Welsh Affairs Committee - Minutes of EvidenceHC 95

Back to Report

Taken before the Welsh Affairs Committee

on Tuesday 12 June 2012

Members present:

David T. C. Davies (Chair)

Stuart Andrew

Geraint Davies

Jonathan Edwards

Nia Griffith

Susan Elan Jones

Karen Lumley

Jessica Morden

Mr Robin Walker

__________________

Examination of Witnesses

Witnesses: David Sidebottom, Passenger Team Director, Passenger Focus, Iwan Prys-Jones, Interim Taith Executive Officer, and Mark Youngman, Chair of South East Wales Transport Alliance Rail Working Group and Transport Policy and Compliance Manager at Monmouthshire County Council, gave evidence.

Q1 Chair: Good morning, gentlemen. Thank you very much indeed for coming along today. This is an evidence-gathering session, not some sort of Rupert Murdoch-style inquisition, so please feel free to tell us what you think we need to know. It is all quite friendly.

Could I start by asking you to introduce yourselves and then perhaps give us a few words on whether you think the current cross-border road and rail services are adequate? Presumably, we are all here because we think that they could be improved, and perhaps you could just tell us briefly how that might be done? If I start twitching, it probably means that I am about to cut you off, because we are running to a fairly strict schedule. Shall we go from left to right?

Iwan Prys-Jones: I am Iwan Prys-Jones. I am the Executive Officer at Taith, the North Wales Transport Consortium, which is a joint committee of the six local authorities in north Wales. It is fair to say that cross-border communication is absolutely essential from the point of view of the transport infrastructure in north-east Wales. Links between the north-east of Wales-or between the whole of north Wales and the north-west and midlands-are crucial to the development of the economy.

Fundamental to us is the fact that the border in north-east Wales is almost indistinct as far as the economic view of the world is concerned, and there is a huge daily migration in both directions across the border to seek employment. Chester, for example, provides a great deal of white-collar employment for north-east Wales; and north-east Wales provides an awful lot of manufacturing employment for people in Chester and the north-west. The recent designation, of the enterprise zones increases the importance of cross-border links, but the big issue for us is that the cross-border links at the moment are heavily dependent on the congested road network. Although there have been improvements in terms of cross-border public transport links, there is probably some way to go to provide a series of viable alternatives to car-based travel for people to access employment and growth opportunities.

David Sidebottom: I am David Sidebottom, Passenger Team Director of Passenger Focus. Passenger Focus is the British railways passenger watchdog, and it also represents bus passengers in England only, outside London.

Our focus particularly is looking at what makes passengers more satisfied with existing rail journeys that go cross-border, and also looking at what will be going into the new franchises, particularly the Great Western franchise. We have done a lot of work to influence that, and have sought the responses of over 4,000 rail passengers to influence what comes out in the final bids from the train operating companies. It has been interesting, in pulling together our documents, to see the growth, particularly in journeys from Wales to the south-west of England, which have grown quite dramatically over the last 15 years, with numbers doubling. I am happy to talk about the passenger experience.

Mark Youngman: I am Mark Youngman. My substantive post is with Monmouthshire county council on transport policy, and some of you may have received e-mails or had meetings with me in the past.

I am quite well versed in cross-border issues, not just in the south-west but also up to Herefordshire and into Gloucestershire. Part of the reason why I am here is that I represent Sewta, the South East Wales Transport Alliance, which is the south Wales version of Taith. I am here in the role of chair of its rail group. It is much the same as Iwan said, particularly within Monmouthshire; people who live in Monmouthshire and in south-east Wales who do not work in south-east Wales but commute over into Bristol. Bristol is growing; it has a local enterprise partnership, and lots of housing and development is proposed. There is also development proposed in the Forest of Dean at the moment, and lots of expectation that people who will be living there will be travelling to Bristol, when at the moment they have to come into Wales to go out of Wales again.

In addition, we have lots of involvement with small things, such as small villages whose nearest school or health facility are actually in Wales, but they are based in England. They have a bus service and a bus pass, but it offers different conditions to what is experienced in Wales and also a different level of service. They are smaller things-the day-to-day things-particularly as we are now getting an ageing population; people are finding that they cannot afford to use their cars any more, and where the employment opportunities are out of the area that they live in, that affects how cross-border issues are dealt with.

Q2 Chair: Our predecessors on this Committee found that there was not enough investment going into cross-border routes from England, presumably because the authorities did not see anything that was important to Wales as being a priority. I am not taking a view on this; that is just how they saw things. Do you see things in the same way? Do you think that there are problems with some of the cross-border routes, particularly the road routes, and if so which ones?

Mark, I presume that we would both think that the M4 and the area up to the tunnels is something in Wales that needs improving. Are there any other particular problems?

Mark Youngman: The M4 was referred to in our response and the consultation that is being carried out at the moment on the M4 between Newport and Cardiff. You also have roads such as the A48 running through Chepstow. With all the houses being proposed in the Forest of Dean, to get to Bristol people are going to have to use the A48, and anyone who has had the joy of travelling up Hardwick hill in Chepstow knows that it is not the best experience in the world. You also have the routes that travel up into Herefordshire such as the A465, again a cross-border single carriageway.

People have perhaps focused on the M4 because that is the main route between Bristol and the south-west of England and south Wales, but one might argue that because of the tolls there are other routes that people would look to when travelling from the midlands and the north of England into Wales. I have referred to the A40, but there is also the A449 through Monmouth coming down from the M50, and every Friday now you hear of a problem in Monmouth at the traffic lights, with lorries having overturned and things like that. I have also heard of problems on the A465 coming down from Herefordshire into south Wales.

Q3 Chair: Thanks for those specifics, which are great. I was aware of those, but I am less aware perhaps of north Wales.

Iwan Prys-Jones: It is a mixed bag in north Wales. There are four main routes coming into the area. The A5 from Chirk is reasonable and of equal standard on both sides of the border. On the A494, from the end of the M56, you have had significant improvements on the English side of the border, but proposals are still awaited for the A494 Aston hill scheme, which is contentious locally but is a significant issue for traffic coming in and out of Wales. The other two main routes are the A55 west-bound into north Wales and the A483 south-bound towards Wrexham. Both have to use the same extremely difficult junction. The A55 traffic is not impeded too much by that junction, but anything travelling north or south in or out of Wrexham or eastwards out of north Wales and seeking to go south-that junction provides one of the main north Wales-south Wales links-suffers enormous problems. Ironically, the impact of the junction tends to be on Wales, but the junction is actually in England and is therefore the responsibility of the Highways Agency. Partly as a result of work done by this Committee, the issue of that junction has been raised and profiled recently, and we are now seeing some joint work across the border with bids being put in for funding for that junction. Nevertheless, it remains a critical bottleneck for the whole of north-east Wales regionally.

Q4 Chair: Mr Sidebottom, you must have an all-Wales view, looking at it from the bus perspective. Are there are any particular routes that you want to mention?

David Sidebottom: It is difficult because our bus remit is England only. We have done some bus passenger satisfaction work recently, which we published in March, particularly in the south-west and one or two counties along the border.

Q5 Chair: Some of those English routes are obviously coming into Wales.

David Sidebottom: Yes.

