Wednesday 24 January 2007
[Mr. Peter Atkinson in the Chair]
First Great Western
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Michael Foster.]
This is the first time that I have spoken under your chairmanship, Mr. Atkinson, and I look forward to being guided by you throughout the debate.
The debate is about First Great Western commuter services. I shall speak specifically about the services that run from Didcot Parkway railway station in my constituency, but I shall also make some remarks on behalf of other hon. Members, including my right hon. Friend the Member for Witney (Mr. Cameron) and the hon. Members for Reading, West (Martin Salter) and for Slough (Fiona Mactaggart), none of whom can be here. I also present apologies on behalf of my hon. Friend the Member for Reading, East (Mr. Wilson), who had hoped to speak in the debate but is currently stuck on a First Great Western train between Reading and Paddington. If the debate was interactive, no doubt we could receive BlackBerry text messages from him, updating us on the service.
Didcot Parkway dominates the town of Didcot. It is the reason, pretty much, for the existence of Didcot, and every day it takes thousands of passengers to London as well as taking passengers to Swindon and Bristol. In December 2005, First Great Western re-won the rail franchise for a further seven years, with the opportunity to extend it for another three. Many colleagues, from all parties, were pleased with that result. We had no reason to doubt that First Great Western would provide a good service, and many of us—[Laughter.] That is my first remark on behalf of the hon. Member for Reading, West.
I apologise to hon. Members, including the Minister, because I shall not be able to stay for the whole debate, but I did introduce an Adjournment debate last week on this issue. Some of us were very concerned when First Great Western was given the whole franchise, not simply because it was First Great Western, but because we were concerned that the concept of merging a commuter franchise with a long-distance franchise meant that commuter services would lose out, and I am sure that that is exactly what has happened.
I certainly appreciate my right hon. Friend’s point. I know that, in her constituency, the loss of the separate franchise held by Thames Trains has had a very bad effect. Speaking personally, however, I had no problem with First Great Western winning the franchise at the time.
I am most grateful to my hon. Friend for giving way, particularly as, like my right hon. Friend the Member for Maidenhead, I cannot stay for the whole debate, because of Select Committee business. I had hoped to be able to pour praise on the Minister for the announcement that he made about the potential redoubling of the Cotswold line, which could solve many of the problems in Worcestershire. I should like to express my gratitude to him at length, but I cannot do that. However, I have severe reservations about the management ability of First Great Western and, in particular, about its management of the franchise that we are debating. Repeatedly, its service between Worcestershire and London has descended into chaos, and that is true again now. The problems include very long delays, the wrong rolling stock and a timetable that does not enable my constituents, for example, to commute back to Worcester. I do not think that the company is up to the job.
I am coming to that point. I was speaking about my feelings 18 months ago. They have changed, I can assure hon. Members. At the time, the then Secretary of State for Transport, who is now the Secretary of State for Trade and Industry, shared my optimism. He wrote to me to say that
“passengers will benefit from a major increase in peak-period capacity into and out of London Paddington and a commitment to improve performance and reliability”.
He told Parliament that on both franchises the contracts would
“deliver…an improved service for passengers.”—[Official Report, House of Commons, 13 December 2005; Vol. 440, c. 142WS.]
At the time, First Great Western wrote to me, in memorable words:
“We have the experience, drive and proven track record to transform travel and we look forward to setting new standards for customer service, creating the benchmark by which all rail travel is judged”.
It has certainly done that, but not in the way it intended.
I congratulate the hon. Gentleman on securing the debate. If First Great Western is the benchmark by which other rail companies will be judged, I am sure that it is very pleased with that. Does the hon. Gentleman agree that, particularly on longer services, such as those from my area of Cornwall, customers find that refreshment services that are advertised are in fact not available for large parts of the journey? That is a particular inconvenience and could be a problem for many travellers. Does the hon. Gentleman agree that that issue ought to be addressed by the company?
That is absolutely the case. I understand that First Great Western is now also laying off some travelling chefs, and of course the trolley on commuter services is complete fiction because, as passengers are packed in like sardines, it would take a Houdini to get the trolley from one end of the train to the other.
First Great Western did carry out a consultation on the proposed new timetable that was to come into force in December 2006. The company heard from 9,500 separate correspondents, but one has to question whether it listened to a single one. One correspondent—me—wrote to the Secretary of State for Transport and to First Great Western on 5 September saying that
“one can see I think quite a big reduction in service during the peak commuting time around 0730. Between 0717 and 0748, there are currently 5 fast trains. In December there will effectively be only one. I can assure you this will lead to serious overcrowding, and would really urge you to try and insert an additional 2 fast services at this time”.
At the time, consulting only the timetable, I was blissfully unaware that shorter trains were also about to be brought into service. I met the head of First Great Western and the then Minister responsible for rail, who is now the Under-Secretary of State for Defence, the hon. Member for Halton (Derek Twigg). We saved one train, the 05.46, but nothing else was changed.
I congratulate the hon. Gentleman on securing the debate. Will he join me in condemning the decision made by First Great Western to terminate the important 15.15 service between London Paddington and Swansea at Cardiff? Unlike its fellow Welsh operators, which are doing exceptionally well, First Great Western is at the bottom of the pile. The company has had to reverse a number of timetable decisions on services in England. Does the hon. Gentleman agree that it should now do the same for Welsh customers?
I could not agree more. Since introducing the new timetable in December 2006, First Great Western has set
“new standards for customer service”
and created a new, very low benchmark by which all rail travel can be judged. To put it bluntly, since the introduction of the new timetable, commuters in my constituency using Didcot Parkway have received an abominable service. They have suffered a quadruple whammy. First, the new timetable means that there are fewer fast trains in the morning or evening. Secondly, the replacement of high-speed trains with Adelantes means that most trains arriving at Didcot are already full to the brim. Most commuters cannot get on at Didcot. If they do manage to get on, they are packed like sardines. I understand from the newspapers that the Office of Rail Regulation says that that is the safest way to travel now. Some people are even being forced to stand three to a lavatory. Thirdly, and to make matters even worse, it is now routine—a daily occurrence—for trains to be delayed or cancelled, and fourthly, to add insult to injury, all that has happened at the same time as massive fare increases and huge hikes in parking charges.
I shall give just a few specifics. There is now no train at all from Didcot to Paddington between 07.07 and 07.30. Seating capacity has been massively reduced. Some estimates are that it has fallen from 1,800 seats to just 600 at peak times. Two fast evening services from Paddington to Didcot have gone. There is barely a service between Oxford and Didcot in the morning now, and it is almost impossible to connect to any train leaving Didcot going west. For those travelling from Didcot to Swindon in the morning, the service is completely surreal. People get on the 07.41 and then have to wait at Swindon for 40 minutes to catch the 08.50. They therefore arrive at work late. If someone wants to get from Didcot to Bristol in time for work, they have to get the 06.24. A first-class season ticket now costs £6,800 a year; there has been a 15 per cent. increase this year. A second-class season ticket—now known by passengers as a “standing-class” ticket—now costs £3,800 and the price is due to rise to £4,250. Car park charges have risen by 60 per cent.
I have been an MP only for a short time, but I can assure you, Mr. Atkinson, that there are many important issues in my constituency. However, this issue has far exceeded any that I have come across. The very large bundle of papers that I am holding up represents the number of e-mails that I have received since the new timetable was introduced. It would be hard for me to exaggerate the enormous chaos that that is causing.
My hon. Friend is extremely generous with his time. I have received more than 600 e-mails from my constituents about this issue. At Paddington last night, I saw the FGW strapline, “Transforming Travel”. It has indeed, for my constituents, transformed a good, reliable service with a good choice of fast and semi-fast trains for commuting to London into a very, very bad service, with a significant reduction in the number of trains available, and overcrowding. Does my hon. Friend agree that for commuters from the Thames valley, what is crucial is increasing the number of fast and semi-fast services into Paddington so that the overcrowding can be reduced and our constituents can have a decent service to get into London?
My right hon. Friend is absolutely right. She represents her constituents, and the anger that we heard in her voice represents the anger felt by so many of them. Indeed, we need to increase not only the number of services, but the length of the trains. Quite a few commuters are returning to the car, which is not something that those of us who care about the environment want to see. Even worse, some commuters are honestly thinking of giving up their jobs, while others are even being told by their bosses that it might be better to leave.
Let me give just a flavour of some of the remarks that have been made to me over the past month. One commuter said:
“I have been commuting from Didcot for nearly 20 years—I have never been so angry that I have been forced to complain to my MP”.
“It feels as though commuters are being punished/taxed for using the railways”.
“It pains me to send an email to you for the first time in my ten year commuting career. The first two weeks of 2007 have been so appalling that I feel compelled to write to you”.
And so the comments go on.
