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My third point is that since the new Secretary of State at BERR returned from Europe he has brought valuable experience of manufacturing clusters. The principle, long established in many countries, is that businesses in particular industries cluster in particular regions. That makes the sourcing, training and retention of skilled
labour easier and the sourcing of materials and services from which no business derives competitive advantage easier and cheaper, and allows the location of shared infrastructure.
The area around Derby is the only major manufacturing centre in the UK for rail technologies. It thus has a test track for vehicles and a large concentration of supply chain businesses. Highly skilled engineers and technologists find a ready market for their skills. Without wishing to be negative, I think Hitachi appears to be considering manufacturing in parts of the country where nobody has manufactured a train for 100 years. If we are to build an internationally competitive railway technology sector, we should ensure that it has critical mass and that it concentrates its capacity as efficiently as possible. There is no case for determining location on the basis of grants that may be available or generalised labour availability.
David Taylor (North-West Leicestershire) (Lab/Co-op): My hon. Friend and neighbour will be aware that the town of Ashby-de-la-Zouch has been mooted as one of the three options for assembly—the other two being Sheffield and Gateshead. My hon. Friend is dubious that 12,500 jobs will be created or sustained. Is he also dubious about the figure given by the Government that of the final delivered value about 70 per cent. will be of UK origin? Is that not the key figure?
Mr. Todd: I certainly share my hon. Friend and neighbour’s doubts. Much more thorough disclosure is needed of the thinking behind the awarding of the contract. The data issued so far have failed to satisfy most of the questions that could be put, both about labour utilisation and the value of the contracts issued within the UK.
The fourth point is that one wonders whether the right choice has been made anyway. The full reasons for awarding the contract to Agility have not been disclosed, but I understand that price was the critical factor. Was it the case that technology differences—for example, the use of lighter vehicles—increased the initial cost of the Bombardier bid? We all accept that constructing lighter vehicles is likely to be more expensive at first, but it might gain greater efficiencies in fuel utilisation over the life of the vehicles. How was that factored into the assessment of the technologies offered by the various bids?
Were both bids compliant with the technical specification in the first place? I would welcome a clear analysis of that. Is Hitachi equipped to supply an order of such scale? I understand that it is 12 months behind on a contract delivering trains to Australia, and has subcontracted substantial elements of that work to China. Is that the sort of future that we can expect on the fulfilment of the contract under discussion?
The Government have a period to reflect on the contract before committing to it. If they must pursue the Agility tender, they should focus strongly on the manufacturing strategy that was said to lie behind that decision—ensuring high-value manufacturing, access to and exploitation of key technologies, utilisation of existing supply chain businesses and rational location choice to maximise competitiveness and quality.
8.52 pm
Dr. John Pugh (Southport) (LD): I recognise, as everyone does, that railways are expensive and heavily subsidised. I believe that that is partly a result of the legacy of botched privatisation, about which other Members have spoken, which leaves an unworkable and bizarre structure in place. It leads to unclear accountability, needless friction, short-termism, and virtual private monopolies such as ROSCOs.
Despite that, we all recognise that railways are needed more than ever—by the traveller, who cannot cope with road congestion; by the environment, which cannot cope with car pollution; and by the economy, given the capacity of railway to transform and boost the local economy. I agree entirely with the hon. Member for Manchester, Blackley (Graham Stringer), who made precisely that point. Like him, I am also concerned that although we appreciate the need for rail, our appreciation of that need is fairly selective.
Let us consider rail expansion and investment. London has Docklands light railway, Thameslink and Crossrail. The Government have already made a £5 billion investment in a £15 billion scheme under the most expensive real estate on the entire planet. Millions have been spent on lawyers, millions have been committed to buy off objectors, and millions will be spent on consultants. Hours and hours of Members’ time—some of them are present—has already been used up on the project to join Heathrow to Canary Wharf, and to get those financiers, who do us so much good, and some other people, across London a little more quickly.