Q6 Chair: If you had unlimited money, which one would you pick?

David Sidebottom: It is difficult to say; our research is more about satisfaction with existing services than about opportunities to exploit new routes.

Q7 Jessica Morden: May I ask about the passenger experience? What are the key priorities for passengers on cross-border travel, and how are their views listened to in the process?

David Sidebottom: In a number of ways. We carry out a national passenger survey on rail across Great Britain, which surveys 20,000-odd people every six months. In Wales specifically, we analyse the work and share that with the Welsh Assembly Government and the rail team there to make sure that they see both the journeys undertaken within Wales and also cross-border services. We have used that evidence and some additional research to try to influence the new Great Western franchise and also where the West Coast franchise overlaps with some of those services.

What we are seeing particularly is that the key drivers of satisfaction are punctuality and reliability, which are always in the top two. The interesting thing that we found out from our Great Western research was that passengers going to the south-west and on the Cardiff-Portsmouth journey were particularly interested in capacity-getting a seat on the train. That shone out as an example what passengers really want, above value for money and above punctuality.

Q8 Jessica Morden: It is difficult not to be parochial about these transport links, but in my constituency-and that of the Chair-we have the Severn Tunnel Action Group, which is a fantastic example of a campaigning passenger group.

David Sidebottom: Absolutely.

Q9 Jessica Morden: The group often speaks strongly about overcrowding and trains being at the right time, when 70% of people from the Severn Tunnel Action Group work in Bristol rather than Cardiff. Those issues come through very strongly.

May I ask Sewta and Mr Prys-Jones the same question about passenger input?

Mark Youngman: I echo what David said. In our response to the Great Western franchise, again with the support of the Severn Tunnel Action Group, we wholeheartedly agreed. We are a group that was set up when a previous franchise basically got its terms and conditions painfully wrong. We have proved that there is a demand for rail travel; not long after extra carriages have been put on, there are more instances of overcrowding. We have argued that the existing service-a train every half hour with the requisite number of seats or carriages-should cater not only for growth, for things in 10 or 15 years, but for the here and now.

Evidence has come out to suggest that the number of car journeys has reduced. We know that in the south-east and Monmouthshire, we have a high level of youth poverty, where people cannot actually afford to buy their own cars or to use them, so we are looking at other forms of transport to get them to and from work, so public transport is the way, but if they cannot get on the train or if the train fares are too expensive, what can they do?

We have been arguing that the existing level of service should actually cater not only for the growth that is there at the moment, but that we think will be there in the not-too-distant future, and should be looking far ahead-and with the potential for electrification through the Severn tunnel and on towards Cardiff and Swansea, if we ever get it. There is some suggestion that when you electrify a train service, more people come out of the woodwork to travel on it-some suggest about 4% above the normal growth figures. Now, 4% extra demand on the Cardiff to south Wales route would cause serious problems at the moment, so if those train services are electrified, we need to allow for them to grow and for more people to want to use them.

Q10 Susan Elan Jones: May I direct my question to Passenger Focus? I would like to ask about the level of satisfaction. What level of satisfaction would you consider to be acceptable?

David Sidebottom: The passengers judge that-that may be a glib answer. With cross-border journeys, passenger satisfaction is 85%, so 85% of passengers say that they are overall or fairly satisfied with the journey that they have undertaken. I am using that as a long-distance comparator to things like the East Coast railway and the West Coast franchise, but you need to drill down into what is driving that. Value for money is an area that passengers are less satisfied with, but that stands out a little from other long-distance journeys. Some of that may be to do with station conditions or railway stock conditions-I do not know-but it comes through in some of the research that only 58% of passengers are satisfied with value for money. Perhaps there is some work to be done on First Great Western. Again, that is something that we have said in our franchise submission.

Q11 Susan Elan Jones: That is interesting because, in my part of the world, as I am sure you will be aware, we had the shambles of what happened with the Wrexham and Shropshire line. This is anecdotal, but from my point of view, the level of satisfaction of people in that area was phenomenally high-and then, of course, the service just disappeared.

What was interesting about that is that, because of the nature of various other franchises, the service itself had to be a relatively slow one because there were certain routes that they could not use. However, it was still immensely popular. What about issues like crowding or comfort? Do we have a breakdown of passenger satisfaction on those areas?

David Sidebottom: Yes. We produce an autumn and spring wave of our work which we cut specifically for journeys within Wales and also Wales cross-border journeys, which we share with the train operating companies. It was something that we have worked on over the past couple of years specifically for the Welsh Assembly Government and the rail team there. Actually, we can track trends over the past five or six years, so all those factors-we have 30-odd different factors, station and on-train-can be tracked. Where possible, we can say to train operating companies such as Arriva and First Great Western, "Do you want to boost the work in some way to get even more detail within that?" We are in constant dialogue with the train operators on that.

Q12 Susan Elan Jones: So there is objective evidence, as there was about Wrexham and Shropshire?

David Sidebottom: Yes. We did one piece of work with Wrexham and Shropshire before its demise, and we could use that as a comparator. However, with operators like that-you have the same with Grand Central and the East Coast-you tend to find that there is a certain brand loyalty that develops. That comes through in the research as well.

Q13 Karen Lumley: Do passengers travelling between England and Wales face particular problems with particular services with different operators?

David Sidebottom: No, I do not think so. As always, it would be great to have the opportunity to hear from rail passengers, but ticketing is what it is. Part of the problem that we see from rail passengers with long-distance journeys is the flexibility that you sometimes lose by buying in advance. You can buy a cheap advance ticket, but as we saw in a report that we published only a couple of weeks ago about some of the impacts on passengers, they may not fully understand the terms and conditions of the ticket, and the train operating staff are perhaps less flexible than we would like when passengers have to pay a premium-the difference in ticket. Again, these are things that we have picked up as generic long-distance passenger issues, rather than it being something more of a cross-border issue.

Q14 Karen Lumley: Are there any routes where satisfaction is particularly high?

David Sidebottom: No, it is averaging out. Journeys across to London from the south and journeys up from Cardiff to Manchester and the midlands are all hovering around the mid 80% mark. It is kind of on track; it is in the mix of other train operating company specifics.

Mark Youngman: On passenger satisfaction, the point that I would make-I do not wish to denigrate the survey-is that the survey is obviously just of existing rail passengers. There are obviously lots of people out there who, for whatever reason, do not take the bus or the train. Some of it may be anecdotal, in terms of thinking that it is slower and costlier. As an example, I suffered for my sins and got the bus from Chepstow over to Bristol the other week for a meeting. The fare was £7, and we kept to time, primarily due to the driver knowing the back roads through Bristol, so that we bypassed most of the congestion on the M4 and the M5. However, the price of £7, which also included free travel in most of Bristol, was comparable to travelling in your car and coming over via the toll. Yet it struck me how many people out there know about that facility.

Equally, with the railway between Cardiff and south Wales, there are many people who are pleasantly surprised when they are told how much it costs to travel between south Wales and Bristol. Those who travel between south Wales and Bristol by car will know that if you hit Bristol at certain times of the day you are going to be stuck there for a long time, yet the train is by and large reliable in terms of knowing what time it is going to arrive.