Let me describe a typical week in the life of a commuter from Didcot. On Monday, the 7.19 was cancelled, the 7.30—the new train that First Great Western had trumpeted—was cancelled, the 7.36 was delayed until 7.54 and so it goes on. I came into the office yesterday to find a dozen e-mails from people who had seen the new 7:30 train, which was supposed to help my constituents, come into Didcot, slow down and then carry on without stopping. That was apparently because of driver diagram error, which is a new one on me. First Great Western has been fatally damaged by this chaos, and commuters now refer to it as Last Great Western or Forever Getting Worse. I suspect that there are plenty of other names, but they may be too rude for a family audience such as the one that we have with us today.
As I said at the beginning, I hope that hon. Members will indulge me while I briefly make some points on behalf of hon. Members who cannot be here. My right hon. Friend the Member for Witney wrote to me to say:
“It is clear that the punctuality of the service has deteriorated, and overcrowding has reached unacceptable levels.”
Perhaps the Minister can confirm in his reply that serious efforts will be made in the short term to achieve a marked improvement in First Great Western’s performance along the Cotswold line and that there is a real prospect of redoubling the line in the medium term.
The hon. Member for Reading, West, who, as I said earlier, was optimistic about the First Great Western franchise, wrote to the chief executive to say that he had
“lost the confidence of myself and the travelling public”.
In his letter, he raises many of the complaints that I have raised, but he also refers specifically to his concern that late-night trains no longer stop at Reading. The last train stops there at 10.30, and there has also been a reduction in the number of fast and semi-fast trains serving Tilehurst, Reading and Pangbourne.
In her note to me, the hon. Member for Slough highlighted similar issues—a reduction in service, overcrowding and worsening reliability. She says that local firms are suffering and quotes many of the e-mails from her constituents, who use phrases such as
“I am nearly at breaking point”.
She concludes by saying that
“people are paying more to get less”.
Let me return to my specific concerns about Didcot. At a time when Didcot has been designated a growth point in the south-east, when thousands of new houses are planned for Didcot and nearby Grove and when the Government say that they are committed to public transport and to getting people out of their cars, the present situation is completely and totally unacceptable. I repeat: the situation is completely and totally unacceptable, and it must be sorted out.
The great difficulty, of course, is that each side blames the other. Not to put too fine a point on it—I hope that I am not telling tales out of school—First Great Western blames the Government. It wrote to me, saying:
“the new timetable was based on the timetable specified in the Greater Western franchise bid...any timetable has to meet both Network Rail and Department for Transport specifications”.
The Government responded on 2 November. They wrote to me, saying:
“In relation to the timetable due to commence this December…I consider a reasonable balance has been struck in the level and structure of provision of train services from Didcot Parkway”.
If I were in a mischievous mood, I would put those words on a large billboard outside the Didcot Parkway station, but I would probably be responsible for starting a riot, so I will not.
In all my negotiations with First Great Western and my attempts to bring colleagues from all parties together to meet the company and sort the situation out, I have tried to avoid partisanship. However, the more I look into the situation, the more concerned I am about the effect of the Railways Act 2005, which gave the Government the power to set the timetable. Some of the current problems are the result of botched nationalisation, rather than botched privatisation, which is often the charge that Ministers make against any Conservative who takes issue with the state of the railways. I should remind hon. Members, however, that the Government have been in charge of the privatised railways five times longer than the previous Conservative Government.
In the past few days, the Evening Standard has run an important campaign on the issue. It has focused mainly on overcrowding, but it could have focused on a host of other issues, although there would have been no room in the newspaper for any other news. I was particularly taken by an article in yesterday’s edition by Christian Wolmar, the well-known transport journalist. He says, I am afraid, that
“most of the blame lies squarely with the Department for Transport and its ministers, who have been attempting to micro-manage the contract from 100 miles away…the buck stops with the Transport Secretary”.
Having had my partisan outing, I want to look ahead to see what can be done to solve the problems for my constituents and those of the dozens of hon. Members present. First, the Minister must accept responsibility for the way in which the franchise was tendered. Transport 2000, the well-known transport lobbying group, told me:
“the Government imposed a timetable and train leasing framework which involved fewer trains”.
I hope that the Minister notes the use of the word “imposed”. It is plainly silly for the Department to try to micro-manage such franchises, because they only end up taking the blame.
It is also bizarre that the specification of the timetable is kept confidential for commercial reasons when it is put out to tender. Presumably, all the train companies tendering for the specification see it, so there could be no issue of commercial confidentiality between them. It would be extremely helpful if members of the travelling public, most of whom know a great deal about the railway that they use every day, had a chance to see the tender and comment on how realistic it was.
What needs to change? First, obviously, I would like more train services. I would like to go back to the timetable before December 2006; it was not perfect, but people knew and understood it. I do not know whether, in asking for that, I am asking the Minister to wave a magic wand, but my commuters want that timetable. Secondly, the Minister must answer the charge that 32 rail carriages have been withdrawn from service at the Department’s behest. We want those carriages put back into service.
I hope that the Minister will address that point when he winds up. The root of the problem could be the attempt, certainly on the Cotswold line, to run a more intensive railway service with fewer carriages. That leads to the frequent cancellation of services and to services running with inappropriate rolling stock. It is clearly ludicrous to go back to Thames Turbos and a journey of two and a half hours between Worcester and London.
My hon. Friend makes a good point, but let me turn my fire back to First Great Western. A major contributory factor to the present situation has clearly been the extraordinary backlog of maintenance. I have no idea what is going on behind the scenes, but it is very bad. There seems to be enormous disaffection among First Great Western’s train drivers and crew, and the company really needs to get a grip on that. I am happy to concede that that is not something for which the Government can take responsibility.
On that last point, the hon. Gentleman rightly says that the buck stops with the Minister, and that is also true as regards the management of First Great Western. The Government have a real influence over the company, but there is no doubt that it has been cutting every corner that it can now that it has the franchise—it is there to make a fast buck. It is deliberately understaffing catering and claiming that crews have not turned up, when, in fact, they have not been employed in the first place. The company is also about to replace the Travelling Chef operation with a massively more expensive alternative that will not actually cater for people. Furthermore, it has withdrawn the breakfast service on the early-morning train from Cornwall: it is a bit hard to think of a train that needs that service more, given that the journey takes commuters five or six hours. The Minister can have a direct influence on all that, because he, unlike the rest of us, is uniquely able to influence the rules under which the company must operate.
They come from Cornwall, as well.
In the long term Network Rail has an incredibly important role to play in upgrading signalling, but also specifically in upgrading Reading, where I believe there is a £250 million proposal on the table. My experience of Network Rail has not been wholly wonderful. Milton Park, the business park next to Didcot, has proposed to pay for a new bridge into the business park over the railway line. Network Rail has not taken up that offer, which would not cost it a penny. It has been extremely dilatory, as far as Reading borough council is concerned, about working out what to do about Reading station. I hope that it will pull its finger out.
As I hope my opening remarks and other hon. Members’ interventions have shown, the situation as it stands is completely chaotic. In my view, the blame game should be played only so as to work out who is responsible for fixing the problem. Nine or 10 MPs of all political parties met me and First Great Western representatives 10 days ago, and we have all written to the Secretary of State and requested one crucial meeting. I hope that hon. Members who did not sign that letter but who are present for the debate will join as signatories to it. The idea is to sit down with representatives of First Great Western, the Government and Network Rail for an hour, half a day or a day—as long as it takes—to try to sort the problem out. The real frustration for Members of Parliament, where this is a constituency issue, is that whoever we meet will blame the other side. Until we have them all in a room together, telling us what is going on and what is possible, we cannot do our job as Members of Parliament, by going back to our constituents to tell them what can be changed and how we can help.
The First Great Western timetable changes were a complete shambles, and very damaging for commuters from Oxford. I congratulate my near neighbour, the hon. Member for Wantage (Mr. Vaizey), on securing the debate. As you said, Mr. Atkinson, many hon. Members want to speak, so I shall keep my remarks brief.
My first point is that First Great Western and the Department for Transport need to learn the lessons of this fiasco. Thanks to the very swift and loud reaction from people commuting from Oxford, with their petition and complaints through the media, MPs and councillors, First Great Western moved quite quickly to change the new timetable, reinstating and amending a number of services from Monday last week. That was a welcome victory for the campaign. However, if the company were really in touch with and responding to its customers’ needs, the difficulty would never have happened in the first place.
Secondly, that is not to say that services from Oxford are now perfect: far from it. According to Ox Rail Action, the changes mean that local travellers have gone from losing 80 per cent. of their seats from Oxford in the morning peak to losing 20 per cent. The hon. Member for Wantage has already made the point about connections to Didcot and services going west, which is also important.
Thirdly, there is a need for thorough, continuing monitoring of the adequacy of provision, coupled with consultation with and representation of passengers, including, as we have heard, on the matter of the future of the franchise. I hope that my hon. Friend the Minister will press First Great Western in no uncertain terms on this matter, as I have, and as I know other colleagues here this morning have. I hope that he will give us a commitment to ensure that the monitoring of services and their capacity will be made public, and that he will insist on proper consultation procedures, not just in the immediate aftermath of this row, when it is all in the headlines, but on a continuing basis.
