Rail fares and franchises - Transport Committee Contents


Examination of Witnesses (Questions 100-119)

MR PAUL FURZE-WADDOCK, MR PAUL BUNTING, MR GRAHAM LEECH, MR CHARLES HORTON, MR JIM MORGAN AND MR DAVID MAPP

4 FEBRUARY 2009

  Q100  Chairman: Were any of our witnesses here today present at that meeting?

  Mr Leech: No, but I can say that we have no plans to reduce services or to request to do so.

  Q101  Sammy Wilson: Just a couple of days after the meeting then, DfT officials briefed the Public Accounts Committee, indicating that five of the franchises had got red light status, that that was covering 25% of the network and that there actually were concerns about the viability of some of the franchises. Were they being unnecessarily alarmist or does that reflect what you are seeing within your own companies? Of course, there is then the additional information in the note from JP Morgan, the investment bank, about National Express and the East Coast franchise and the long-term difficulties there. All of that information, you are saying, was unnecessarily alarmist and you are not expecting that some of the franchises will be in trouble within the next year?

  Mr Mapp: Well, we do not know what criteria the DfT are applying when they say that a franchise is in trouble, so it is very difficult for us to comment on that, nor do we know which franchises the DfT were referring to.

  Q102  Sammy Wilson: Do they make this up? Before they make this assessment, presumably they must have some discussion with the franchisee to ascertain whether they are in trouble or not. I cannot imagine that there is a red light flagged up for a particular service without any discussion at all with the people who are providing it.

  Mr Mapp: Well, we have a fair proportion of the train operating community represented on this table today. When we spoke about this matter prior to today's committee meeting, none of the train operating companies here had been informed by the DfT that they were on this red light list, so there has not been discussion.

  Q103  Sammy Wilson: Well, would it alarm you then that officials in DfT make this up, come along, give this information, albeit they do not name the companies, but they give this information to the Public Accounts Committee which, in turn, must have some impact on your businesses and on the staff who work for you? Does it alarm you that this is being done without any discussion with you at all?

  Mr Mapp: Well, clearly it is within the DfT's gift to make public whatever information they think is appropriate. I am not sure that we can comment any further on it. We do not know which train companies are on the list which the DfT talked about. As far as the witnesses here are concerned, and I will ask them to contradict me if it is not true, none of the train companies they represent has been in discussion with the DfT about this list or indeed DfT concerns about the viability of their businesses, so I am really not sure I can comment any further on the matter.

  Q104  Mr Clelland: But you represent all of the train companies, do you not?

  Mr Mapp: Yes, I do.

  Q105  Mr Clelland: So, so far as you are aware, it is not likely that any of them is going to be in trouble as a result of the recession and you have not had any discussions with any of them about that?

  Mr Mapp: At the moment, I have no information at all that any train company is in financial difficulties.

  Q106  Graham Stringer: If I were a trade organisation and the Government said that five businesses had got red lights, and you have this financial relationship with them where, over the next two or three years, a lot of your members will have to pay out a great deal of money, I would ask the Government who was red-lighted or red-flagged. Have you asked them?

  Mr Mapp: Please could you repeat the question.

  Q107  Graham Stringer: Have you asked the Government who has got a red light?

  Mr Mapp: We have not asked them that. In the information that only came out very recently, I have no doubt the individual train companies—

  Graham Stringer: It was in The Guardian on 22 January and it had been at the Public Accounts Committee prior to that on 21 January. Even if the Government are saying that five of your members are in trouble, you have had sufficient time to pick up the phone to Mr Mitchell or to somebody else and say, "Can you tell us which of the companies, you think, are in trouble?" I would expect a trade organisation to want to defend them.

  Q108  Chairman: I presume that you saw the press cutting, that it was drawn to your attention?

  Mr Mapp: Yes, we are aware of the press coverage. As far as I am aware, ATOC has not discussed that matter with the Department for Transport. I would not be surprised if individual train companies had sought reassurance that they were not on the list. Now, I do not know if those discussions have taken place and, if so, what the outcome was, but, as I say, we were not aware of the announcement by the DfT prior to the DfT making it and we are not aware of the criteria that the DfT have applied in assessing which train companies may be, in their view, at risk. I am not sure that I can comment much further on this.

  Q109  Graham Stringer: I hope you can comment on other things because that is what we are here for really. In the same report in The Guardian, it says that there was a memo circulated among railway bosses before the meeting with Geoff Hoon which focused on the rail issues, which the DfT have agreed to discuss, and it lists a number of contingency plans for the industry, including the shortening of trains, the Government shouldering a greater share of losses on contracts, state-funding of an extra 1,000 jobs on the network and an easing of borrowing restrictions on contracts. Was that a real memo?