Q15 Chair: Would anyone like to tell us if there are any particular heroes or villains? Perhaps you should tell us of the heroes and we can then work out for ourselves who are the villains.

Mark Youngman: I think that you and Jessica will know the issues with the two railway lines that exist in Monmouthshire. What has happened there is that you have franchises that are essentially controlled by two different bodies. One is very much in Wales, and the Welsh Government have invested lots in the railway service; whereas, with the English or Great Western franchise, the reason STAG was set up was because the franchise for the cross-border services was so poorly specified that it cut 50% of train journeys. Although that has been improved over the years through the good efforts of STAG and the train company, there is still the kind of view that I used to have when I worked in London-that of sitting in your ivory tower and not knowing what the issues are in Wales.

Q16 Chair: We hear that all the time on all sorts of issues.

Mark Youngman: That is why, through the efforts of STAG and Sewta and other authorities, but also working more closely with the likes of Gloucestershire, we are now sharing common aspirations. We have much better dialogue now with Gloucestershire, for example, and with the West of England Partnership and the authorities there. I had a meeting with them a couple of weeks ago about the potential impact of the decentralisation of rail services, which at the moment just applies in England but could have cross-border issues. Equally, we also do it up in Herefordshire. In the past, local authorities and Government may have had dialogue, but perhaps it is going beyond that and is now improving-and it can only improve.

Q17 Chair: Does anyone have thoughts on north Wales?

Iwan Prys-Jones: There are only two franchises to choose from. We have the West Coast franchise, where the levels of service tend to be reasonably good, but you pay quite handsomely for the service. Then we have the Wales and Borders franchise. There, echoing the points that Mark has raised, capacity is an issue on a number of services. I think especially of the services between north Wales and Manchester, where overcrowding is a real issue. The service provides not only a long-distance commuter link from north Wales to Manchester, but local services for most of the western edge of Cheshire, where the line goes through it.

The other issue-again, I pick up on a point raised by Mark-is that services do not necessarily go where people want to go. We are seeing demand from people looking for alternatives to car use, particularly for accessing employment, especially as fuel costs are increasing, as is congestion, but services, be they rail or bus, do not necessarily go on convenient routes for people to access the employment opportunities that are available.

Q18 Geraint Davies: I move on to the issue of economic development and transport. I wonder what your views are-this question is particularly for Mark Youngman-on the Severn bridge toll and the expectation of electrification, and whether there is scope for improving roads all the way to west Wales-and, indeed, rail-in order to provoke tourism and inward investment.

Mark Youngman: That is a big question.

Q19 Geraint Davies: You have two hours to answer it. Shall we start with the tolls? I know that when they took the £1 toll off the Forth bridge the traffic went up by 13% overnight. I think it is now down by 7%, which has a big impact on inward investment, trade and access to jobs across the river. Did you approve of that?

Mark Youngman: Sewta does not have a particular view on tolls, if one is honest, because in the past tolls have acted as a sort of barrier to unsustainable forms of transport and encouraged people to take the bus or the train. I remember that five or 10 years ago the train companies had a promotion: save your tolls by catching the train. They used the fact of the toll to encourage people to catch the train. If you took the tolls away, though, you would still be left with some of the transport problems once you get into Wales on the M4, and equally in England at the junction of the M4 and M5. I travelled up on the M4 on Sunday afternoon, and I was stuck in a queue coming through Bristol-albeit that was due to road works and had nothing to do with the tolls.

One might argue that there are advantages in having tolls but there are also disadvantages. We know in Monmouthshire that HGVs bypass the tolls and end up coming along the A48 through Chepstow, which adds to air quality issues in that town. Once you go further on, I would argue that tolls become less of an issue and that we have the normal transport problems-constraints on capacity, a three-lane carriageway going down to two lanes, a reduction in the speed limit and also the road problems in and around Newport and Cardiff. Although we do not suffer the congestion that London experiences, there is growing congestion in some of those big urban areas that one might argue are disassociated from the motorway and the tolls.

I mentioned earlier the potential of electrification, just to increase rail demand to beyond what existing forecasts suggest. People like new trains-there is lots of evidence on that-but they also like old trains that have been repainted and refurbished. When that occurred on the Valleys lines, with 20-year-old trains being refurbished and repainted, the demand went up-it went just like that.

Moving further west, the Sewta boundary ends at Pyle, but we can lob a brick into Port Talbot-not that we ever would throw bricks. We acknowledge that there is growing support for the city region-a greater economic powerhouse, if you like, covering not just Cardiff and Newport but stretching along the whole of south Wales. There are people who work in Cardiff and live in Swansea and further west. For my sins, I live in Neath, so I have to travel into east Wales. Equally, I know from having worked down in Pembrokeshire and Carmarthenshire how important tourism is, and I used to argue strongly that although you might be at the end of the M4, which is two and a half hours from London, you are also about three and a half hours by train from London if you so desire.

Q20 Geraint Davies: On the question of Wales having a fair share of investment, I have two quick points. The first is the view Wales should have its fair share of High Speed 2, which will be worth about £1.9 billion across Wales.

The second is on the south Wales side. You may know that the four local authorities of Pembroke, Carmarthenshire, Swansea and Neath Port Talbot have put in a joint bid to become a city region, so that theirs is not a minority view on the periphery of a massive Cardiff city region. I thought that I would drop that in, because we want our fair share rather than it all going to Cardiff. I wonder whether people generally had a view on whether there should be greater investment in Wales, with it being more evenly spread out of the capital.

Chair: We are coming to High Speed 2 in a moment, but as a general point, Mr Prys-Jones, do you think that we are getting our fair share of investment?

Iwan Prys-Jones: The recently published reprioritised national transport plan has refreshed some of the investment decisions that are being taken within Wales. Certainly from a north Wales perspective, some of our priorities in terms of rail investment have now been recognised in that NTP, and we are grateful and pleased for that. The next step will be to see the follow-on investments that will take advantage of the new infrastructure being provided on the key links, such as the redoubling of the railway line between Wrexham and Chester. We need to see what comes after that. In terms of the investment, it is hard to say that we do not get our fair share. Equally, there are significant priorities that have still to be achieved and to be delivered.

David Sidebottom: Very quickly, in terms of high-speed rail and some of the bolt-ons in terms of investment, I turn to what is happening in Manchester with the Manchester hub. It is creating a more joined up bit of rail network around Manchester, and that is going to free up into regional travel across northern England, with access to north Wales. I guess that that will be an absolute attraction in terms of giving access to five big English cities in the north. That is something else to think about.

Mark Youngman: I support what David and Iwan have said. I would argue-I must be a little bit careful-that there are some investment opportunities in England that would certainly improve the lot of the passenger and the road user in Wales, such as improving capacity on the M4 and M5 around Bristol. From a rail point of view, there is improving accessibility at Bristol Parkway and the likes of Reading-and, for that matter, the electrification of the whole of the Great Western main line from London. Although we might like it to start in Swansea and then work back towards London, it would not be that beneficial if there were problems in England and the full benefits of electrification existed only between Bristol and Swansea. That is so particularly from an international viewpoint about linking to Heathrow and the benefits that can be accrued from improving access there.