Fourthly, capacity, overcrowding and the type of carriages that are used are a crucial aspect of the problem. One of the main complaints that I have received, after the sheer inadequacy of the new timetable that was initially proposed, was about the number of people having to stand, day after day. Standing is not acceptable on those services. People pay a lot of money for their season tickets, and they are entitled to a reasonable standard of comfort, and the opportunity to get on with some work or reading.
It is important to get those things right, and to assure people that the passengers’ voice will be heard. Everyone is mindful that there is due to be another timetable revision in December, and after what has just happened it is easy to understand why people fear the worst. The Thames valley services affect just about the most dynamic part of the UK economy; poor rail services have a very adverse impact on it.
Does the right hon. Gentleman agree that it makes no sense for First Great Western to alleviate overcrowding at one point on the line, such as Henley, by instructing that trains should not stop at another point—viz. Goring? Instead of robbing Peter to pay Paul it should lay on more services.
I absolutely agree. It is in the nature of a network and efficient commuter services—and, for that matter, efficient long-distance services—that everything is integrated and we should have a comprehensively acceptable standard of provision, rather than just shifting the problem from one place to another.
It is clear that First Great Western has lost public confidence and we need to hear from the Minister that he will insist that the quality of services and any changes to the timetable and capacity in future will put passengers’ needs first, and that his Department will be dedicated to making sure that that happens.
I would like to close by congratulating Oxford rail users and the Ox Rail Action group for the effective campaign that they have mounted. If one good thing has come out of all of this it is that there is now an organised and well supported group putting the passengers’ case. It had better be listened to, and I shall certainly join the hon. Member for Wantage and other hon. Members in taking the case to the Secretary of State.
I congratulate the hon. Member for Wantage (Mr. Vaizey) on securing the debate. I too applied for a debate on the subject and was unlucky, but the number of hon. Members here today demonstrates the strength of feeling. I thought that I had a large postbag, but clearly problems with the First Great Western franchise are much greater elsewhere.
The tale is one of unremitting misery. In my constituency First Great Western took over the old Wessex Trains franchise, which broadly covers the journey from Southampton to Bristol and sometimes Cardiff via Bath and Salisbury. The first sign of problems, as the right hon. Member for Oxford, East (Mr. Smith) hinted, was the draft timetable. At that stage the timetable was drawn up so that if one were a commuter living in a village who worked either in Salisbury or Southampton it would be necessary to get up at 6 o’clock in the morning to catch a very early train from Dean, Dunbridge or Mottisfont. It would also be necessary to stay at work for quite a long time, because, depending on where the person lived and worked, they might not be able to get back until 7 in the evening. Understandably many people were rather unhappy at being forced to stay at their workplace longer than necessary. However, the problem was worse than that because the times of trains from the villages to Salisbury, which were relied on by quite a few schoolchildren, were changed such that they would all arrive at school late.
Those concerns were raised with the Minister’s predecessor and the timetable was improved slightly, but I had the feeling then that the train franchise company had proposed the worst possible scenario, so that any small improvement could be regarded as evidence of the company listening. I do not like to think that it was that cynical. Clearly we still have a substandard service, although it is better than the one that was originally proposed. The big problem is the number of peak-time trains that were cut. Although the overall reduction in seats is only about 20 per cent., there is a 50 to 60 per cent. reduction at peak times, which is causing great problems.
Also raised with the Minister at that time were concerns that the trains in the reduced service were to be reduced from three carriages to two. That seemed particularly perverse because, only a few years before, Wessex Trains had received permission to put on extra carriages because of the demand on the line. Again, we are not learning from the lessons of the past when designing new franchises. I support entirely the call for the draft timetable to be available for public scrutiny.
The public have reacted in droves. I want to give other hon. Members the chance to speak, so I shall simply highlight what is happening by giving some typical quotes from my constituents. A few people have asked why the franchise was given to a company that admitted in writing that it did not have enough carriages to run the service. That is still the case after 12 months. Many people are concerned about fares. A number of people have been caught out by fare increases and the change in the fare structure. One constituent said:
“On the first day that the service was run by First Great Western, my fare went up as they cancelled the ‘super saver’ ticket I had always used.”
Constituents also say that overcrowding is a problem. One said:
“I have a photo of 60 people standing on a one-carriage train all the way to Bristol because the previous train had not turned up.”
Another problem with the franchise is its unreliability. Over the Christmas period in particular, a large number of trains were cancelled, simply did not arrive, or were terminated short of the expected destination.
The changes to the timetable are somewhat perverse. Many of my constituents who travel from Romsey or Southampton to Cardiff sometimes have to change trains at Bristol Temple Meads. On some services, they no longer have seven minutes to change trains because the interval between the services has been changed to three minutes. I know that we are trying to encourage the public to be healthy, but one gentleman told me about an occasion when he had to make such a connection, saying:
“I had to run down the stairs, under the tracks and up the other side to just make it as the doors closed. Anyone not fit would never have made it.”
Clearly, some common sense has to be used when the services are designed.
Several hon. Members have mentioned the problems with maintenance and the lack of rolling stock, which is something of a mystery because there seem to be carriages available. There are quite a few sitting in warm storage—I do not quite understand what that means—at Eastleigh depot, waiting to be used. I gather that there are other carriages at other depots. It has been suggested that they have been put to one side because First Great Western is struggling to meet the repayment terms of the franchise. A huge amount of money was offered for that franchise, and many people thought that the Government were benefiting at the expense of the commuter. Sadly, that seems to have been the case.
I, too, shall be brief, as other hon. Members want to speak. I congratulate the hon. Member for Wantage (Mr. Vaizey) on securing the debate.
As I am sure the Minister is aware, there was a protest on Monday in the Bristol area by commuters coming in from Bath and Somerset in which members of a campaign group called More Train, Less Strain handed out fake tickets to commuters. It is telling that First Great Western chose not to challenge the people who used the fake tickets because they realised how much uproar it would cause. The headline in the Bristol Evening Post the next day read, “Fake tickets, real anger”, which just about sums it up. There is real anger among commuters in the Bristol area about what has happened to their rail services since the December timetable was introduced. That anger drove people to stand on a railway platform at 6.30 am in the cold and dark to hand out fake tickets because they simply did not know what else to do. They ran the risk of prosecution, a £1,000 fine or imprisonment because they have reached breaking point.
The service has been appallingly unreliable since the new timetable was introduced, with delays, cancellations, short formations and overcrowding. Some of those problems were there before, but whenever I speak to First Great Western it says that they are due to maintenance problems. A new depot in my constituency at St. Philip’s Marsh is supposedly about to open, but I am told by the National Union of Rail, Maritime and Transport Workers that it still looks like a building site. We seem to be given one excuse after another.
I thank my hon. Friend and apologise for my lateness. I would have liked to speak in the debate, but the train was an hour late thanks to First Great Western, which is absolutely typical.
I have a question on the issue that my hon. Friend raises, and I disclose my interest with the RMT. There are contractual difficulties with First Great Western that need to be sorted out, but the issue that seems to be of greatest dispute with the Government is that of how many sets the company is able to run. It would be useful to know whose figures are correct, because there are significant differences between what used to run on those lines and what now runs. Will my hon. Friend comment on that?
I thank my hon. Friend for that intervention. I was about to come to that point. We had a problem in getting our heads around the issue because of what happened in the Bristol area in the 48 hours before the new timetable was introduced. The trains there had been cut, but suddenly—almost overnight—their number increased from 51 to 57 to 60, and then in December extra trains were brought in. I believe that another eight trains were borrowed on Monday from the TransPennine franchise to deal with the protest.
There is also a problem with the short formation of trains. I have been told, anecdotally, that there is a huge amount of rolling stock sitting on the sidings that could be brought into service. We need to get to the bottom of how many trains the company has access to, how much it is prepared to invest in its rolling stock and what service it can run on that basis.
The short formation of trains and the problems caused by cancellations seem to be the main issues affecting Bristol commuters, some of whom have to stand all the way to work. I accept that some people might have to stand on short journeys, but some of them are having to stand for significantly longer periods. Many people cannot even get on to the trains. Sometimes, when a train has been cancelled, eight carriages-worth of commuters—in the past, there would have been two four-carriage trains—are trying to squeeze on to a two-carriage unit, so many people are left standing on the platform. Those people rely on trains to get them to and from work every morning and evening from Monday to Friday every week; their jobs depend on it. However, they miss important meetings, they cannot pick their children up from school because they have to stay late at work, and they lose performance bonuses. To add insult to injury, they are also being asked to pay more for the service.
First Great Western owes the travelling public an explanation of why the problems are being allowed to happen. There is clearly management failure. They seem to be dealing with matters on a firefighting basis: whoever shouts the loudest suddenly gets the temporary improvement in their service. A couple of weeks ago we were told that several branch lines in Cornwall were being closed so that we could have extra trains in the Bristol area. That is good news for me as a Bristol MP, but I imagine that it is not quite so attractive to people in the Cornwall area.
