for the railways. We are particularly pleased that the White Paper sets out a positive plan for growth. However, we agree with the vast majority of our witnesses from across the industry, that the level of ambition in the White Paper is too modest. The Government's policy of responding to demand with "just-in-time investments" ignores the potential of rail investment to reduce regional disparities and improve the environment. After years of sustained growth in rail patronage, we urge the Government to be bolder in its vision and to set out a proper long-term strategy, including the planning and development of infrastructure which will improve the environment and the spatial economic development of the country.

RAIL WITHIN AN INTEGRATED TRANSPORT POLICY

18. Several witnesses expressed concern that the White Paper dealt with rail issues in isolation from other policy areas, initiatives and actors. The County Surveyors Society argued that the White Paper did not place rail clearly within wider strategies for the development of transport networks, nor indeed wider economic or spatial planning strategies. They said that:

19. Jim Steer of Greengauge 21 echoed these concerns, arguing that, because the White Paper had failed to "discuss what the role of the railway is" there was little sense in which it looked beyond current and anticipated problems of the railways to deal with wider transport problems.[33] The Institution of Mechanical Engineers was particularly disappointed that the White Paper did not develop a strategy for rail as a cornerstone in reducing CO2 emissions from transport, through modal shift.[34]

20. Several witnesses suggested that rail strategy needed to be better integrated with planning policy and regional development plans.[35] The County Surveyors Society (CSS), for example, noted that the White Paper gave the impression of being shaped by Regional Planning Assessments (RPAs), Route Utilisation Strategies (RUS) and Franchise Agreements, rather than the other way round. The CSS were concerned about this lack of coordination.[36] The South East England Regional Assembly emphasised the importance of shaping the future through a proactive vision rather than simply reacting to it:

    History reminds us that the railways have helped shape the pattern of development and movement within our society. [...] The long-term (i.e. 20 year) planning horizon of the Regional Spatial Strategy […should...] be used by Government to shape and influence the vision for the rail industry.[37]

It is, of course, not the first time we have heard concerns about this lack of policy integration. In our 2006 Report on Passenger Rail Franchising, we welcomed a commitment by the Government to integrate the franchise specification process more closely with the RPAs and RUS, but also expressed concern that:

    the Government has failed to embrace the notion of RPAs, RUS and franchise specifications flowing from a wider strategic plan rather than the other way round. This approach is likely to result in perpetuation of the status quo rather than development based on a strategic vision for what is required and desirable for the future.[38]

21. In a sense, the Minister acknowledged the need for greater integration of rail strategy with transport policy and strategy in general when he told us that the next HLOS

    probably will not be accompanied by a white paper on railways, it will probably be accompanied by a white paper on transport, looking at the whole range of transport solutions rather than just rail.[39]

22. When the Government does develop a proper long-term strategy for the railways, it is essential that it is thoroughly integrated with other Government and regional policies, on transport, the environment and planning. Policy-making on rail needs to be integrated with other policy areas in such a way that it is able not only to react to, but also to adapt to, inform and influence them. We await a more integrated policy approach and expect to see clear evidence of it in the next High Level Output Statement (HLOS) and the Transport White Paper accompanying it.

HIGH-SPEED RAIL

23. The White Paper broadly accepted the conclusion of the Eddington Transport Study, that high-speed rail would represent poor value for money in the UK.[40] Eddington concluded that the distances between major conurbations in the UK were too short to justify the construction of high-speed links. On the London to Scotland routes, there are already well-established links by air, and Eddington did not believe modal shift per se was a worthwhile policy goal. In those circumstances, he concluded, it was more economical to develop and expand infrastructure that already existed.[41]

24. We have already expressed our concerns elsewhere about the Government's attitude to high-speed rail.[42] The failure to commit to high-speed rail for at least a small number of corridors was also heavily criticised by many of our witnesses. The West Midlands Regional Rail Forum noted that getting approval for, and constructing a high-speed line was likely to take twenty years, and "a lack of capacity on the West Coast beyond 2025 south of Birmingham is an issue [which] needs addressing in the next five years."[43] Richard Brown CBE of Eurostar concurred, arguing that preparatory work needed to begin as a matter of urgency.[44] He also, however, sounded a note of cautious optimism, noting that the Department for Transport policy document, published in the autumn of 2007 had moved on from the position taken in the Rail White Paper, published less than six months previously.[45] Confirming that some change was afoot, the Minister told us that the Secretary of State had invited Network Rail to develop a range of "complex future options for some of our long-term transport challenges".[46] In response, Network Rail has just launched a study of options for building new infrastructure along five key strategic rail corridors—the Midland Main Line, the Chiltern, East Coast, West Coast and Great Western lines.[47] The study, which Network Rail expects to take a year or more, is reported to include analyses of the feasibility, costs and benefits of high-speed lines as opposed to traditional intercity lines in each of the five corridors.[48]

25. The White Paper asserts that reductions in journey time are less important to passengers than reliability and frequency of services.[49] Eurostar rejects this claim, noting that "the opening of the first section of High-speed 1 [the Channel Tunnel Rail Link] in September 2003, with a 20 minute journey time saving, has led to a 30% increase in passenger numbers".[50] With the final section of High-speed 1 completed in November 2007, Eurostar passenger numbers increased by 21% over the three-month period January-March 2008.[51]

High-speed rail to increase capacity?