I would argue that, yes, we would all like to have more investment in transport in Wales, but we want investment in transport per se and from a national viewpoint because, at the end of the day, transport is by and large a national issue. People do not really know what the borders are when they cross over between England and Wales, so they would invariably rather see more investment in road networks and more investment in rail and bus services.

Chair: We will have to be a little more speedy, I am sorry to say.

Q21 Stuart Andrew: I had better be sure of asking my questions before Geraint in future, as he always steals them.

I have a quick question for Mr Prys-Jones on connectivity. We hear a lot about south Wales and the southern part of England, but what involvement does north Wales have with projects such as the northern hub? My recent experience of a train journey from Wrexham to Leeds was fairly horrific; it took four hours and four changes, by which time the rest of the Committee were probably nicely tucked up in bed. That seems ridiculous, given that the distance is so short. If we are to see greater economic benefits across the north, what is going on in north Wales to make sure that it benefits from any investment?

Iwan Prys-Jones: Most of our councils work under the auspices of the Mersey Dee Alliance, which, as its name suggests, focuses on the Greater Merseyside, Cheshire and north-east Wales area. The alliance has played a great role looking at the local transport links within that network. That is not to say that there is not some way to go in order to deliver effective improvements. We have some dialogue in the northern hub debate, through Cheshire in particular, but from where we are sitting it feels a little bit remote from time to time. However, as you rightly say, it has a material impact on rail services in and out of north Wales.

In one sense, we are quite grateful that there is a direct link to Manchester. We do not have direct links to Liverpool, for example, which some might say is an equally important destination, particularly given the growth of Liverpool airport. Direct rail links from north Wales to Liverpool airport is something that we would aspire to, and we are working jointly with the Mersey Dee Alliance, the Cheshire authorities and Merseytravel to try to secure improvements to the Halton curve, which would allow direct rail services from north Wales to Liverpool airport to be established.

The northern hub is an issue for us. The likelihood is that, as a result of the northern hub investment, north Wales rail services will flow to Manchester Victoria rather than Manchester Piccadilly, as they do at the moment. That will drive a coach and horses through our aspirations for improved rail links directly to Manchester airport, because the airport link goes via Piccadilly. That is a significant issue for us. We would also like to see a better understanding of what could happen in terms of rail journey times between north Wales and Manchester. If you have additional capacity in Manchester and you have scope for additional services on the key Chester to Manchester route, would it allow accelerated train services from north Wales to take place? Those are all things that we would like to see happen as a result of investment in the northern hub.

Q22 Stuart Andrew: To come on to HS2, what are the benefits that you think Wales will enjoy from HS2-if any?

Iwan Prys-Jones: It sometimes feels, in some of the dialogue that happens in Wales around HS2, that any improvements that it will bring are almost irrelevant as far as Wales is concerned, but that is certainly not the case for north Wales. It is a big ticket issue for us, because of the impact that it has on direct rail services to London, and there is scope for improvement there.

We know that there are significant capacity issues on the West Coast mainline. We have some concerns about the way that the new West Coast franchise has been structured, as it could mean that north Wales and Chester train slots are used to provide more lucrative services to Manchester or Scotland because there is a better chance of revenue generation. The franchise seems to be structured in that way. The additional capacity that HS2 will bring is something that we really welcome, but we have concerns that we will not necessarily be able to access the high-speed component because classic-compatible trains will need electrification to access their destinations, and there is no electrification west of Crewe. We also have concerns about the impact that work during the construction of HS2, particularly in Euston, will have on services during that period. Nevertheless, we generally welcome the investment and the additional capacity, and we are now looking for investment beyond HS2 that will secure opportunities for Merseyside, north Wales and Chester, to take advantage of the HS2 network.

Q23 Mr Walker: Both Taith and Sewta have plans that set out the importance of cross-border rail. Would you talk us through some of the practicalities, in terms of the mechanisms that you have in place to make sure that cross-border issues are identified and acted on?

Mark Youngman: Within Sewta, it has again been driven from the bottom up, with local groups emphasising to the local authorities and Sewta the importance of cross-border travel. For those of us who work in cross-border authorities, you should just look at the figures; the number of people who travel over towards Bristol or up towards Hereford and Gloucestershire-dare I say it?-make it a bit of a no-brainer. Although Cardiff and Newport are important because they are in Wales, the cross-border routes and the people who want to travel to work in English areas also matter, so we have incorporated that in our regional rail strategy and development. We are focusing perhaps more on the cross-border routes, the eastern bit of the region, rather than, as was previously the case, on Cardiff and Newport.

We are perhaps acknowledging that in the past the cross-border routes were not so much forgotten but were a little bit down the priority list, and whenever any opportunity arises to put the case for more services, as with the current consultation on the Great Western franchise, we must ensure that we lobby for that. Also, with the potential of the Wales and Borders franchise, when that comes up for renewal, again we must emphasise how important the cross-border routes are. We have advised on two of the cross-border routes in the Wales and Borders franchise; they are ones that are currently seeing positive growth, even though generally growth has slightly declined, whereas on the Manchester route, for example, it is quite strong and on the Gloucester to Chepstow route it is again quite strong. We must use any opportunity that arises, and also work closely with our English local authority counterparts.

Iwan Prys-Jones: At a local level, it looks reasonably good, largely because of the existence of entities such as the Mersey Dee Alliance, in which cross-border authorities in the locality came together because of a perceived gap in local liaison. The high level cross-border priorities are recognised, both in terms of passenger transport and road improvement projects. We feel that cross-border dialogue is improving, as it is at the national level as well. What still seems to be difficult from time to time is marrying the funding opportunities to deliver integrated cross-border projects.

Q24 Mr Walker: Is there anywhere you have identified a clear need for cross-border action that has not been followed? Are there any logjams?

Iwan Prys-Jones: There are a number of projects that we would like to see happen, and some of them are very significant. Whether it is a case of the projects not being progressed because of a logjam or that they are just not being progressed because there is insufficient money in the system to deliver them, irrespective of whether there is a logjam, is a moot point at the moment.

Q25 Mr Walker: Finally, what level of contact do you have with Ministers of the Welsh Assembly Government and the Department for Transport? Do you feel that you are listened to enough?

Iwan Prys-Jones: One of the advantages of working in Wales is that the lines of communication with Ministers in the Welsh Government tend to be quite close. Clearly, there is far less contact at ministerial level-in fact, virtually no contact, at least on a day-to-day basis-with Westminster.

Q26 Nia Griffith: Of particular importance is the franchise, what flexibility it has, what limitations there are, and what abuse there can be of it. One very small example is Sunday services from Llanelli; there is nothing by rail until mid-morning, which means that you cannot get to matches in London in the afternoon. Sundays have become days for matches and days for shopping, and it is the same with Boxing day. As with the instance of the M4 being crowded, no doubt more people stay away from the railways on Sundays because of the chaos that they often find. In the whole drawing up of the franchises, what has been your role? Do you think that you have sorted out the problems? What do you think are the real challenges about getting the franchises right in future?

Mark Youngman: The challenge, as Iwan said, might really come down to money, in terms of what people afford. The evidence out there shows what the demand is and what the potential demand will be if you put some of these services on, improve reliability, and actually put out some tickets that people will believe are affordable and offer good value for money. The challenge with the railways will always be funding those services.

