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1.27 pm

Earl Attlee: My Lords, I thank the Minister for introducing the debate today. For myself, I am interested in the long-term future. I do not intend to debate history. The Minister gave us a fair analysis of the history of our rail system. He also paints a picture of success, and he is right. When one looks at the graphs, they mysteriously start going in the right direction shortly after privatisation. Despite the comments of the noble Lord, Lord Bradshaw, something seems to have gone right at that point.

The Minister mentioned the InterCity express project that will be dual powered. Is he not concerned about the extra dead weight that will have to be hauled around the country? Would it not be better to fill in the gaps in electrification, as proposed by the noble Lord, Lord Bradshaw, and others?

The Minister mentioned ticketing problems. I, too, have been caught in exactly the same way at exactly the same station. What can be done in the long term to obviate the antediluvian need to buy a ticket? Does the Minister see a future for greater coverage of the Oyster card system, or perhaps something even better?

The noble Lord, Lord Bradshaw, and many others raised the issue of the 1,300 carriages. Does the Minister accept that he urgently needs to place orders to industry? If he does not, the manufacturers’ subcontractors may not exist.

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The noble Lord, Lord Rosser, made some extremely important points regarding revenue risks for the TOCs. If our worst fears were realised, something would have to be done. The TOCs are already competing on how much revenue risk they will take. If the Minister does not manage the downturn correctly, he will significantly increase the costs associated with revenue risk. I deeply regret the final comment of the noble Lord, Lord Rosser, which I did not find particularly helpful.

The nub of the problem is clear: our railway system does not have the capacity to carry even the number of passengers wishing to travel now, let alone the numbers expected in the future. The Government have accepted that demand for rail is set to grow, but seem to fail to appreciate that this trend is not only unavoidable but is welcome and is to be encouraged. When they issued the rail White Paper, the Government believed that it set out the strategic direction of the network. It was claimed:

“The White Paper looks at the potential future challenges for the railway over a 30-year horizon. It identifies three long-term agendas for Government and the rail industry working in partnership: increasing the capacity of the railway, delivering a quality service for passengers, and fulfilling rail’s environmental potential”.

At the time, many commentators complained about the paper’s paucity of ideas and its aim, in effect, simply to manage growth and restrict demand and capacity, mainly through increased fares for passengers.

I note the comments of the noble Lord, Lord Adonis, regarding the future and I wish him all the best for his work on his national network strategy group. Where we think that initiatives will make a real and positive difference, we will not hesitate to support them. We still see operational problems with Network Rail and we pray that the new year and Easter engineering fiascos are not repeated with this season’s maintenance programme. The Minister will have to pay close attention to that, and I think that he will do so.

Many in my party believe that we need a fundamental review of the structure and governance of Network Rail to ensure that it is responsive to industry, customers and passengers. We need to encourage train operators and the private sector more generally to make long-term investments. To do that they need certainty, and to deliver it a Conservative Government would review the length of franchises. Common sense suggests that franchises deliver certainty and facilitate greater levels of investment as the costs can be recouped. It is not just a matter of the capital cost of setting up the franchise but of staff training costs and, in particular, bid costs, which are very high indeed. The new southern franchise is just five-and-a-half years. Does this really make sense? We will look at franchise length, and if a longer rail franchise makes sense in terms of what the operator needs to be able to deliver, we shall have no qualms in offering it. These types of arrangements would give operators the certainty they need to deliver the investment, capacity and performance for which passengers are crying out. However, with these longer franchises, with review periods built in, would come more effective remedies to deal with an operator that fails its customers. The Minister touched on some of the actions he has had to take with regard to a below standard TOC.

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The Conservative Party has a transport team down the Corridor led by Theresa Villiers, which has been considering all these matters very carefully. It has a vision. It does not think that it is good enough for our people to have to stand on intercity journeys, nor that it is right to use short-haul aviation when we could provide a far better rail alternative given that short-haul aviation incurs high embarkation and disembarkation costs and constitutes poor use of business users’ time. Air travel does not take travellers to the heart of the city, where they generally want to be, and worst of all, short-haul is relatively more polluting than long-haul aviation, and far more so than train by orders of magnitude.

We understand the problems of the noble Lord, Lord Berkeley, and the rail freight industry. It is very hard to find extra train paths because our rail system is already running at over capacity. We do not think that it is enough to undertake some big projects, such as redeveloping Reading and Birmingham New Street stations, welcome though they are—the Minister touched on those projects in his opening comments—as we know that we will still run out of capacity if we succeed in increasing the GDP per capita in the long term. We want to bring millions of citizens in Birmingham, Manchester and Leeds closer to the centre of the UK and closer to Europe, a point made by the noble Lord, Lord Faulkner.