We are promised new trains, and the provision of new carriages has been announced recently. Some of those will appear—it is a matter of faith with me. But where will they go? Out of the first 1,300, 900 will go to London. London already has an excellent tube system, which is to be completely refurbished—it is a public-private partnership, it is not ideal, and we do have Metronet, but still, it is being refurbished. London has the best bus service in Europe. If the only problem London has is bendy buses, it is in an enviable position. If the only thing one has to worry about is how much the buses bend, one has worries that other people would be quite happy to have if they had a decent bus service. London will get more and more.
However, what about the north-west, which I represent —the place where the railways began and where rolling stock is the most ancient? There is not a penny to be spent in extending track in that area—not a foot and not a rail. We struggled to get freight smoothly off Liverpool docks, even though there was an unassailable case for it, and the project would have taken place at first sight in London had it been mooted. We are told that Liverpool Central station in Merseyside is suited to a modern city, although in fact it is an absolute pit and a King’s Cross waiting to happen.
When we complain—and we do complain—we are reminded by the powers that be of the over-cost west coast main line. We should be content, it seems, to know that huge sums are being spent not only in London, but on getting us provincials to London, perhaps a few minutes earlier than we got there before. After all, what more could colonials like us expect? Greater connectivity between northern cities? There is not much of that. A quick journey across the country? Anyone who has
tried it will know how difficult it is. That seems to be asking far too much of our current masters. Moreover, there is no real promise of carriages for Northern Rail.
Mr. Leech: Is my hon. Friend aware that it looks as though the number of carriages for Northern Rail will be reduced from 182 to 142, while the number for First TransPennine will be reduced from 42 to 24?
Dr. Pugh: Well, there you have it. We already have some of the oldest stock in the United Kingdom. We have bus chassis on rail: that is what some of those 142s are. We also have some of the most overcrowded overground trains, particularly those coming out of Manchester. We have critical but entirely soluble snarl-ups on the network, again around Manchester.
Ours is a supplicant attitude, evident even in our approach to new schemes. In the north we have good, viable, non-anorak-type schemes, predicated on rational expectation of increased passenger numbers and increased profits—schemes that would genuinely boost local economies. I am thinking of, for instance, the Burscough curves, the Halton curves and the Todmorden curves. All those are doable with the lawyers’ fees, the consultants’ fees or even the tea money set aside for Crossrail. They are small schemes with big local benefits—genuine benefits.
So sad is our psychology in the north-west, however, that we do not work together on such schemes. We know that the chances of the railway raj in London helping us are not that good. We hope that it can be cajoled into possibly doing something some time, although possibly not other things. We compete for attention. The net effect is that our London masters at the Department for Transport say “You cannot expect us to do all these things,” and then do none of them. They carry on laying the track in London, digging the tunnels in London, and spending the billions in London. It is a case of “Divide and rule”.
Let me issue a challenge. Disraeli spoke of two nations, referring to the rich and poor. I could speak, in transport terms, of two nations, north and south. However, I can be proved wrong. All that is needed is for some kindly soul in the Department to show me one yard, or one metre, of new track in the north-west. I do not mind whether it is in Todmorden, Halton or Burscough. I will reduce the demand: I should like a train less than 20 years old to arrive in my own town, at Southport station. But I am not holding my breath.
8.58 pm
Hugh Bayley (City of York) (Lab):
I want to explore some ideas about the role that our railways could play to help our country out of recession. The railways are vital economic arteries connecting businesses to markets, and connecting the north and west of the country to London and the south-east. As we heard earlier in the debate, they carry more passengers now than at any time since the second world war. I believe that the Government need to adopt policies that will reinforce the role that the railways can play in helping our country to emerge from recession in three specific ways. First, they need to encourage business confidence, especially in core railway businesses such as the train operating companies, Network Rail, and the infrastructure companies that build, maintain and renew the track. Secondly, they need to ensure best use of our existing assets by means
of more efficient timetabling. Thirdly, they need to provide as much new investment as possible to stimulate economic activity and safeguard jobs in the industry.
These are uncertain economic times, but the Government can boost business confidence during the downturn by creating greater certainty in the industry. As has already been mentioned in the debate, two years ago GNER, a train operating company that was well regarded by both the industry and the passengers who used its services, lost the east coast main line franchise. Its successor, National Express East Coast, is doing well, but the hiatus when the GNER franchise collapsed lasted for a year and created uncertainty both in the rail industry and for businesses up and down the east coast line that rely on that railway service to reach their customers and markets.