After my hon. Friend the Member for Stroud (Mr. Drew) intervened, I mentioned that we have had some additional units. We want confirmation from First Great Western that those units are here to stay and that the improvement is to be permanent. We also need to know that the company is going to do more to improve the service. It may be that the franchise agreement simply is not deliverable on the current specification, but when First Great Western bid for it, it knew what it was getting into. There has been significant investment in our rail services in the past few years. First Great Western went into the franchise on the promise that it could run a decent service for commuters. If it is really saying that it cannot deliver that, it is time for it to put its hands up and say so to the public and to let someone who can run the service take over.
I congratulate my hon. Friend and neighbour the Member for Wantage (Mr. Vaizey) on securing the debate, and I apologise to the Minister and other hon. Members for being unable to stay until the end.
In the spirit of fairness, before I say what I want to say about First Great Western, I must point out that it had to make its bid against the background of a very prescribed timetable. I know that, because when the draft timetable was published a year ago, an enormous campaign began in my area of west Berkshire, which resulted in two meetings with the Minister’s predecessor and the Secretary of State. The travelling public wrote an enormous number of letters and a petition was presented to Parliament. The result was the reversal of a large number of the proposed cuts to rail services in west Berkshire. I was able to write to the Secretary of State and the Minister to thank them for their intervention. My hon. Friend’s point about our top-down and micro-managed rail service is right, but that is the end of any diversion of blame that I wish to share with the House today.
The problems that concern my constituents started on 11 December with the introduction of the new timetable. At the meeting that my hon. Friend mentioned, which took place a few yards from the Chamber last week, First Great Western’s representatives said that the same number of trains is operating throughout the franchise area now as was operating before 11 December. I wrote those words down to ensure that I remembered them correctly. If they are correct, where have all the trains gone?
The hon. Members for Bristol, East (Kerry McCarthy) and for Romsey (Sandra Gidley) referred to rolling stock that is piled up in depots. Our understanding from the meeting is that it is waiting to be fitted with the automatic train protection system, and that the timetable problems are unrelated to that stock. What has happened is that some bright spark—I say that with bitter irony—in First Great Western has decided to remove turbo trains from the two main commuter services leaving Newbury in the morning, and reduce the number of seats from 550 to about 280, by introducing those beastly Adelante trains. And the sooner we see the back of them the better.
What is happening to the travelling public in places such as west Berkshire? Increased travel times have a dramatic social effect, which we must not understate. Children see less of their parents and communities see less activity because people come home so late and so exhausted that they do not want to go out and run the kids’ soccer club. The problems have much wider impact on society in general, not just on the travelling public, but commuters face increased inconvenience and have to change trains more often to get home on time, all at a time of inflation-busting fare increases.
On the point about timetables and inconvenience, may I draw my hon. Friend’s attention to the effect of the timetable changes that were made late in the day on my constituents who attend Henley college? The timetable was changed literally a few days before the college was due to start its new term, meaning that students could not connect to Henley in time for their lessons. The college had to redraw its timetable from scratch within a few days to deal with those students.
It is a familiar story, and I have heard of similar experiences: schoolchildren from places such as Kintbury cannot now reach school on time if they travel by train, so they are either late or their parents drive them. I hope that when the Minister responds, he takes up my hon. Friend’s point. The net effect is more people on the road. I have commuters saying in droves that they are not prepared to put up with the problems and would prefer to sit in a traffic jam for two hours or get their child to school on time than to travel by train. It is a serious worry.
I shall quote one example of my earlier point. Sarah Akass is not a commuter, but her partner is. In one of the many hundreds of e-mails that I have received, she says that her partner,
“Alec now has a horrendous commute—is irritable, frustrated, spends time each day complaining to FGW (instead of doing his job and performing as he should be), we have less time at home together—and on numerous occasions caused by FGW I have to take the 1 hour round trip to Reading to pick him up… This is not sustainable”.
That is from just one of the many e-mails and letters that I have received on the subject.
I have written about the problem of overcrowding to the Office of Rail Regulation and to the Health and Safety Executive following our meeting last week. I have yet to hear from either organisation, but according to press reports it seems that, bizarrely, there are rules governing the overcrowding of cattle, sheep and pigs during transportation, but none regarding the transportation of people. In fact, the bizarre assertion has been made that in some way it is safer if people stand shoulder to shoulder rather than travel in a looser, seated arrangement. What a ridiculous statement. What a ridiculous state of affairs. The Office of Rail Regulation, the Department, the train operator and the HSE must examine it as a matter of urgency.
Finally, there is a problem of punctuality. Before the timetable change 99 per cent. of the two key morning commuter services that left from Newbury and Bedwyn were on time. Now that the services are dependent on trains that travel from the west country, 99 per cent. of them are late. That situation, when added to greater overcrowding, greater inconvenience and inflation-busting fare increases, is totally unacceptable.
I have written to the Minister asking him to examine the penalty clauses in the franchise document to see whether First Great Western has breached the terms and conditions of its contract. It is not worthy of the contract that it has been offered, and unless there are dramatic improvements in the near future, the Minister should take serious steps against First Great Western.
I welcome the opportunity that the hon. Member for Wantage (Mr. Vaizey) has offered us to debate further the failings of First Great Western. I am also grateful to him because I am now much wiser about the timetable into and out of Didcot.
Recent publicity has been about services not to Didcot, but to the Bristol and Bath areas, where serious problems continue. There are also ongoing problems in the far south-west, which is wholly dependent on good rail services for its interconnectivity with other parts of the UK.
In a recent debate in another place, Lord Davies of Oldham did not try to defend First Great Western’s performance record, because it is clearly a cause of deep concern. However, he studiously avoided clarifying whether the Department for Transport as well as First Great Western has a responsibility for the chaos. The Government have invested unprecedented amounts of money in the rail system, particularly in improving safety, and for that they should be applauded. That investment has made the network more reliable, but it has increased the use of the train as a preferred travel option. Many people also rightly use trains to avoid using cars and planes. However, the network has been unable to cope with the increase in capacity, and overcrowding on lines from Plymouth and Bristol to destinations in the north and east has reached unacceptable levels.
The problem is exacerbated by cuts in rolling stock. As the hon. Member for Romsey (Sandra Gidley) pointed out, stock has been placed in warm storage to save costs—trains have been cut in half to save money. I am advised that leasing a carriage costs roughly what it cost to build one in the 1980s, so someone is making a nice profit. I am sure that the Minister is closely examining how rolling stock leasing companies operate.
The real problem can be traced to the way in which the franchise was first awarded. I understand that to secure the bid, First Great Western committed a premium payment to the Government of about £1.3 billion over the 10-year period of the franchise. When one considers that the Government paid rail operators about £100 million to £200 million in 2005-06 for the services that the First Great Western franchise offers, one sees the scale of the financial turnaround that the company has to achieve. It can make savings only through higher fares, and we have certainly had those—fares have increased by 12 per cent.—or by reducing the number of trains, which it has done, too.
The difficulties are exacerbated by a backlog of work in First Great Western’s maintenance department, as hon. Members have already described. Add to that the way in which the timetable was changed against the wishes and the advice of a range of people who are experts in the field and it becomes clear that First Great Western’s job of meeting public expectations is almost impossible.
Plymouth city council wrote a long—seven pages—letter to the company in November 2006, flagging up a range of issues. It said:
“The City Council is…aware that some existing incumbent TOCs do not accurately or reliably collect revenue. If such inaccuracy of recording is ultimately used to develop origin and destination trends, and therefore specify service levels, such a process could inaccurately reflect actual travel patterns and demand. Such poor data recording does nothing to help support the case for additional or retention of existing service levels.”
The company has overstretched itself, but if inaccurate data were used during the franchise process, that is clearly worrying.
I am also worried about the way in which the Department for Transport engaged in the franchise process. Did it consider such issues? Was it solely interested in saving money and did it therefore turn a blind eye to the long-term implications for the travelling public in the south-west? Was First Great Western simply being wholly unrealistic? I am not clear where the blame lies, and other hon. Members here today are also confused. I would welcome the opportunity for a round-table discussion with all parties involved in order to get to the bottom of the matter.
There have been calls for First Great Western to be stripped of its franchise in the same way that Connex—with which I am very familiar, having struggled to work on its service for many years—was stripped of its franchise about five years ago. That may be an option, but the Department for Transport must also be open and honest about its part in the matter, not least because we want to avoid a further debacle when the franchise is awarded for the cross-country service. There is widespread public concern about interconnectivity between the cross-country franchise and the greater western franchise. The Minister will know about that because I have already written to him on the subject.
Failures in recent weeks have been well documented and reported in the media, culminating in a very public protest by passengers exercising their power over what is clearly an unsatisfactory service. Knee-jerk reactions from First Great Western, such as transferring stock from rural routes in Cornwall to deal with hazardous overcrowding in the Bristol area, are merely short-term solutions, and surely questions must be asked about how the current inadequate service levels were drawn up and agreed.
One of the reassurances we were given during the bid process was that difficulties with rolling stock that resulted in reductions in carriage numbers on branch lines during the busiest time of year would be resolved. We are now seeing such problems extending throughout the year. Does the hon. Lady agree that something needs to be done?