Lord Wallace of Saltaire: My Lords, I apologise for intervening, but is the noble Earl implying that London is the centre of the UK when he says that he wants to bring Birmingham closer to the centre of the UK?

Earl Attlee: My Lords, many noble Lords referred to the concentration of the economy in the south-east. That is what we want to avoid.

These citizens need to be connected, not just electronically but physically, if they are to reach their full potential. My honourable friends do not want them to be isolated or limited in their economic activity. Their vision is high-speed rail and I hope that, over the coming months, I can encourage the Minister to share that. I am grateful for the comments of the noble Lord, Lord Faulkner of Worcester. We disagree on some of the detail but I strongly accept the vast majority of his arguments. We on these Benches have been committed to high-speed rail for some time. The planning and tendering process will take five years, and construction a further 10; it will not be quick. However, HSR will be the age of the train yet again.

Lord Faulkner of Worcester: My Lords, I am grateful to the noble Earl for that comment. Can he confirm that his party is willing to take on board the point that I made; namely, that if the plans for high-speed rail are confined just to a line from London to Leeds and Bradford, but that the benefit would flow from having a line to Scotland, the transfer of traffic from air to rail will not be achievable?

Earl Attlee: My Lords, I fear that the noble Lord is asking me to comment in a little bit too much detail about HSR beyond Manchester.

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As noble Lords would expect, I do not agree with the objections to our thinking expressed by the noble Lord, Lord Bradshaw. It is not “either/or”, our national rail system and HSR need to be enhanced. The Government have repeatedly failed to take steps to preserve disused lines, despite many warnings from the noble Lord, Lord Faulkner, the Transport Committee and Network Rail. The Government are “keeping an open mind” on whether they should safeguard this capital stock. Perhaps the Minister could explain why the Government will not immediately adopt the Conservative proposal to impose a two-year moratorium on the sale of disused lines in order to prevent the elimination of future developments.

The Government’s continued hesitancy to consider a high-speed rail link is a continuation of a transport policy that not only fails to deliver current targets but would be completely unable to meet the needs of the future. Our railways have a proud heritage and could have a bright future, helping us to meet our climate change and economic development objectives. The next few years will be vital. We need to be imaginative about the changes that may be required to deliver this bright future. We need to harness the ambition and creative thinking that exist within the industry so that it can deliver for us all. This debate has gone one way: high-speed rail.

1.38 pm

Lord Adonis: My Lords, I have always made it a principle of action in my time in politics not to exaggerate differences or to pretend that there are differences where they do not exist. I pay tribute to the noble Earl, Lord Attlee, and his party for their marked change of tone on rail over recent months. They have become a great deal more positive about the industry and I strongly welcome that. I hope that over the months ahead it will be possible to build a consensus on a programme of improvement in the rail industry over the next 15, 20 and 25 years with the party opposite and with colleagues in the Liberal Democrats. I sense that we are converging.

My noble friend Lord Faulkner was absolutely right to say that this is a great time to be associated with the railways. He was also right to point out that we had some pretty close shaves in the 1980s with policies that would have significantly harmed the rail network to an even greater extent than happened with the changes that did take place. I remember the Alfred Sherman report, which, as my noble friend will recall, proposed concreting over the entire rail network and running buses and coaches over it. This proposal was taken seriously by so-called free-marketeers in the 1980s, even though it seemed to be from the wild west.

However, a perfectly sensible report was published, commissioned, I think, by the Department of Transport and possibly British Rail. This was the Serpell report, although it, too, proposed options that could have led to significant network cutbacks in the 1980s. I told the noble Lord, Lord Wallace, in our informal conversation before the debate, that I remember Sir David Steel—now the noble Lord, Lord Steel—making a brilliant speech after the publication of the Serpell report regarding the options that it proposed. The inquiry had put

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passenger usage numbers through a computer and had worked out that the West Highland line could stop at Crianlarich. As the noble Duke, the Duke of Montrose, is clearly aware, Crianlarich is not a great centre of population but a junction. The computer had worked out that if you stopped the line there, you might get the benefits of the traffic flows from both lines going onwards, without the expense of maintaining them. That was the kind of ludicrous planning that took place in the 1980s in some areas, which could have led to significant further cutbacks in the rail network.