We argued with the Great Western franchise that there needs to be a potential for the franchise to grow; it also needs to look at changing travel patterns. We put a little bit of a flyer in a curve-ball suggesting a direct service from Abergavenny, potentially back from Hereford, to London-one that also stopped at Severn Tunnel Junction, because that station, which does not have a direct train service, was identified in the top 10 destinations, including Reading and London Paddington, of people catching the train. The suggestion is that there is a demand at the moment and a latent demand from people who live in a quite large area-that of south-east Wales and also into the Forest of Dean-for whom the current rail service is not good.

I agree about Sunday services, although the rail industry has certainly got better in ensuring that there is at least a continuation of a rail service and none of this replacement by buses. I remember when I first moved to Wales that coming back of a weekend from Swansea to London would take about four hours by train.

Q27 Nia Griffith: It still does take about five hours, especially if you have to go around Kemble, Stroud and the rest. It is still a major problem. In terms of the franchise, does there need to be some mechanism in it that will allow for future changes, for growth strategies or for when new needs are identified, and how can that be built in?

Iwan Prys-Jones: One of the biggest lessons learned from the current franchise is that you need to have some mechanism to allow for growth. There is no doubt that passenger numbers have increased significantly over the life of the current franchise, and it is probably fair to say that the system is struggling to cope at the moment. Too many routes are crowded, and there are too few trains at peak times to service the demand that undeniably seems to exist out there.

Whatever happens with the new franchise, there needs to be more flexibility. That flexibility will inevitably be constrained by the cost of delivering the services, but also by the availability of rolling stock. We recommended in the documentation that we submitted to the Welsh Government that there is probably a window of opportunity now to look at the procurement of new rolling stock, ready for the renewal of the franchise in 2018; otherwise the growth in passenger numbers will continue over that period, and by the time we get to 2018 we could see far more services having significant issues and capacity problems.

Q28 Nia Griffith: Do you feel that you have had sufficient opportunity to influence the fund raisers?

Iwan Prys-Jones: We have certainly all been included in the consultation process for the franchises that are going through the renewal process at the moment. The best example is in relation to the West Coast franchise, where, to be fair to them, the Department for Transport and the operators have made efforts at least to listen and communicate with all the interested parties along the line of the franchise. Our issue is that, with regard to the West Coast franchise, north-east and north Wales are actually quite small fish compared with some of the other cities that the line serves, so our voice tends to be quite soft compared to those of some of the bigger urban areas in England and Scotland. That is partly the reason why we had concerns about the level of service that we are likely to see after the franchise is renewed, but that is not to say that people have not made efforts to come out and listen to what we have to say and to try to satisfy some of the concerns that we have elaborated.

Q29 Chair: The acoustics are quite bad in this room, Mr Prys-Jones, so feel free to speak up a little.

We will probably have to get through this quite quickly now, as we are running short of time, but did you wish to make a quick point, Mr Sidebottom?

David Sidebottom: Yes, just a quick point in terms of franchises. We work on all franchises across Britain-at the moment, there is a bow-wave of work-and we have been closely involved with the Great Western from the start. We are encouraging the bidding groups and all the franchisees to speak to likes of Severn Tunnel Action Group and all the other user groups, to get to the grass roots level as well as to the passenger research that we are putting into our responses, and it is going well.

Q30 Jonathan Edwards: The Welsh Government announced that they were cutting the north-south rail service by 50%. What impact will that have, not only on people travelling between north and south, but on those using the cross-border services, as the line obviously goes through England to get to the south?

Iwan Prys-Jones: Yes, it will clearly have an impact because there will be fewer trains. Of the two trains, the premier service express-the one that leaves north Wales in the morning to get to Cardiff by 10 o’clock-will continue, and that service is quite well used and well regarded. The fact that the return part of that service gets pushed back by two hours to 6.15 or 6.20 may be an issue, because many people who travel there for a day would want to catch an earlier train. From our perspective, we would rather see an all-day pattern of regular services, and improvements to the regular two-hourly service between north Wales and south Wales, rather than picking on individual services. The current service works fine for people who are attending a certain series of meetings, but people obviously prefer to have a little more flexibility.

One of the issues for those of us who travel regularly to Cardiff for all-day meetings is that the early evening trains out of Cardiff are particularly congested. Measures to address those issues, which would be of equal benefit to commuters from Monmouthshire up as far as Hereford, are probably as important as the number of services provided.

Q31 Jonathan Edwards: Lastly, do you think that the relationship between the Welsh Government and the DFT has improved in recent years? What more can we do to ensure that the DFT takes Welsh transport requirements into consideration?

Iwan Prys-Jones: From our perspective, we have seen some improvement in relationships. It is hard to gauge exactly the level of dialogue that takes place, because we are often not party to all of those discussions, but we are certainly aware of a number of cross-border initiatives. For example, there is direct dialogue between the Welsh Government and Merseyrail and Merseytravel at the moment, which would not have happened a year or so ago.

Q32 Chair: Mr Prys-Jones, there were a couple of specific questions to you from one of the Committee members who unfortunately has another meeting. Could we send you something in writing?

Iwan Prys-Jones: By all means.

Q33 Chair: That would be very good.

Mr Youngman, would you confirm-I find this most interesting-that official thinking among publicly funded transport organisations is that the tolls on the Severn bridge are quite a good thing in that they force people off the roads and on to other forms of transport? That is their unofficial viewpoint, is it?

Mark Youngman: It certainly is an unofficial viewpoint. Tolls are a complex issue. Tolls can be an economic barrier, as we hear with HGVs, but equally they can be a tool to encourage people to use more sustainable forms of transport.

Q34 Chair: Would organisations like yours see some benefits from tolls?

Mark Youngman: I would not want to speak on behalf of the alliance, because we have not really discussed the matter.

Q35 Chair: No. That was the impression that I had previously, but I have never been quite able to pin it down.

Mark Youngman: In many ways, it is similar to congestion charging in London. Congestion charging is a means to do something.

Q36 Geraint Davies: The impact of tolls is to push more people on the railways than on the roads, but the overall level of traffic on road and rail is down, which therefore undermines job access and inward investment. Surely that is the case. I appreciate your narrow position, representing Cardiff and railways as opposed to south Wales and the overall economy, but it must be the case, must it not, that tolls undermine overall economic activity in Wales?

Mark Youngman: I would not disagree with that, but there are other factors at play. The price of fuel is going up, and you now have many people who cannot afford to own and run a car.

Geraint Davies: So bring the tolls down.

Chair: I probably should not have opened that one up. Thank you very much, all three of you, for coming along this morning. We are very grateful.

Examination of Witnesses

Witnesses: Dr Elizabeth Haywood, Director of South East Wales Economic Forum, Dr Grahame Guilford, CBI Wales and member of the South East Wales Economic Forum Executive Board, Ian Gallagher, Freight Transport Association Policy Manager for Wales, Christopher Snelling, Freight Transport Association Head of Global Supply Chain Policy, and Robin Smith, Rail Freight Group, Welsh Representative, gave evidence.

Chair: Good morning. Thank you very much for coming along this morning. I am David Davies, the Chair of the Committee. You are quite a large panel, so please do not feel that you all need necessarily to answer all questions. We shall then get through things fairly quickly and efficiently. I shall start off by calling Geraint Davies.