  Mr Mapp: Well, I am not really prepared to comment on leaked documents.

  Q110  Graham Stringer: Not even whether it exists or not, even though it has been published in The Guardian?

  Mr Mapp: I am afraid, I am not prepared to comment on leaked documents.

  Q111  Graham Stringer: What are you trying to hide from us? What are your members trying to hide from us about the future? Why do you come to this Committee and tell us, bare-faced, that you are not prepared to comment on whether a memo reported in The Guardian, a reputable paper, is real or not? You have just been telling the Chair of this Committee that at this meeting with the Secretary of State none of these issues was brought up, apart from in those general terms, and yet more than a week ago we had a report of a memo which you will not acknowledge.

  Mr Mapp: Well, I am quite prepared to reiterate on the record that the specific issues that were mentioned in that Guardian article were not raised with the Secretary of State. The discussion was of the more general nature that I described earlier in these proceedings.

  Q112  Graham Stringer: Well, that is not quite the question I am asking now. I am asking whether this document is real and those are your genuine concerns. According again to this article, and I do not want to read the whole of the article out, it also says that you are worried a great deal about the other question, and I cannot remember who asked the question now, about the possibility of fares being forced down because of the RPI-1 formula, and you did not seem to be that concerned about that, yet this memo, reported in The Guardian, says that you are worried about it. Why will you not explain your concerns to this Committee who are representing the public?

  Mr Mapp: I think the position in regard to the meeting on the 20th, as we made quite clear, is that that meeting did not discuss the specific issues that The Guardian article—

  Q113  Graham Stringer: I want to focus on this memo which was circulated amongst rail bosses. Clearly, those are the concerns you are concerned about in private, and I would be surprised, quite frankly, if you were not, but why will you not share them with this Committee? There is a huge amount of public money going into the railways and we want to know whether it is being used wisely and what is going to happen next. Why will you not tell us what your thoughts are on this matter?

  Mr Furze-Waddock: I do not know if I can help or speculate, I was not at the meeting, I was not party to it and I have not seen the note, but, as I would understand it, it would be highly unusual if there were not a briefing note prepared for a high-level chief-executive-level meeting with the Secretary of State, briefing them as to what issues may or may not come up.

  Q114  Graham Stringer: It should not be like this, but do you know if this is a real note or are you just guessing that a note might have existed? That is all we are trying to find out.

  Mr Furze-Waddock: I am afraid, I honestly do not know.

  Q115  Graham Stringer: So you are guessing. Does anybody know whether this is a real note?

  Mr Mapp: Well, as Paul highlighted, it is not uncommon for briefing notes to be produced before meetings of this kind. I cannot comment on that particular leaked document that The Guardian quoted, but what I can reiterate on the record is that the specific issues that were in that Guardian article were not raised with the Secretary of State in the meeting and that the more general discussion that I described earlier did take place.

  Graham Stringer: You keep coming back to the meeting and I keep going back to the issues, that there is a memo, or maybe there is not a memo, going round the bosses of the rail industry that it is very worried and it seems that that memo indicates that you might be going to ask for higher fares than the agreements warrant, more public subsidy, worse train services and shorter trains, and, if that is in your plans, why will you not tell this Committee?

  Q116  Chairman: Let us ask people individually because this is an extremely important matter. Let me ask National Express: Mr Bunting, are the items referred to in the memo, which has been referred to by Mr Stringer, items which have a resonance with you? Are these matters of concern which have been raised?

  Mr Bunting: Madam Chair, I have not seen the memo. However, we have no plans to cut services, so I know for a fact that that is not the case.

  Q117  Chairman: But are you aware of the concerns as expressed in the alleged memo?

  Mr Bunting: Actually I have not seen the memo, so I cannot comment.

  Q118  Chairman: But you have heard what is in it and are those matters which are familiar to you as matters of concern?

  Mr Bunting: All I am going off is what Mr Stringer says, the edited extracts. We are still growing, we have seen year-on-year growth, we are still planning to work with the Government for the expansion of our services and to increase frequencies, so it does seem to be at odds with the long-term plan we have got for our businesses.

  Q119  Chairman: You say that you are just listening to extracts from Mr Stringer, but I find it pretty incredible that a news item of this importance would not be relayed to you through your organisation. Surely, you are looking at what is reported of a significant nature in serious newspapers.

  Mr Bunting: And what I am saying is that our plans are for expansion, our plans are for growth and we are still seeing growth in the business; fact.



 
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