26. The Chartered Institute of Logistics and Transport (CILT) told us that the primary benefit of high-speed rail was additional capacity:

    the key issue is capacity rather than speed per se. At some stage it will be necessary to lay more track and it may be better to build new (as with HS1) rather than to upgrade existing routes [...] The high-speed option should not therefore be dismissed.[52]

Professor Begg, representing the Northern Way, and Eurostar both concurred with the argument that the impact of high-speed rail on capacity was one of its principal benefits[53] Eurostar explained that high-speed trains can be significantly bigger than standard rolling stock, and therefore may have greater capacity. Furthermore, because they have better acceleration and travel faster, more services can be accommodated on one line.[54]

27. Iain Coucher, Chief Executive at Network Rail, made clear that the incremental cost difference between building a new standard intercity line and a high-speed line was fairly limited. Consequently, it would be worth considering whether any new lines to be built should be high-speed lines.[55] Professor Begg argued that building new lines was better than trying to augment existing lines such as has been done on the West Coast Main Line, simply because it avoided the disruption and consequential loss of capacity over many years. He believed the evidence was clear that new high-speed lines were the way forward to increase capacity on key routes.[56]

28. It is deeply disappointing that the White Paper dodged the decision on high-speed rail. Given the additional capacity and the limited additional cost in building high-speed as opposed to conventional rail lines, we recommend that the Government consider very seriously the possibility of building high-speed lines where new lines are to be constructed. Although there have been encouraging signs of movement in the Government's position since the publication of the White Paper, we firmly believe that this is an area where the Government needs to move into a different gear. We welcome the preparatory study to develop and evaluate options recently announced by Network Rail. Once the study is complete, it will be incumbent on the Government to make decisions and initiate the work without delay. The time frames for the planning, procurement and construction of high-speed rail links are measured in decades rather than years. Hesitation now will mean years of avoidable misery and overcrowding on the network.

ELECTRIFICATION

29. Electrified trains are more energy efficient than diesel-propelled services. Currently only 39% of the UK rail network is electrified but the White Paper rejects full electrification, partly on the basis of cost and the preponderance of other priorities during the 2009-14 period, and partly on the basis of the Department's view that the extent of the environmental advantage of electrified service may change in future.[57] The latter point depends, at least in part, on the extent to which more sustainable methods of electricity generation can be introduced.

30. Roger Ford casts doubt on the rationale for the Government's conclusions. He argues that the long lead time on such investment means even if the process is initiated now, comparatively little expenditure would be incurred in the 2009-14 period. Furthermore, in his view, there are no long-term doubts about the environmental superiority of electrified lines. Mr Ford also highlighted an important inconsistency in the Government's argument that electrification has to pay for itself over a 15-year period,[58] when the standard amortisation period for rail investment was 30 years.[59] Others, including the Chartered Institute for Logistics and Transport (CILT) also argue that electrification has been too easily dismissed by the Government.[60] PTEG expressed disappointment about the lack of commitment to electrification of urban services.[61] This point was echoed by London TravelWatch who argued that on some London lines where freight and passenger services share the space, "the better acceleration of electric freight trains is important in terms of line capacity and allows better sharing of the affected routes by freight and passenger trains."[62] The superior acceleration and efficiency of electrified lines could help to increase capacity on busy lines.[63] Electrified trains can also usually carry more passengers than non-electrified trains because no space is taken up by fuel and power generation units.

Infill electrification

31. Whilst acknowledging that full electrification of the network comes with a considerable price tag, ATOC, the CILT and the Railway Forum all argued that 'infill' electrification projects—relatively small projects to link up existing sections of electrified track to create a more coherent and flexible network for electric rolling stock—were the way forward.[64] CILT suggested that such a programme would not cost much:

    There are particular strengths in cases of infill projects that will not cost very much but bring significant benefits. ATOC has already identified a number of such schemes, and recent Route Utilisation Strategies have also contained examples. If these were to be brought forward by the industry, we would expect that funding could be made available for those with strong business cases.[65]

32. In June, the Secretary of State, Rt Hon Ruth Kelly MP, indicated that the Government is beginning to change its attitude to electrification, stating that the business and environmental case for electrification was "growing fast." She announced that a cross-industry working group was to be created to consider options for an electrification programme.[66]

33. As we have already noted in our annual review of the work of the Department in 2007,[67] the White Paper dismisses electrification too easily. Even small-scale, infill electrification projects are not given the credit that they deserve. The case for electrification is strong, and it is based on both environmental considerations and improvements in capacity. Recent indications are that the Government is now changing its mind, and that an electrification programme may be initiated later this year. We are pleased the Government appears finally to have seen sense on electrification, and we recommend that a strategy for the gradual electrification of the rail network be developed as a matter of priority.