Q37 Geraint Davies: I want to ask about freight, with particular interest in the Swansea-based city region-namely, the area of Swansea, Neath, Port Talbot, Pembroke and Carmarthenshire. In general, I wonder whether people felt that there should be more investment in rail and road connectivity stretching over rather than just focusing on the Cardiff area.

Dr Haywood: I am here today representing the South East Wales Economic Forum, so I am not covering that side of things, but it is clearly important for the whole of Wales that we have more investment in road and rail. It is a key part of economic development. If we do not have the right sort of infrastructure, we cannot hope to grow the economy.

Q38 Geraint Davies: I am thinking of Milford Haven, Port Talbot, Swansea and connecting them up for freight; the general question is what more could be done in terms of road and rail.

Robin Smith: Certainly one of the key issues is electrification of the south Wales main line through to Swansea; and also, within the south-east Wales area, the relief lines between the Severn tunnel and Cardiff to allow access to the existing freight terminals. It is important if you are going to have economic growth and an increased modal shift to rail that electrification should proceed right through to Swansea.

Ian Gallagher: The A40, for example, is an important link from Haverfordwest into that area. You are absolutely right in saying that if the infrastructure is poor then, unfortunately, it is going to impact on the economy of that particular region. For one thing, it is going to put off investors and businesses in those regions if they cannot get their goods to market in a reasonable time. The reality-it is slightly different the further west you go-is that the amount of traffic on the road will make upgrading the A40 to any large degree a very costly affair, but I would certainly support improvements to that particular route because it is a very slow bottleneck for HGV movements and tourist movements, certainly into that area

Q39 Geraint Davies: In addition, energy is obviously important for Tata steel and so on. In terms of the discussions that have occurred with the Wales freight strategy, can anyone shed any light on whether it has been helpful in accelerating intermodal container growth? I also wonder whether anyone has any comments to make on issues surrounding Arriva and whether Wales should have its own self-contained co-operative franchise, given that Arriva is owned by Deutsche Bahn, and Deutsche Bahn owns nearly all the freight across Europe. It seems a strange thing. Does anyone have a view on that?

Christopher Snelling: On the Arriva and Deutsche Bahn issue, we have not seen any particular correlation; they operate as fairly distinct business units, and I have not seen any evidence of that. DB Schenker are very active as one of the four main rail freight operators in the UK, and they are very competitive on that front. I have not seen anything to suggest that there is any overlap or conflict with passenger train interests within the wider group.

Q40 Geraint Davies: But should they be doing more to enable better connectivity in terms of freight in south Wales, and is Wales heading in a direction that will lose us those opportunities?

Christopher Snelling: For the rail side, what we need is better infrastructure. That is the key issue here, rather than any action of passenger train operators or whatever else it might be. There are issues about the regulatory system and ensuring that paths are compatible for the enhancements that people want for passenger services, but that does not infringe on the potential growth in freight. In the main, the way to address that is partly through improved infrastructure, because you can then do more with what you have.

Q41 Geraint Davies: In general, is there a need for a major upgrade in south Wales, in particular at the Swansea end-the west Wales end, if you like? You could argue that Wales should have £1.9 billion as its share of High Speed 2. If we upgraded the rail, road and port facilities in west Wales would it make a big difference to our economic prospects for growth?

Christopher Snelling: Yes, I believe it would, and you are right to phrase it that way because it is a package. You will want to see investment in the rail side-as Robin noted, the extension of electrification as far as that and a gauge enhancement that far, to really make use of all the potential growth in freight-but to get the best out of that, it has to be combined with spending on roads as well, to ensure that the local network is as good as possible to help support those movements generally, so that the economy can develop.

Q42 Chair: May I ask Mr Gallagher and Mr Smith why it is that the percentage of freight being moved by rail is falling in Wales, as opposed to in England?

Robin Smith: If you are picking up on the figures in the latest forecast the Rail Freight Group published last October or November, the devil is in the detail. If you look at the various breakdowns in the various commodities, the biggest contributor to the fall in traffic between 2020 and 2030 is the reduction in movements of coal, reflecting changes in power station configuration in Wales and elsewhere. However, there is significant growth balancing that in the movement of containers, both deep-sea containers and domestic containers. That is forecast, provided that the infrastructure is upgraded to take the containers. At the moment, the rail infrastructure can take the heaviest trains, and there are many trains moving on behalf of Tata using that capability, but very few lines can manage the bigger containers now used in both deep-sea and short-sea/European movements.

Ian Gallagher: We cannot ignore the economic recession; it has hit south Wales just as it has hit every other part of the UK. It is important to know that. That fall has been in correlation with the impact of the downturn in the economy as well, which proves that Wales has been particularly hard hit.

Q43 Chair: Do you have a view as to whether there would be more freight movements by rail if the Government allowed road hauliers going between rail freight terminals and final destinations the opportunity to transport heavier containers than area allowed at the moment? At the moment there is a flat limit of 44 tonnes on the road, but about 10 or 15 years ago there was an experiment where you could carry a heavier load if the majority of that journey was going to be by rail. That seemed to be quite successful in encouraging people to make greater use of the railways. Is that something that we should be looking at? Others, too, might have a view.

Christopher Snelling: We discussed this issue in the rail freight council of the Freight Transport Association, and the position is definitely that, yes, it would be an attractive way of using the regulatory system, given the constraints on public spending these days, to enhance the prospects for rail freighters, as it is the inefficiencies of that end link that hold back the growth of rail freight. Once you are moving, it is very competitive-a lot cheaper than road-but if you are still 25 miles away from where you need to be, the question is how to make it work. Yes, that would be a very attractive option to look at in more detail.

Q44 Karen Lumley: You talked about the downturn in the economy. Do you think that the Welsh Assembly Government and the Department for Transport put enough emphasis on transport links to try to get more jobs in and out of Wales?

Ian Gallagher: In Wales, particularly, there has been quite a lot of spending on the roads. Major routes, such as the heads of the valleys for example, have had quite a lot of money spent on them and the M4 is under consultation again around Newport and Cardiff, but it remains to be seen where the money will come from to take such improvements forward. The reality is this. I have always been a little sceptical about the Welsh Government’s ability to fund major projects, as money is always in short supply, unfortunately. Certainly, if I use the M4 as a good example, the options range from something like a £38 million option to something like an £800 million-odd option. I do not think that the Welsh Government have that money to spare. To be able to improve the major infrastructure, the TEN-T routes in Wales, to be honest, there needs to be better dialogue between the Welsh Government and the Department.

Robin Smith: May I go back to something that Mr Davies said earlier that we did not follow up? If you look at the reprioritised national transport plan for Wales, which was published at the back end of last year, there is not a single mention of freight. Perhaps that reflects the current priorities of the Assembly Government, because of financial constraints. The previous national transport plan made only limited references to freight, and even they have now disappeared.

Mr Geraint Davies asked about the Wales freight strategy. I was involved in what was called the Wales Freight Group, which was charged with bringing together the original strategy and then delivering it. That forum has not met in the last two years, for a number of reasons-neither the Wales Freight Group, nor the modal sub-groups that had been set up to work for it to deliver the actual individual items in the Wales freight strategy.