We must remember that GNER was forced out of business, first, because its parent company, Sea Containers, ran into difficult trading conditions in north America, which faced the economic downturn earlier than us in Europe, and secondly, because it faced uncertainty over the competition it had from open-access operators. I would not want National Express East Coast, or any other train operating company, to go the same way as GNER, so I ask the Government to say this evening what they are doing to reduce the risk of any other franchisee going under during the downturn.
The Government must, of course, honour the open-access agreements that have already been agreed—such as the one to Shrewsbury, which we heard about earlier. Grand Central, a York-based company, deserves a return on the investment it has made on a direct service from Sunderland, through intermediate stations, to York and then down to London. However, open-access services are not part of the strategic rail network, unlike franchises. During a downturn, the Government should give priority to the strategic railway, and when line capacity is short, it does not make sense to award a train path to a four or five-carriage open-access train when an eight-carriage franchise train could use the slot.
I was a member of the Standing Committee that considered the 1993 Railways Bill. One of the key criticisms of privatisation was that it would lead to fragmentation, and that has been borne out in practice. We have a less integrated timetable now than we had before privatisation, and that was a direct consequence of franchising. The problem has been exacerbated by open-access services.
Since the Strategic Rail Authority was wound up, there is no office or agency with a strategic responsibility for timetabling. The basic objective of timetabling is to connect point A with point B, with a direct service if possible, and with the fewest changes where that is impossible, and for any changes that are necessary to be brisk. It is a simple principle that is used by timetablers in other European countries, but, sadly, not in our country.
The Office of Rail Regulation says it is not its job to provide a timetable; its job is to adjudicate between applications from different operating companies for train slots. Yet its recent decisions on train paths on the east coast main line have enormous implications for the timetable. As a result of awarding additional paths to open-access operators, it has postponed the National Express East Coast franchise commitment to delivering five trains per hour as a standard pattern.
My constituent, Jonathan Tyler, argues that the ORR decision is misguided. He has done so powerfully in two recent articles in Modern Railways, and he advocates that the UK should adopt the same principles and timetabling tools used in other European countries. I ask my hon. Friend the Minister to look at the articles, or to get a brief from the official in his Department, Geoffrey Appleby, who is in charge of the rail utilisation strategy, about the proposals my constituent puts forward.
Let me give just one example of how railway fragmentation gets in the way of timetabling. The passenger flow by railway between York and Leeds is broadly the same as that between Manchester and Liverpool or Edinburgh and Glasgow, and it needs four trains per hour. Three trains are run at 15-minute intervals by First TransPennine Express and the fourth train is run by CrossCountry, but its train runs in between two of those others and, consequently, there are four trains in half an hour and no trains for the next half hour. Over lunch today, the Secretary of State told me that he would look at these problems. I know that Mr. Tyler has been in correspondence with Lord Adonis, and I very much welcome the fact that the Secretary of State has said that he will look at this too—I shall write to him.
The Government have a good story to tell on investment, and in an economic downturn investing in infrastructure is an effective way to create jobs and to get money flowing through into the wider economy. Franklin D. Roosevelt’s new deal invested billions of dollars in public infrastructure. That lesson has been learned by Barack Obama and it should not be lost on our Government. I am glad that the Government have increased Network Rail’s budget for track renewals over the next five years, but I am extremely concerned that Network Rail is planning to spend less next year on track renewals than it did this year. If it were to do so, that would make many skilled men redundant and the policy would fly in the face of everything the Government are saying about fighting the recession. I call on them to get Network Rail to think again.
I welcome the Government’s decision to invest £7.5 billion in new inter-city express trains. If the preferred bidder that they have identified is appointed, I hope that 75 per cent. of the value of the contract is spent in the United Kingdom. We are told that the assembly plant for these new carriages will employ 500 train builders. My hon. Friend the Member for South Derbyshire (Mr. Todd) has questioned whether the three preferred locations—Ashby de la Zouch, Sheffield and Gateshead—are the best places in which to build the trains. The Government should look closely at the location, and the Minister will not be at all surprised when I remind him that there is a perfectly good railway carriage factory in York. If the factory, which is currently used by Network Rail, is unavailable or deemed inappropriate, I should also remind him that the York central site, which abuts the York carriage works and has directly access to the railway, is one of the biggest industrial development sites in Europe and would be an ideal place for a new plant. I have already discussed this possibility with the York inward investment board, and I hope that we will be discussing the merits of York, among the other places, with officials in the Department.