Yes, I wholly agree with the hon. Lady. She will agree, I am sure, that hitting the remote ends of the network because they seem like an easy place to make cuts—if there is such a thing—and trying to consolidate the service in the busier centre is deeply damaging to the objective 1 area that she represents.
This situation cannot continue and I would welcome an all-party, round-table discussion with all the key players, with a focus on gaining a better understanding of rail user requirements and consulting other agencies and local authorities on how to achieve customer satisfaction, balanced against getting maximum value for the resources available. There must also be far greater transparency in the franchising process.
I congratulate the hon. Member for Wantage (Mr. Vaizey) on securing the debate, and I thank him for his honesty in his reference to the botched privatisation, which drew attention to failures of the previous Government that added, in part, to some of the current problems.
In July 2000, when the Deputy Prime Minister was in charge of the railways, he said that
“we shall deliver a railway system that is better for the passengers, better for freight, better for the economy and better for the environment”.—[Official Report, 20 July 2000; Vol. 354, c. 550.]
Sadly, he and the Government have failed to deliver on that pledge. Railway services in the south-west are simply not fit for purpose. So great is the anger of people in the Bath and Bristol area, to which the hon. Member for Bristol, East (Kerry McCarthy) referred, that thousands of rail commuters, including many of my constituents, took part in a fare strike. Although I cannot condone the breaking of the law, I fully sympathise with the anger that my constituents and many in the area have about the appalling services being delivered by the Government and First Great Western.
The hon. Gentleman will be aware that, according to First Great Western, rail passenger numbers have increased by 41 per cent. in the Bristol area, but it cut the service in December. Does he accept that those of us in the Bristol area appreciate the difficulties that that poses for our constituents, as well as his constituents in Bath?
I do indeed, and I am grateful to the hon. Gentleman for making that point.
It may interest hon. Members to know what was written on the ticket handed out at the protest on Monday. The rail company was described as “First Late Western”. The class was described as “cattle truck”, the ticket type, “standing only”, the route, “hell and back”, and the price, “up 12 per cent.” In a sense, that sums up the issues of real concern to my constituents and others in the wider area. That protest, organised excellently by More Train, Less Strain, brought real concerns to the fore.
People’s concerns fall into four categories. They are concerned by the inadequacies of the timetable, which no longer meets the working patterns of many who wish to commute by rail. They are also concerned about the inadequacy of the number of carriages. We are told by First Great Western that it needs 94 carriages per day to operate the commuter services—what we used to know as the Wessex trains—and, indeed, until Monday, it did not have that full number running on any one day. We have been assured that we will get that full number, but as has already been pointed out, even if a full complement is run, fewer carriages are operating than used to. There is also the question of where those carriages come from—it is quite amazing simply to look at the signage on them.
There are deep concerns about excessive delays and cancellations and at the height of all those concerns, ludicrous fare increases were imposed. The fare from Bath to London on the high-speed train is one of the highest priced train journeys per mile in the entire world. Many of my constituents have suffered in massively overcrowded carriages and many have not even been able to get on to the trains.
We have heard about passengers, but in fairness, I should point out that many of the staff working for First Great Western are equally concerned about what has happened. A letter sent to my local paper by a ticket officer who, unsurprisingly, wanted to remain anonymous, read:
“The person selling you your ticket is appalled at the price and embarrassed about the service.
We’ve voiced our opinions repeatedly, to no avail. We’re on your side, so please, please, don’t take it out on us.”
He went on to point out that no one gets admonished for arriving late at work at First Great Western because very few of those who now work there travel to work by train. Another anonymous letter was sent by a train driver, who wrote:
“Like all the others at the moment, I am appalled at what is happening with the ‘service’ we are supposed to be providing for our customers… reduced services, lack of units, late running or just plain cancellations of services”.
The staff are appalled about the level of service as well.
The Government must take some of the blame. Over a year ago, I wrote to them detailing my concerns about the planned new timetable, and I received a letter on 9 August from the then Parliamentary Under-Secretary at the Department for Transport, the hon. Member for Halton (Derek Twigg), about Keynsham and Oldfield Park, and another letter on 13 September relating to Freshford. I had written to him expressing concern about a reduction in the frequency of trains to those stations. I got a letter referring me to table 6.112 of the franchise stakeholder consultation. My attention was drawn to the fact that the table clearly states the intention to retain an hourly frequency at both stations, and that there would also be additional hourly calls, giving two trains an hour at the stations concerned during peak periods. Those promises from the Government were not delivered. Those trains do not exist and there are greater gaps at those stations than were promised.
As I said earlier, rail services in the south-west are simply not fit for purpose, and the Government must take some of the blame for that. The hon. Member for Wantage is right to say that the buck passing has to stop. I join him and all hon. Members who have spoken in urging the Minister to agree to a meeting that will bring First Great Western, the Government and concerned Members of Parliament into one room, in which we will stay until we have sorted the matter out.
I join others in congratulating the hon. Member for Wantage (Mr. Vaizey) both on securing this debate and on the measured and fair way in which he put his argument. Given the amount of anger among our constituents, to which we have all been exposed, that was quite an achievement.
The hon. Gentleman started by saying that there was a lot of buck passing going on. I absolutely agree with him. Everyone blames somebody else. We should not try to point the finger today, but work out where we should go from here to sort the problem out. Let me give one example of the buck passing. I had a meeting with the regional manager of First Great Western in my area and the cross-Bristol franchise, to which a number of hon. Members have referred. We all know that there have been problems with maintenance. As the hon. Member for Bristol, East (Kerry McCarthy) said, we are told that the maintenance depot at St. Philip’s Marsh is not ready yet, and that neither is the stock that was taken over from the Wessex franchise, which my hon. Friend the Member for Romsey (Sandra Gidley) mentioned.
I note in this week’s edition of Rail magazine, however, which I am sure hon. Members read regularly, that Arriva Trains Wales was outraged by that suggestion. The managing director said:
“It is an outrageous suggestion and…utter rubbish. I have had no complaints about the quality or the delivery of their fleet.
We provided full availability every day in the weeks leading up to December 10.”
So why did the rolling stock that Wessex and the Welsh services were able to run reliably right up to 10 December suddenly become so unreliable? That does not add up. Again, the buck passing is not achieving anything.
The right hon. Member for Oxford, East (Mr. Smith), speaking with the authority of a former Cabinet Minister, quite properly said that both First Great Western and the Department for Transport need to learn lessons. The issue is not just about party political point scoring; the Department must take some responsibility. I fully accept that there have been management failures, as the hon. Member for Bristol, East said, but the way in which the Department has handled the franchise is a source of concern. The Minister wrote to me about those issues on 16 January, saying:
“I am determined that appropriate action is taken to ensure that the performance of these train services improves.”
However, I am not quite sure what that action is or has been. I hope that he will tell us not simply that the service is not good enough and that he wants it to be better, but what his Department is doing to put things right.
My hon. Friend the Member for Romsey raised the key issue of capacity and referred to carriages being in warm storage. One point that has not been made so far is that if First Great Western provides a service of sorts, with too few carriages, it will not necessarily fail on either its cancellation or punctuality targets. In other words, provided that the train is there with at least one carriage, the operator does not trigger either of those penalties, which would mean having to give season ticket discounts or refunds. It is therefore better financially to run such services short, with all the chaos that we have heard about.
Does my hon. Friend also condemn the warm storage of our coaches down in Cornwall, which are taken away from us and passed up to Bristol and Bath to try to fix the problem there? All my constituents and many others in Cornwall have been consigned to buses, instead of having any carriages whatever.
I can well understand the anger of my hon. Friend’s constituents about that situation. The hon. Member for Henley (Mr. Johnson) talked about robbing Peter to pay Paul. That is not a solution, although my constituents are grateful for the loan.
We have heard about the issue of the carriages and short formation. The hon. Member for Plymouth, Devonport (Alison Seabeck) made a good point, in a good contribution, about the franchise and the profits that the rolling stock companies are making. The current structure was set up by successive Governments, but my sense about the rail industry is that the rolling stock companies are, for want of a better phrase, rolling in it. A letter was sent to me in November by a customer service adviser for First Great Western, who said that
“there are simply not the carriages available”.
I just do not believe that. I suspect strongly that the carriages are available, but at a price, and that it might just not be possible to get them—other than from Cornwall, obviously—within the profit targets that First Great Western has set itself.
The hon. Lady asked a good question, however. There might be analogy, albeit a distant one, with the 3G auction of the mobile spectrum. Huge amounts of money were raised and everyone said how clever the idea was. The Government got lots of cash, but it subsequently became apparent that too much had probably been paid. Although the businesses thought that they had got a good deal, it turned out that they had not. There have been knock-on effects for the industry. I wonder whether too much was paid for the franchise, whether First Great Western was capable of delivering the services that we need, and whether those services were specified to a high enough level. I met the regional manager of First Great Western for the Greater Bristol area and the hon. Lady’s area, who said that the specification was the most basic one possible by the Strategic Rail Authority. Our constituents deserve more than the most basic possible specification of timetables and frequency. The rhetoric about public transport—about modal shift, getting people out of their cars and so on—is used all the time, but the reality is that the Government try to get away with the minimum possible service. That is not good enough.