Q45 Nia Griffith: Following on from what you have all been saying, are there specific actions that need to be taken to maximise the economic benefit that can be gained from good road and rail access into Wales? Are there specific things that you would like to see that would make a significant impact on economic development?

Chair: That is a good question for everyone.

Dr Guilford: From a business point of view, the importance of the transport infrastructure in a peripheral country such as Wales cannot be over-emphasised, both in terms of its practical impact and also in terms of perception. If we want to attract inward investment to Wales, companies will want to know that the appropriate infrastructure is there, obviously in terms of skills but also in terms of their ability to move their supplies in and to move their products out. For us in south-east Wales, that basically means the M4 and the Great Western mainline.

It is very important that we are not seen to fall behind the rest of the UK in terms of that infrastructure, and electrification of the Great Western mainline would be a minimum for the business community, together with actions to ensure that the M4 remains a reliable transport artery. There, of course, the focus is the Brynglas tunnels where, as we saw only too graphically recently, there can be major problems.

Q46 Chair: Dr Haywood, are there any particular recommendations that you would make if you were running the Welsh Assembly Government or were in charge of the Department for Transport?

Dr Haywood: It is not exactly my place to say. The point has already been made about the small budget. It is very difficult to make the kinds of investment in infrastructure that are required for the future without making sure that the funding from the Welsh Government is actually leveraged with other funding. As far as possible, that should come from the Department for Transport, but there may be other routes to find it.

One of the suggestions that we have been looking at is the Severn bridge tolls, which have already been mentioned. At the moment, they are the highest tolls in the UK, and they cause a real problem. At some point, the bridges are going to return to public ownership. There will then be the question of what you do with the tolls. Some would like to see them go completely, but then you will have the problem of how to maintain the bridges. Where is the money going to come from? If you keep the tolls at the level at which they will presumably be when the bridges return to public ownership, the cost will still be a real deterrent, particularly for freight and for road hauliers, but also, as we have seen, with warehousing going back across the bridge to the Bristol side from the Welsh side, because it is simply not worth while being in Wales, given those costs.

There is a middle route, which is to look at how you can actually make use of those tolls, and what level you should have them at so that you can maintain the bridges. You could also have an infrastructure fund, which you could ring fence to be used for future infrastructure. That is only going to work, of course, if it is not taken off the overall capital budget of the Welsh Government. In other words, it needs to be in addition. If there is a way of setting up a ring-fenced fund that can then leverage in additional funding, it would be a way to deliver real infrastructure improvement and to take forward the ideas coming out in the Wales Infrastructure Plan, and some additional projects.

Q47 Jonathan Edwards: That is a very interesting point. As I understand it, the bridges are under the ownership of the DFT, so what you are arguing essentially is for the bridges to be devolved to the Welsh Government.

Dr Haywood: Ideally, yes, but even if the DFT has them you could still set up an infrastructure fund. However, we hear that it is highly likely that the bridges will come back to the Welsh Government when the Severn crossing comes back into public ownership.

Jonathan Edwards: That is good to hear.

Chair: That should be interesting, as one of the bridges is not even in Wales.

Q48 Mr Walker: Following on from that point, in the written evidence from South East Wales Economic Forum you say that the division of funding is not conducive to the effective delivery of transport policy. Following on from your point about the fund, do you think that there is a role there for a public-private partnership in bringing in private funding to support that kind of scheme, or do you see it as clearly being something for the Government?

Dr Haywood: We will have to be quite innovative in how we look at funding in the future. Certainly there is room for private funding in addition, but it is not purely a role for the private sector.

Q49 Mr Walker: More broadly, does anyone have any suggestions in terms of funding mechanisms that could help deal with this issue of cross-border projects not necessarily having the substantial amounts of investment that they require?

Dr Guilford: Certainly on the Economic Forum we have done some work on this. There is a recognition in Wales-we see this reflected in the recently published infrastructure plan-that we are talking about significant amounts of investment required to maintain and hopefully upgrade the system. If that investment is going to be delivered at least in part through borrowing of some kind, which almost certainly it would have to be, there have to be revenue streams available to make the interest payments and so on.

We focused on ways in which revenue streams could be delivered, and some form of charging, whether bridge tolls or road tolls, is an obvious way of doing that. The Welsh Government contracting with appropriate bodies to deliver infrastructure against future revenue payments might be another way. It is an ongoing discussion and, as Elizabeth was saying, when you couple it with drastic reductions in Welsh Government capital budgets, these are urgent discussions within Wales, and I guess that the Welsh Government would look to the UK Government to provide whatever support they could to assist in that.

Q50 Geraint Davies: In a nutshell, if infrastructure borrowing was predicated on an income stream from bridge tolls, it would mean that once the infrastructure was put in place the bridge toll could never be reduced, would it not? If it could be shown that the toll itself was a stranglehold on trade, that would be a problem. Would it not be better to get a lump of money from the Government-our fair share-and spend it on infrastructure, rather than messing about?

Dr Guilford: Getting a lump of money from the Government or from anyone else is always the preferred option.

Dr Haywood: Pigs might fly.

Dr Guilford: Of course, it is not always the available option.

Chair: That is a very interesting question.

Q51 Susan Elan Jones: A lot of your responses have been really interesting, but I think more and more that, on anything to do with cross-border matters, we have been quite badly served by the type of political discourse that we have had. On the one hand, we often see a chronic lack of sensitivity to some of the cultural issues but on the other hand, we have another lobby of people who seem to think that all these issues could be resolved-I personally disagree quite strongly with them-if they just drew up the drawbridge at Farndon. I sometimes think that cross-border issues are not actually given the importance that they deserve because of a lack of serious political discourse-but let me go back to where I should be, which is on the transport issue.

If there was one key cross-border transport improvement that you think could bring in more money and facilitate the economic growth that we badly need in Wales, what would it be?

Dr Haywood: It would be the M4; most traffic uses roads, and you are not going to get rid of that overnight. Improvements to the M4 are crucial. One of the things that you have to look at, particularly on a cross-border basis, is whether there is a perception that it is third world on either side, either on the English side or the Welsh side, and whether it actually causes a problem in terms of attracting investment.

Q52 Susan Elan Jones: Bear in mind also that we also have a border in north Wales and mid-Wales.

Robin Smith: I fully understand, as a south Wales resident, that people will speak for the M4, but my answer to your question would be electrification and gauge clearance on the south Wales mainline through to Swansea. That, too, will drive economic growth.

Q53 Chair: Perhaps the other three could give a quick-fire answer to that question.

Christopher Snelling: From a rail freight point of view, I echo what Robin has said. It is definitely right that electrification, and the gauge clearance that goes with it as far as Swansea, would be the biggest single project for enhancing rail freight use in Wales.

Q54 Nia Griffith: Would you go as far as to say that it ought to go to Milford Haven?

Robin Smith: It depends on the traffic. As with all things, it is a bit of chicken and egg. If there is no traffic at Milford Haven, would it be wise to invest in the enhanced infrastructure? If there was to be further major development at Milford Haven that required that type of movement-a container port or other investment-yes, you would need a rail infrastructure to support it. But it is a chicken and egg situation.