As the noble Lord, Lord Wallace, said, we have a more sensible approach to transport planning. I can assure the House that not only is there a commitment in England to no network closures over the five-year period ahead—a commitment given in the rail White Paper last year—but the Scots have no intention whatever of closing the line north of Crianlarich.

Lord Bradshaw: My Lords, perhaps I may interrupt the Minister while he is doing his little historical thing about Serpell, Sherman and others. A report on electrification was also produced in 1983, which was agreed with the Department of Transport, but it was decided that its proposals would be discontinued—or rather we were ordered to discontinue them. If they had gone through, we would now have an electrified railway system for almost the whole country. Professor Alan Walters was the person who persuaded Mrs Thatcher that the report should be binned.

Lord Adonis: My Lords, that, as they say, was before my time. I welcome the fact that we appear to be forging a new consensus on rail that not only puts behind us the language of decline and past proposals for cutbacks but looks for sustained growth in the years ahead. I accept the various invitations for me to visit and to meet. I will be very glad indeed to meet the noble Lord, Lord Bradshaw, to discuss his ideas for improving the east coast main line. I always seek to give speakers a free rein and rarely intervene. I intervened on the noble Lord, Lord Wallace, because I thought that I had detected the noble Lord, Lord Bradshaw, indicating in his opening remarks that the improvement to the line could be in place of the development of a high-speed line. I was keen to understand the policy of his party, but I look forward to discussing that further when we meet.

My noble friend Lord Faulkner never hesitates to invite me to visit the many extremely worthwhile projects with which he is engaged. I look forward to joining him and his colleagues in the Cotswold Line Promotion Group to celebrate the decision to redouble that line, which will significantly enhance its capacity. I will also be happy to meet him and leaders of the railway heritage sector. I join him in paying tribute to the great work that the sector does, not least for the tourism industry. One of our unique contributions to international tourism has been the restoration of closed and disused railway lines. The work of the railway heritage sector is very important indeed.

I sense that the noble Earl, Lord Attlee, and I will need to go together to Victoria to see how long it takes us to buy a ticket. As I said in my opening remarks, I am keen to see what more we can do to ensure that

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passengers, particularly in gated stations, are able to buy tickets rapidly. I am keen to look at what further steps can be taken in that regard.

Earl Attlee: My Lords, what about the Oyster card system?

Lord Adonis: My Lords, the Oyster card system will be extended at the end of next year to cover commuter services from south London. Therefore, there will be a single Oyster card system covering all metro lines, including Underground and overground lines south of the Thames. The Mayor of London and I are working closely on this. Discussions are taking place with the relevant train operating companies to ensure that the introduction is smooth and that their commercial interests are adequately catered for. This will reduce the number of tickets that need to be bought at stations and will contribute to a better service for passengers at stations.

Earl Attlee: My Lords, I am extremely grateful for that good news. However, the noble Lord introduced the subject of ticketing and I am interested to know his thinking for the future. Will there be some point when we do not need to buy tickets at all and there will be some sort of Oyster card or automatic charging system, whereby there will be no frustrating delays for passengers when they need to buy a ticket for national journeys?

Lord Adonis: My Lords, I think that it will be quite some time before we get to that position, but we can make changes, including better ticketing machines at stations to reduce the need to queue for tickets. However, I am anxious to ensure that, when passengers need to queue, they are not inconvenienced to an unacceptable degree. I intend to look at that further in the period ahead.

Perhaps I may go to the heart of the issues that we face. I want to make two broad points. First, the current condition of the rail industry is reasonable. The noble Lord, Lord Bradshaw, is generally speaking a fair-minded person and he does not seek to paint a bleaker picture where it is not justified. However, he did so in one significant regard. He said that the big increase in rail usership in recent years had nothing whatever to do with improvements in capacity and was all to do with improvements in the economy. That is simply not the case. Because the noble Lord is far too fair-minded not even to mention the evidence against him, he did, in passing, in an intriguing part of his speech, mention the National Audit Office’s recent report on the letting of rail franchises, which was extremely positive about the way in which government policy has changed. He dismissed the report as being far too optimistic. This was the most extensive independent inquiry into the rail franchising system that there has been in recent years. It was extremely positive about the system and the improvements that had been made to the benefit of passengers. I simply suggest that the report was correct in its findings and that it was right to highlight the improvements that there have been.