9.8 pm
Mr. Simon Burns (West Chelmsford) (Con): I welcome the opportunity to take part in this debate, because Chelmsford is a significant commuter town for journeys down to London. If one looks on the positive side, one can see that some significant improvements have been made over the past 20 years to the infrastructure and to the services provided to my constituents: in the late 1980s and early 1990s, a multi-million pound redevelopment and enhancement of Liverpool Street station took place; during the 1990s Chelmsford station was rebuilt and significantly improved; and, in addition, improvements have been made to the rolling stock. I recall that 20 years ago one could travel from Chelmsford to Liverpool Street during the day and although it might have been bright and sunny outside, the carriage windows were so dirty that one would have imagined it was late evening. That is a thing of the past, and we have seen real and significant improvements and investment.
There are, however, downsides that my constituents have to put up with day in, day out, the first of which is significant overcrowding on the trains. Not only is it a safety problem but, to my mind, it is unacceptable that having paid through the nose through the fare structure for the service down to Liverpool Street, they all too often cannot find a seat during the rush hours in the morning and in the late afternoon and early evening. My solution would be to have longer trains with more carriages during that period to take the overcrowding and to ameliorate that problem. Too little is being done at the moment to solve the problem.
The other issue of grave concern is rail fares. Because commuters are a captive audience it seems that there are significant increases in fares over and above the rate of inflation, so that the price of an annual season ticket for people going down to London to work makes up an exorbitant part of their salaries. Something has to be done to ensure that people get a fair deal and value for money and that they do not have to pay through the nose, year in, year out. It will be extremely interesting at the back end of this year and the beginning of next year to see what the annual increase in fares will be, given the fact that the retail prices index, as opposed to the consumer prices index, is now at 0.1 per cent. on an annual basis—the first time that we have had that situation in living memory and beyond. The regulator and the powers that be that set the fares have to think again in this unusual time of extremely low inflation to ensure that hard-pressed commuters are not penalised once more and that they do not have to pay through the nose.
The other issue that I want to raise tonight is the fact that, on environmental grounds, it would be sensible to build a new station on the outskirts of Chelmsford, somewhere between north Springfield and Boreham, to stop all those motorists who travel into Chelmsford to get the train into London when they do not live in Chelmsford. They come from the Dengie peninsula and from areas north of Chelmsford, up near Braintree and Witham and beyond. If they could go to a station there, that would relieve the traffic in the centre of the town and would provide a steadier and more responsible way of people getting on to and alighting from trains. That proposal is in the Chelmsford borough council structure plan. We can argue about and discuss exactly where a
new station should be, but I welcome the fact that it is in the plans and that it is an accepted fact that it should come to pass.
Sir Peter Soulsby: Will the hon. Gentleman give way?
Mr. Burns: I will not, because I do not have enough time.
I only hope that the current economic situation will not cause a dream that is about to be realised to be postponed through a lack of finance.
I do not want to take any longer, as I know that a number of other hon. Members want to take part in the debate.
Sir Peter Soulsby: Will the hon. Gentleman give way?
Mr. Burns: No, I will not, for the very reason I have just given.
I urge the Government to use their influence to ensure that next year, when fares increase, commuters are not used as a whipping boy because they are a captive market. They should not have to suffer, yet again, a significant increase in the fares that they have to pay without a significant improvement in the quality of the service. Severe disruptions happen too often. Sometimes, to be fair to the rail provider, those disruptions are not due to the provider but to vandalism, but we need to ensure that the overall service improves. We need to ensure that the work on the overhead electrification cables, which involves investment to replace infrastructure that is 20 years-plus old and that is out of date, is enhanced and moved along the line towards Chelmsford and beyond to Colchester more quickly and that the plans for the timetable ensure that we can all benefit from those improvements.
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