Ian Gallagher: I echo Elizabeth’s point on the M4. Development around Newport and Brynglas is a must; it certainly has to be done to improve traffic flows, certainly during peak times. However, you cannot understate the amount of traffic in north Wales, in that the A550 and the A55 carry more traffic than the M4. Equally, that needs to be improved. Also a point was made earlier this morning about the A55 and A483 junction. That is a definite for improvement.

Dr Guilford: The CBI has always taken the view that the M4 is the critical one, so if you could do only one then that would be it. Clearly you would not want to be in a situation where you did only one, but for many purposes the M4 is the gateway to Wales; and, exactly as Elizabeth was saying, if we get that wrong then we get a lot wrong.

Q55 Stuart Andrew: The debate on high-speed rail has had various areas of the country getting either very excited or rather anxious about it. In its written submission, SEWEF raises concerns about the possible negative impact. What would that impact be, and how might we mitigate it?

Dr Haywood: The main risk is basically around journey times. You will end up with speedier journey times in England from the core cities to London, but that will put Wales even further behind. What we gain in electrification, which is crucial, we will then lose because we will be falling back again. That, in a nutshell, is where we are.

There are some additional problems, which were cited in the Greengauge research. It says that there is definitely going to be a reduction in the employment growth rate in Wales; it estimates that there will be 21,000 fewer jobs in Wales by 2040, and it says that there will 0.04% lower annual growth and £600 per capita lower income in the same sort of time scale. That gives you a rough picture. That is where we are coming from in terms of saying that we can see some real negatives.

In terms of mitigation, one of the first and most obvious things is for the next Great Western franchisee to have to adopt timetables that will mitigate some of the negative effects of HS2. Another aspect for us is for the DFT to fund the wider valleys electrification. Philip Hammond, when he was Secretary of State for Transport, mentioned a couple of the lines north of Cardiff and spoke of valleys lines electrification. That would be great, but it will go only a small way towards what we want, which is really a suburban network.

I am speaking for South East Wales Economic Forum here, so I am not looking at north Wales, but if we are going to develop the economy in south-east Wales and around the capital city, we need to make sure that we have a suburban network that can carry that economic growth. We do not have one at the moment. We have quite a good railway system down there, but we do not have a full suburban network. Valleys lines electrification-in other words, on the wider valleys lines-will actually provide the gateway to developing the rest of that service, whether it is bus, tram or whatever. That will be crucial. Although there are others, those are the two key things that I would raise as mitigating factors.

Q56 Stuart Andrew: May I ask Mr Smith whether he thinks that there are any opportunities to get greater capacity for freight once HS2 has come about?

Robin Smith: Do you mean in the Wales context or the national context?

Q57 Stuart Andrew: Yes. Will Wales benefit in any sense? Obviously, if there is a new HS2 line, there will be opportunities for increasing freight on the old west coast mainline, for example.

Robin Smith: That is right. That is how part of the business case has been developed, but you must not forget the potential for north Wales from HS2, which was mentioned in the earlier session. That opens the question of whether electrification and gauge enhancement of the north Wales mainline might also follow. For reasons that we have discussed, we have focused on south Wales, but there is a key connectivity through Chester, both by road and rail, into north Wales, and through Holyhead to Ireland-another part of the connectivity. That can be fully exploited only with electrification and gauge clearance on the north Wales mainline, but a business case could be built on the extra capacity and the improvements brought about by HS2.

Q58 Jonathan Edwards: Just quickly on HS2, because the evidence today has been pretty interesting, there will obviously be some spin-offs but it is clearly an England-only project. If there is no Barnett consequential, does it not fundamentally distort the way that the Barnett formula works? I am just making a point to my colleagues from England.

In your evidence, both the RFG and the FTA representatives raised concerns about the relationship between the Welsh Government and the DFT. Can you elaborate on that?

Robin Smith: I do not recall raising concerns; I said that, particularly at the lower level, it seems to be working very well. I highlighted the joint allocation of freight facilities grants and modal switch grants to allow some additional freight on rail between Wales and England-the extra timber to Chirk and the new flow from Daventry to south Wales for Tesco. At that level, there is good working between DFT and the rail unit in the Welsh Government.

Q59 Chair: Is that opinion shared across the panel?

Christopher Snelling: Yes, certainly from our point of view. On the rail side, things are operated now by DFT and by Network Rail on a very open basis, and there is full room for participation from Welsh interests in that. I see it as working well at the moment.

Q60 Jonathan Edwards: Could that relationship be improved?

Christopher Snelling: No; depending on what issues you are focusing on, they are sometimes relevant to Wales and sometimes not, so they will not always be present in the room, but they do not always need to be present. As far as I can see, it is working as well as could be expected.

Q61 Jonathan Edwards: Would you outline your interactions with the Welsh Government and the DFT, and how those relationships work?

Christopher Snelling: With the DFT, there is a rail freight forum every quarter that we participate in, along with other stakeholders; but it is also worth noting that we are part of the Strategic Freight Network management group, alongside RFG and Network Rail, and the DFT would participate in that from time to time. I have contact with the Welsh Government; I work directly with my colleague Ian on that, but we have also been before a Welsh Assembly Committee several times to talk about rail issues, as well as about roads. I am sure that Ian has ongoing dialogue with the Government.

Ian Gallagher: I do, but I go back to a point that Robin made earlier. The mechanism for freight in Wales, which in my opinion worked very well, was through the Wales Freight Group. Unfortunately, as Robin pointed out, that group has not sat for two years, despite our best efforts to try to generate interest within the Welsh Government to get that forum up and running again. We are missing a really important point here, and an ability to interact with major stakeholders in Wales, by not sitting down round the table. There are efforts within the Welsh Government to look at that, but that is all they are doing. Interestingly, Carl Sargeant, the Transport Minister, has mentioned the Wales Freight Group as a mechanism for delivering freight, but I emphasise that that group has not sat for two years. It really needs to be regenerated.

Chair: Perhaps all our questions have been asked, in which case-

Q62 Jessica Morden: May I ask a further question? It is particularly for Dr Guilford and Dr Haywood. We talked earlier about one of the priorities being relief around the M4 at Brynglas. Bearing in mind what we heard, what is your most favoured solution, and how optimistic do you feel about it in view of the costs that have been mentioned?

Dr Haywood: We are in the process of consultation, so we have not yet finalised things. Ideally, we would have the M4 relief road, and there was real disappointment when that was dropped originally. It is not one of the full options in the consultation at the moment, but we are now in the process of looking at that. It is probably going to come down to the southern route, which is slightly different from the M4 relief road, but we are still looking at the other proposals. One of the issues around adding another tunnel is that there is going to be a lot of angst anyway, because it will presumably mean the compulsory purchase of quite a large number of houses, but it still will not necessarily provide us with the resilience that we require, which was so clearly highlighted when there was a fire in the Brynglas tunnels.

One of the points that we are really seriously looking into is to what level and quality any additional road will be built. At the moment, we do not have anything, so if something happens on the M4, heaven knows where you would go. There certainly is not anything of motorway quality resilience to go on to, and that is going to be quite an important part of our discussions, but we have not completed them yet.

Chair: Does anyone have further questions in the last few moments? That is not the case.

Thank you all very much indeed. I call this meeting to a close.

Prepared 5th March 2013