There have been significant increases in the number of carriages; there are 11,150 carriages compared with 10,400 in 1995, which is a significant improvement in

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capacity. The noble Lord seemed to have forgotten that entirely when he said that there had been no improvements. The £8.8 billion of investment on the west coast main line, which has all taken place since 1997, is leading to the significant improvements in capacity that I set out in my speech, including the introduction of the new three-times-an-hour service between London and Birmingham and between London and Manchester. In historic terms, that is truly transformational. I see the noble Baroness, Lady Morris of Bolton, paying close attention to me. I know that she is a regular user of that line, as I have been to Bolton with her. Many people are not aware of how significant the improvement will be when the new timetable is fully implemented and at long last we move past the period of investment in the network, which, I well understand, has led to significant inconvenience to passengers in recent years.

Perhaps I may quote the final conclusion of the National Audit Office’s report into the letting of rail franchises between 2005 and 2007. It concludes:

“The Department’s approach to rail franchising produces generally well thought through service specifications and generates keen bidding competition. This approach has resulted in better value for money for the taxpayer on the eight franchises let since the Department took over from the”,

Strategic Rail Authority.

“The Department has been able to gain a commitment to some improvements in quality, reliability, accessibility, security and capacity at the same time as negotiating a sharp fall in subsidy. The combined contracted subsidy of £811 million in 2006-07 should turn into a payment to the Department of £326 million by 2011-12”.

That is a very positive picture of improved services that are of direct benefit to passengers.

We saw it again recently in the specification that my department issued for the new South Central franchise. This new franchise specification includes provision for: an extra 118 vehicle arrivals into central London, which is an 11 per cent increase; an additional eight arrivals into Brighton, which is a 24 per cent increase in the morning peak period; the lengthening of many suburban trains from eight to 10 carriages and some trains being lengthened to 12 carriages; increased services in the evenings and at weekends, with some later services on Friday and Saturday nights up to half-past midnight; new Sunday services, such as from Southampton to Brighton; regulated fare increases to continue to be capped at RPI plus 1; improved safety with new gating at around 30 stations and secure station accreditation to cover 95 per cent of footfall; around 1,000 additional car parking spaces and 1,500 additional cycle parking spaces; 30 additional ticket machines and help points to be installed at 20 additional stations, and station travel plans to be developed at 30 additional stations; and all trains—I repeat, all trains—to be fitted with CCTV. That is not for the medium and long-term future; it is the precise specification for the new South Central franchise and will lead to very early additional benefits for passengers over and above those that I have already described.

Taking a fair view of the debate, in my opening remarks I fully accepted that there is a great deal more to be done. My noble friend Lord Berkeley rightly picked up on the remarks that I made about Network

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Rail and the fact that there is a need to see significant sustained improvements in its efficiency—not simply to save money for the taxpayer but also to ensure a much better deal for those who use the rail network, not least the freight operators, to which my noble friend referred and on whose behalf he does an excellent job in your Lordships’ House. Taking the position as it stands, I think that it is clear that things are improving.

A number of specific points were raised. The noble Lord, Lord Wallace, asked me three questions. He asked, first, whether we are committing now to a rolling programme of electrification. The whole purpose of setting up the National Networks Strategy Group is to work through what our commitments will be, and we will be in a position to make commitments next year. We would not have set up the group if we had intended to make commitments in advance of its work. However, my right honourable friend the Secretary of State made it clear that a rolling programme of electrification is one of the key issues that we will be addressing in the strategy group. I think that the noble Lord, Lord Wallace, will clearly detect from the tone that I have adopted throughout this debate that we are very positively minded about the case for further electrification.

However, it is unlikely that any rolling programme of electrification will avoid the need for intercity diesel trains in the next generation. Therefore, the case for the Intercity Express project, which is intended to ensure that we have both diesel and electric traction capacity for the next generation, and the capacity to move between the two with minimum inconvenience to passengers, remains strong, and we will continue with that programme.

Lord Berkeley: My Lords, I am grateful to my noble friend for giving way. Has he considered, as an alternative to humping great big bits of diesel engine around under the wires, fixing a diesel locomotive on the train when it gets to the end of the wires? Very few lines in this country need the power and acceleration provided by electrification, and the trains can go fast when they get to the end of the wires. These are usually slower lines and it is probable that diesel locomotives could do the job very well.

Lord Adonis: My Lords, I understand that the alternative was fully considered when the Government took the decision to proceed with the IEP programme. For reasons of resilience and given the inconvenience that would be caused to service operators and potentially to passengers, it was decided that the bi-mode option was preferable to simply putting new diesel locomotives on to trains that had been pulled by electric traction in the earlier parts of their journeys.

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