We have heard many horror stories, which I shall not repeat. However, to cite a further example, a constituent of my hon. Friend the Member for Bath (Mr. Foster) has described a litany of problems, saying that passengers, luggage and even a wheelchair-bound passenger were packed in so tight that the guard could not get on until some of the passengers had got off. That is a complete farce. To be told then that it is safer to have people packed on than having just a few people standing is nonsense. The hon. Member for Newbury (Mr. Benyon) pointed out that there are rules for the overcrowding of cattle, but not for that of humans. That is a telling point, and action needs to be taken.
My hon. Friend the Member for Bath rightly highlighted the fact that many of the people who work for First Great Western are as demoralised as our constituents are, and we all agreed with him on that. We do not want to take out our anger on the people who work for First Great Western. I have heard directly from many people who work for the company. People love the railways—they work on them because they want to provide a superb service. They are as frustrated as anybody with the rubbish that we have now.
My hon. Friend highlighted the four key areas, including the inadequacies of the timetable. We have heard about the problems in peak time—in Didcot, in Romsey and in areas in other constituencies—which is the key time when we can get traffic off the roads. To give a parochial example, hundreds of people make the journey between Yate, which is a major town of in my constituency, and Filton Abbey Wood, which is a major employer in my constituency, as part of the Ministry of Defence. There are rail stations at the start and at the end of the journey, but lots of people drive, because they cannot rely on the trains. That is madness. I hope that the summit meeting that the hon. Member for Wantage talked about, and in which I would be happy to take part, brings the issue to a head. If all that we and our constituents have gone through in the past few weeks leads to action to get a grip on the situation, everything might not have been in vain, because action is urgently needed.
On railways policy, I have a concern about the length of the franchises that are awarded. In a debate about the failures of First Great Western, it might seem perverse to talk about longer franchises—many people would think that seven days was too long, let alone seven years. However, when franchises are awarded, do companies think that they are in it for the long haul? Do they have an incentive to buy the rolling stock rather than lease it? Longer franchises—of course with regular performance reviews, but with the fundamental assumption that a company that does a damn good job is in there for the long haul—would give the industry the stability that we all want. There should be a presumption of, funnily enough, longer franchises with proper scrutiny. The Liberal Democrats want serious action on train leasing and on the profits that the rolling stock companies are making, because there is a domino effect. The cost of leasing is exorbitant, so the companies do not lease, the service is not good enough and we are where we are today.
Call it blame or responsibility, but the focus in many quarters must be on how we tackle the problems that have arisen throughout the network and which should have been foreseen by both the operating companies and the Government.
Like so many other hon. Members before me, I congratulate my hon. Friend the Member for Wantage (Mr. Vaizey) not only on securing this debate, but on his eloquent advocacy on behalf of his constituents. That has been a feature of this debate—I was going to name all hon. Members who had spoken, but I have counted 17 contributions or interventions so far. That shows the strength of feeling about the franchise.
We had two debates on the same subject in the Chamber last year, one initiated by the hon. Member for Romsey (Sandra Gidley) and the other by my hon. Friend the Member for Totnes (Mr. Steen). In March last year I visited the constituency of the hon. Member for Plymouth, Devonport (Alison Seabeck) and other parts of the area to listen to the problems of local commuters and to discuss the issues with First Great Western management.
What has happened has not been a surprise. This debate is important on two levels. First, the service that the train users receive from First Great Western, as operated by First Group, is not satisfactory. In fact, it is so far from satisfactory that it is, to use the currently immortal phrase, not fit for purpose. However, on another level the debate is clearly about some of the key problems of the rail industry, including how it is structured. The hon. Member for Northavon (Steve Webb) mentioned the length of franchises; other problems include the level of Government intervention and how the franchising is being tendered.
Transport 2000, an independent group, has stated that rail use in the south-west and west has grown by 42 per cent. in the past decade. Yet it goes on to say that despite that categorical evidence of passenger demand, in December 2006 in the finalised timetable
“the Department for Transport’s rail group cut back rail services, taking away 32 rail carriages and with it thousands of rail passenger seats.”
During his excellent contribution, my hon. Friend the Member for Wantage said that people are extremely angry and are paying huge prices for an abominable service. He outlined the litany of performance failures. I can only say that on behalf of my constituents and myself, I am glad that I do not travel on the Didcot service. We talk about journey times decreasing; it seems extraordinary that there has been a 20-minute increase in the time that the service takes. That was cited by “The Thunderer” on Monday, the day of action. For those who do not read The Times, I should explain that “The Thunderer” is a columnist who on Monday pointed out the problems not only of delays, but of overcrowding. He specifically mentioned Oldfield Park station, where commuters had difficulty getting on the train. That underlines the consensus of feeling, which is evident not only from hon. Members here today and from “The Thunderer” in The Times. Gerry Doherty of the Transport Salaried Staffs Association union said on Monday, the day of the strike:
“Passengers have had enough of paying sky-high prices for appalling services”.
This debate has shown a clear consensus: First Great Western is not providing the service that it should. Inevitably, as predicted by Members in their letters to the Minister and by Transport 2000 and others, we are seeing overcrowding and transference away from trains across the whole area. The service being provided is in direct contrast to the needs of the commuting public and the long-distance traveller.
Does my hon. Friend think it fair or just that my constituents now have to pay £3,176 for an annual standard class ticket from Reading station in my constituency to Paddington? That is nearly £6,000 of earned income; a lot of sweat goes into earning that much money, which pays for a standard-class ticket to stand for 30 minutes on journeys to and from Paddington.
I entirely agree with my hon. Friend. I am sure that the senior civil servant who said that standing was acceptable will be regretting his remarks. Rail commuters from Reading may well want to hold him up as one of the villains of the piece.
I want to talk about long-distance as well as commuting issues, as considerable wider west and south-west needs are also involved. The corridor from the south coast to Bristol and Wales links some of the major urban settlements. Particular problems in Greater Bristol, Bath, Wiltshire and south Wales, and the line from London to the south-west peninsula, have been mentioned. The regional spatial strategy and regional economic strategy highlight those as areas of housing and economic growth. The timetabling for those areas has resulted in cuts in service, shorter and less frequent trains starting later in the morning, and longer dwell times—in complete contrast and opposition to the regional economic strategy.
This debate has shown that the plight of all travellers using Great Western since the imposition of the new timetable is simply not acceptable. No one in the Chamber is an apologist for First Group, whose performance has remained inadequate and whose punctuality remains appalling. It needs to spend money—and not a little—on taking urgent action to clear its maintenance backlog. The issue is not only that the prescribed timetable took out some of the carriages, but the huge problem of maintenance. I hear what has been said about targets, but clearing that backlog would do a lot to increase punctuality, reliability and commuter satisfaction.
First Group, in extensive negotiations with the Government, has restored one commuter service since December. It needs to restore more morning rush-hour trains and to increase the evening peak service. First Group will be listening to this debate; the message is that all those things should be done as a matter not of urgency, but of necessity.
Several Members have said that they do not want to get too involved in the blame game. As I said, First Group needs to make substantial improvements. Given what the Minister has heard from across the Chamber, he must be in no doubt that Members are clear about why the service is so poor: the problems are due principally to the Department for Transport and the prescribed franchise that it imposed on First Group. Some understanding of whom should be mentioned in the blame game is important for understanding the problems not only on this part of the network, but on the network as a whole.
It is true that the Government specified the First Group timetable that has reduced services and led to carriages being withdrawn, and that they extracted the premium from First Group that has forced fare increases. I am sure that the Minister will denounce rail privatisation, forgetting that his party has been in charge of the railways for 10 years and that usage has increased. He will remind us that he has had his brief for only four months and that the franchise re-letting took place before that.
I have had the pleasure of sparring with the Minister on transport issues since he has come to the Front Bench and I know him to be one of the good guys. However, he is a representative of the Government, who cannot escape our criticism and questioning. Our debate has proved that the villains of the piece are not only First Group, but the Government.
The Minister needs to answer a number of problems that underline not only the issues that have been highlighted today, but those for other franchises. How many civil servants in his Department are now writing timetables? How many timetables were included in the invitation to tender for the First Great Western franchise? Which franchise was chosen? Will he confirm that the Government minimum specification was involved, that the Government continue to use that process to deliver franchises, that the specified timetable reduced services and that the timetable specified the length of trains and the number of carriages to be used?
Will the Minister also confirm that between 1 April and 1 December last year, when the finalised timetable was put forward, First Group made numerous representations to the Government, seeking to alter the timetable, and that First Group has gone beyond the minimum timetable specified? Does he agree with Transport 2000’s comment in its publication “Growing the Railways” that the Government imposed a timetable and train leasing framework that involved fewer trains? Will he confirm that the timetable took 32 carriages out of service?
As I said earlier, no one here wants to be an apologist for First Group; its performance and service are unacceptable. However, the Government wrote to my hon. Friend the Member for Wantage saying:
“I consider a reasonable balance has been struck in the level and structure of provision of train services from Didcot Parkway.”