5   Department for Transport: Delivering a Sustainable Railway, CM 7176, July 2007, paras 1.4 and 1.6 Back

6   "Control Period" is the term used to refer to blocks in the five-year planning cycle now used for the planning and budgeting for rail infrastructure. The HLOS sets out plans for the fourth five year period since this planning system was adopted, Control Period 4. Back

7   Department for Transport: Delivering a Sustainable Railway, CM 7176, July 2007, p 7 Back

8   Department for Transport: Delivering a Sustainable Railway, CM 7176, July 2007, para 1.13 Back

9   Department for Transport: Delivering a Sustainable Railway, CM 7176, July 2007, p 9 Back

10   Department for Transport: Delivering a Sustainable Railway, CM 7176, July 2007, p 9 Back

11   The Eddington Transport Study - Main Report: Transport's role in sustaining the UK's productivity and competitiveness, vol.3 para 4.173 ff Back

12   See for example: Ev 137; Ev 140; Ev 155; Ev 168; Ev 191; Ev 291; Q 84  Back

13   Q 221  Back

14   Q 287  Back

15   Q 909  Back

16   Reuters reported on 8 July 2008 that Lehman Brothers were forecasting and average oil price of $127 in 2008 and $115 in 2009. See: Reuters: JP Morgan sees $150 oil in July, Lehman ups forecasts, 8 July 2008, Error! Bookmark not defined.  Back

17   Qq 553-554  Back

18   Q 569  Back

19   See for example: Ev 144; Ev 149; Ev 178; Ev 181; Ev 184; Ev 273; Ev 280; Q 220 and Q 2 (Ev 312 ff.); Q 84  Back

20   See for example Ev 155; Ev 228; Ev 255; Ev 284; Q 599 Back

21   Qq 191-192  Back

22   See for example, Q 3; Q 85; Q 652 Back

23   Q 5  Back

24   See also Q 450 Back

25   Q 764  Back

26   Ev 287  Back

27   Q 327  Back

28   Q 4; See also: Ev 287; Q 329  Back

29   Q 600 Back

30   Q 566  Back

31   Q 929  Back

32   Ev 134  Back

33   Q 6  Back

34   Q 83  Back

35   See for example Q 651  Back

36   Ev 134 Back

37   Ev 255 Back

38   Transport Committee: Fourteenth Report of Session 2005-06: Passenger Rail Franchising, HC 1354, November 2006, para 29 Back

39   Q 818  Back

40   Department for Transport: Delivering a Sustainable Railway, CM 7176, July 2007, para 6.13 p 62 Back

41   The Eddington Transport Study - Main Report: Transport's role in sustaining the UK's productivity and competitiveness, vol.3 para 4.173 ff Back

42   Transport Committee: Seventh Report of Session 2007-08: Department for Transport Annual Report 2007, HC 313, 4 June 2008, para 56 Back

43   Ev 176  Back

44   Q 192  Back

45   Referring to Towards a Sustainable Transport System, published by the Department for Transport, October 2007. Back

46   Q 767  Back

47   Network Rail: Press Release, 23 June 2008: Meeting the capacity challenge: Network Rail looks at the case for new rail lines Back

48   "Major new rail lines considered", BBC News website, 21 June 2008, Error! Bookmark not defined.  Back

49   Department for Transport: Delivering a Sustainable Railway, CM 7176, July 2007, para 6.13 p 62 Back

50   Ev 144  Back

51   Eurostar Press release: Eurostar traveller numbers rise by over 21% to record 2.17 million in first quarter of 2008, 14 April 2008 Back

52   Ev 155  Back

53   Q 191; Q 698  Back

54   Q 198  Back

55   Qq 238-239  Back

56   Q 698  Back

57   Department for Transport: Delivering a Sustainable Railway, CM 7176, July 2007, para 11.26 p 116 Back

58   Department for Transport: Delivering a Sustainable Railway, CM 7176, July 2007, para 11.28 p 117 Back

59   Ev 174  Back

60   Ev 155  Back

61   Ev 156  Back

62   Ev 191  Back

63   Ev 197  Back

64   Ev 155; Ev 168; Ev 197  Back

65   Ev 155  Back

66   Ruth Kelly MP, Secretary of State for Transport, speech delivered to the Transport Times conference 'Action on Climate Change: A Role for Transport' on 5 June 2008. See: Error! Bookmark not defined.  Back

67   Transport Committee: Seventh Report of Session 2007-08: Department for Transport Annual Report 2007, HC 313, 4 June 2008, para 11 Back


 
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