Given this debate, the Minister will surely want to recognise that that statement was at least a little early in the making. Will he reconsider it? This debate has highlighted First Great Western service issues and a number of issues in the railway system; overcrowding is easily recognised by my constituents on the South West Trains franchise from Raynes Park and Wimbledon. One of my constituents recently wrote to me about a 47 per cent. increase in fares on the Thameslink line. The Government’s micromanagement of the railways is failing.
Let us finish the debate in the same way as it has taken place, by accepting that there is blame on both parties. Even if the Minister cannot answer all my other questions, perhaps he will answer this one: having heard the speeches of the 15 to 20 hon. Members in the Chamber, will he guarantee to get the Members who have spoken on behalf of their constituents, the Department and the management of First Great Western into a room to rectify some of the timetable chaos and problems that result in human misery for the commuters who are the constituents of so many hon. Members here today? Will he agree to do that as a matter of urgency?
I, too, congratulate the hon. Member for Wantage (Mr. Vaizey). He has received many congratulations this morning; I do not expect to be the same position by the time I sit down.
I am sure that my civil servants will understand why, given the intensity of the feeling in the debate, I shall abandon my prepared comments and try to deal directly with as many comments as possible. I begin by pointing out that although I am the Minister for rail, and possibly, these days, the Minister for Westminster Hall, I am not the Minister for First Great Western. The hon. Member for Wimbledon (Stephen Hammond) said at the end of his comments that no one in this room would be an apologist for First Great Western, and he was accurate in that respect. I do not intend to be an apologist for First Great Western; it is not down to me to defend the unacceptable level of service that First Great Western has provided to its customers over the past few weeks.
First, I shall refer directly to the comments of the hon. Member for Wantage. He asked for more clarification and transparency in the franchising process. I can tell him and the Chamber that the invitation to tender for the greater western franchise will be published shortly, although I do not know in what form it will be published at the moment. However, it will be published and available for public inspection.
Talking about the First Great Western franchise, the most recent edition of Private Eye states that the other problem
“is a savage cut in the number of carriages FGW leases so that they can sit out of use in sidings—at the government’s command.”
The hon. Gentleman referred also to Christian Wolmar’s article in yesterday’s Evening Standard, where he said:
“The number of coaches leased by the company had to be cut from more than 130 to 112, forcing many services to be run with fewer carriages or be cancelled altogether.”
I am grateful for the opportunity to set the record straight. The Government have never and will never specify the number of carriages to be used in the First Great Western franchise or in any other franchise in the United Kingdom.
The responsibility for providing carriages for the services lies entirely with First Great Western and I have spoken on a number of occasions to Moir Lockhead, the chief executive of First Group, who has assured me that he will shortly issue a public apology that explicitly states that stories that have appeared in the press that suggest that the Government have anything to do with the number of carriages used in the First Great Western franchise are completely erroneous. Given the gullibility of some members of the media, it proves that a lie repeated often enough becomes received wisdom. I hope that that is clarification enough, because many Members raised that point and I wanted to put it clearly on the record—
I have seven minutes left to cover one and a half hours of intense debate. I hope that the hon. Lady, who has already made a speech, will forgive me but I do not want to give way. If I do that and do not get round everybody I could justifiably be criticised, and so I apologise.
The hon. Member for Wantage described it as “plainly silly” for the Department for Transport to try to micro-manage franchises. I totally agree with him, and that is why we do not. The hon. Member for Wimbledon asked how many civil servants are employed by the DFT to write timetables; he does not need to table a written question on that, because the answer is none.
There are far more than that number of civil servants in my Department, but none of them is tasked with writing timetables. That is a matter for train operating companies in partnership with Network Rail.
The hon. Member for Wantage referred to Labour criticisms of the “botched privatisation” of the Conservative Government. I do not know if I heard him correctly—perhaps he could confirm this from a sedentary position—but he described what happened under the Railways Act 2005 as a “botched nationalisation”.
The railways are not nationalised; they are in the private sector. The railways are provided by the private sector as specified by the Government, and that is exactly the structure that will work in the long term. In response to his request for a summit meeting, given that First Great Western has now gone on the record to accept culpability for the disastrous performance of the past few weeks, I do not at the moment see a need for any kind of summit that involves First Great Western, local MPs and the Department for Transport. Of course, I shall keep that under review but given what First Great Western has said and what I have repeated, I am not sure why the hon. Gentleman wants to sit in my office and listen to Moir Lockhead say exactly the same as he is about to say publicly.
My right hon. Friend the Member for Oxford, East (Mr. Smith) asked that the Department’s monitoring of the franchise should be made public. I reassure him that the public performance measure, which measures the performance of all the train operating companies in four-week sections over the year, is made public and published on the Network Rail website.
The hon. Member for Romsey (Sandra Gidley) talked about the timetable and the minimum specification. Once again, she will be glad to know that the invitation to tender will be published shortly by the Department. She said that First Great Western cannot afford the premium payments. Once again, a myth is starting to spread throughout the industry about premium payments and their knock-on effect on the service. A number of years ago, the railway industry was a basket case and individual franchises would never have considered paying a premium to the DFT for the privilege of running services. Now we have private companies paying money back into the public purse, and I would have thought that she would have welcomed that. The fact is that there has never been a question mark over First Great Western’s ability to pay the premium to which it is committed under the franchise. There is no question that that payment will not be made or that it cannot afford it.
My hon. Friend the Member for Bristol, East (Kerry McCarthy) talked about carriage shortages. She will be glad to know that First Great Western is about to issue an apology and explanation for what has happened on the railway. She asked about the additional units. I understand that First Great Western has provided additional units for the franchise from its TransPennine Express franchise. Although that was originally intended as a temporary measure, I am told that those units are there to stay, which will have a knock-on beneficial effect on the rest of the franchise.
The hon. Member for Newbury (Mr. Benyon) banged the drum of his party about prescribed timetables. He was disappointed, as was his hon. Friend the Member for Wimbledon, that we do not write timetables. He talked—and was absolutely correct—about the wider social impact on families. I understand the frustration of passengers using the franchise and sympathise with any family that has to suffer the inconvenience and stress of family members returning home from their journey so late that they cannot interact properly with their family. That has to be addressed and I hope that it will be addressed by First Great Western.
The hon. Member for Newbury also talked about inflation-busting fares increases. The hon. Member for Wimbledon agreed that fare increases above inflation are unacceptable. In the minute that I have left, I want to plead with the hon. Gentleman as the spokesman for his party: is he saying that capacity can be increased by x amount and that we can reduce fares at the same time—
The hon. Gentleman agreed that the price of a season ticket was too high. The Conservative party has to be realistic. It is unrealistic to say that capacity can be increased, fares can be reduced and taxes can be reduced at the same time. It is simply not credible. If we are to have a serious debate, it will have to be on a higher level than simply scoring political points on such an important issue.
The hon. Member for Bath (Mr. Foster) said that the franchises—
I am pleased to have secured this important debate on British arms exports.
I visited Angola in the autumn of 2006 with a team from Chatham house. We were reflecting on the 30 years of civil war in that country. It caused mayhem and suppressed development there, and hundreds of thousands of people died or were maimed as a result. I asked the leader of Unita and the MPLA during that tour and as many other people as I could what that war was all about. No one was able to give a proper explanation for the conflict, yet it blighted the country for more than 30 years. We know that it was a proxy for the cold war, but it was fuelled by arms exports from this country and other western countries, who kept that conflict going for many a year.
The issue is important because it centres on the fundamental integrity of this country. Our desire is to be perceived by the world as upholders of anti-corruption and anti-bribery practices. I want to concentrate on the question of arms exports. Debating time is necessarily limited today, so I have given the Minister notice of the sorts of questions that I would like to raise. I would have liked to have time to speak about export credit guarantees, the role of overseas subsidiaries, Britain’s welcome commitment and promotion of the arms trade treaty, the role of arms brokers, the impact of the millennium development goals on selling arms to developing countries, and the impact of the Export Control Act 2002 and the need to update, embellish and extend it.
Today we have an elephant in the room. It raises some serious questions about the Government’s integrity. The Department of Trade and Industry is one of a number of Departments that needs to address the issues that I have raised with the Minister and which I said were pre-eminent in the list that I presented to his office earlier this week. They were the al-Yamamah deal—the Serious Fraud Office bribery investigation that was discontinued in December—and the investigation into the air traffic control contract in Tanzania.
The hon. Member for Kingswood (Roger Berry) would like to contribute to the debate, and I want to give him some time; and my hon. Friend the Member for North Norfolk (Norman Lamb) has indicated a wish to make a short contribution on the Tanzanian deal.
I heard from the Minister’s office last night that he cannot comment on the Tanzanian air traffic control contract because the SFO investigation is still under way. I believe that he could still comment on some of the background issues without prejudicing the investigation, especially on which Ministers supported that deal and which objected when the contract was agreed. However, the message from the Minister’s office went on to say that, for similar reasons, he could not comment on the Saudi Arabian al-Yamamah deal.
I beg to differ. After all, the investigation was discontinued on 14 December last year. The DTI must recognise, as the City clearly does, that upholding the United Kingdom’s desire to be recognised internationally for integrity and for our anti-corruption stance is paramount. Attempting to hide from the issue or to sweep it under the carpet is not acceptable. The Minister should relish the opportunity to demonstrate to Parliament and to the outside world the integrity of the Government’s approach.
My noble Friend Lord Garden received a letter from the Attorney-General about the al-Yamamah deal, giving the background to the case. The letter stated:
“I should make clear that commercial considerations played no part in the SFO decision. Rather it was based on potential damage to the UK’s counter-terrorism strategy, and ultimately on the risk to the lives of our citizens and service people if the case had gone ahead. The judgment was that UK co-operation with Saudi Arabia in the counter-terrorism field is of crucial importance”.
I would be grateful if the Minister were to make clear what national security was at stake.
What evidence is there to confirm that the head of the SIS and MI6, Sir John Scarlett, endorsed the proposal to discontinue that investigation? Will the Government publish the explanation that they gave the Organisation for Economic Co-operation and Development in respect of the decision to halt the investigation? How do the Government square that decision with their anti-bribery laws and their commitment to the OECD anti-corruption convention? Does the Minister accept that, in respect of bribery and corruption, it is as important to be seen to uphold standards and pre-declared commitments as it is to uphold them? What damage would be done if the Government reversed their decision? On what grounds will the Government justify the discontinuation of the al-Yamamah bribery investigation in their report to the OECD in March?
Is it not the case that Britain’s involvement in the arms trade makes it a bigger target for terrorist attacks? Given that al-Qaeda’s stated objective is the elimination of the House of Saud, selling arms to Saudi Arabia is most likely to provoke the kind of terrorist attack that the Government claim they seek to avoid.
The Attorney-General’s letter to Lord Garden went on to say that
“Saudi Arabia is a source of valuable streams of intelligence on Al Qa’ida and other terrorist activity which may represent a threat to the UK, our citizens in the UK at home and abroad and to our Armed Forces; and that if Saudi Arabia were to withdraw that co-operation, the UK would be deprived of a key partner in our global counter-terrorist strategy.”
I question the plausibility of that claim.
It is incumbent on the Government to explain why Saudi Arabia would not wish to co-operate with the UK. Irrespective of arms or commercial dealings between the two countries, why on earth would they not want to co-operate? It is in our dual interests to ensure that that co-operation on intelligence continues. It is churlish and ridiculous to argue that, because an investigation might uncover fraud and bribery, Saudi Arabia would not wish to co-operate with the United Kingdom for its own national benefit. I seriously question that decision.
The Attorney-General’s letter continued:
“I did not consider that it was ever likely to result in a successful prosecution anyway.”
On how many occasions have the Government discontinued such an investigation on the basis of what they consider to be the public interest—before the investigation has been completed? Some serious questions clearly need to be answered. The Government diminish themselves—and worse the country—and damage their reputation as an upholder of standards and a champion of anti-corruption. A parliamentary answer provided for me on 9 March by the Minister for Climate Change and the Environment, who was the Minister for Trade at the time, states that export credit guarantees
“have been issued to BAE Systems and its subsidiaries in the last five years for the Al Yamamah contracts in Saudi Arabia.”—[Official Report, 9 March 2006; Vol. 443, c. 1722W.]
I am told that the total amount of insurance given through the scheme is £1 billion for that deal. Will the Minister tell us what financial commitments were made by the taxpayer for that contract and what public funds have been invested in that project? In addition, how much money invested to provide guarantees to the project has been recovered by the Government and how much is outstanding? There are serious questions to be raised about this issue.
In conclusion, I remind the Minister that on 9 December the Minister for Trade in the Foreign and Commonwealth Office stated at a meeting in Jordan that
“it was fitting that on the eve of this conference…Governments serious about fighting corruption now have an opportunity to sit down with one another and agree how we can work to reduce the corruption that undermines economic development, limit spending on health and education and hits the poorest people hardest”.
At the same time, the Secretary of State for International Development said in a Government press release:
“Tackling corruption wherever we find it—whether here or abroad—is essential. We will not tolerate those who extort, corrupt and deceive.”
I noted that yesterday the Director of Public Prosecutions, Sir Ken Macdonald, said when speaking to the Criminal Bar Association:
“It is critical that we understand that this new form of terrorism carries another more subtle, perhaps equally pernicious, risk. Because it might encourage a fear-driven and inappropriate response. By that I mean it can tempt us to abandon our values. I think it important to understand that this is one of its primary purposes.”
I would be grateful if the Minister would address my questions and reflect on whether the circumstances in which the decision to discontinue the investigation of the al-Yamamah deal was made have, in fact, compromised the values of this country.
I congratulate the hon. Member for St. Ives (Andrew George) on securing this debate and, like him, I will be interested in the answers to his questions; there will almost certainly not be time to answer them all, but I hope that the Government will respond in some manner.
I hope that the Government appreciate that the reason why Labour Members have been deeply disappointed by and critical of the senior fraud officer’s decision in relation to BAE Systems and Saudi Arabia is that time and time again we have acknowledged the Government’s record in strengthening arms export controls and in leading the introduction of measures to tackle bribery and corruption internationally. Therefore, I feel deep disappointment, sadness and concern about the decision made in December.
I have only three questions. First, does the Minister accept that the purpose of the Organisation for Economic Co-operation and Development convention was to prevent any signatory from using national interests as a justification for tolerating corruption? If that was not the purpose of the convention, what on earth was the purpose, and why did we regard it as such a major step forward? Secondly, does my hon. Friend accept that the early termination of this particular investigation for reasons other than the legal merits of the case sends a clear message that companies trading with our strategic allies can bribe with impunity? That is entirely contrary to the message that British defence manufacturers have repeatedly given. They support the Government’s measures to tackle international bribery and corruption because they believe that it is in the interests of British industry and jobs. Thirdly, the Government argue that they must balance the need to maintain the rule of law against the wider public interest—that is the basic justification for this decision. Does my hon. Friend agree that balance is impossible when investigations are terminated part way through? We cannot possibly know whether a prosecution would or would not have been in the public interest.
I congratulate my hon. Friend the Member for St. Ives (Andrew George) on securing this important debate and I endorse everything that the hon. Member for Kingswood (Roger Berry) has said. I will concentrate on the Tanzanian air traffic control system. Irrespective of the outcome of the investigation by the Serious Fraud Office into the deal, the granting of an export licence for this military air traffic control system is an absolute scandal. I regarded it as such at the time and I continue to be of that view. To be clear, we are talking about selling a military air traffic control system for $40 million to one of the most heavily indebted countries in the world—a country that does not have an air force worth having a name. At the time, there was no justification for the deal. The British Government and the Prime Minister knew that that was the case and yet they sanctioned granting an export licence. It is a stain on this country’s reputation that that deal was permitted.
I will focus on one particular aspect of the deal, which so far has not received much attention: the financing of it. As I have said, the deal was worth $40 million. Tanzania had to obtain approval from the International Monetary Fund to borrow the money because it was a heavily indebted country. To get approval from the IMF, it had to demonstrate that it was a concessional loan. Barclays Bank provided Tanzania with a concessional loan and so, in effect, part of the loan was a grant by Barclays to a heavily indebted country. That does not make sense. Commercial banks do not make such concessional loans so why did Barclays Bank? I asked Barclays many times when I was investigating the issue back in 2001-02, but answers were not provided. The spotlight needs to be on Barclays Bank, as well as on BAE Systems and the Government’s role in the deal.
I end by saying that the Tanzanians are now fighting back and want answers to these questions. I have a letter from the Consortium of Concerned Tanzanians International, in which they ask rather a basic question:
“How does a military radar that watches over one third of the nation help us defeat AIDS, improve our educational system and create more jobs for our young people?...The deal was not only wrong, it was unethical and indeed immoral”.
The Minister said that he cannot answer questions about that. I do not understand that as it is not sub judice. There are no legal proceedings as it is an investigation. I hope that in this debate or in writing he will be able to provide some answers.
I start in the traditional way by congratulating the hon. Member for St. Ives (Andrew George) on securing this important debate. I will widen the discussion and talk about our whole approach to export control in this area. As the hon. Gentleman said, he has asked my office a number of written questions in advance. As he has not had time to ask all of those questions, he will appreciate that I do not have time to answer them all in this brief debate.
Understandably we have talked about Saudi Arabia and Tanzania and, as hon. Members will understand, I cannot comment on either past or ongoing Serious Fraud Office investigations. The Government's decision to issue export licences for an air traffic control system for Tanzania was taken after very careful consideration of the application against the Government's consolidated EU and national arms export licensing criteria. The Government listened and responded at the time to concerns expressed in Parliament and elsewhere.
I can assure the hon. Gentleman that any applications to export to Saudi Arabia are subject to the same degree of rigorous scrutiny. However, I am afraid that I shall disappoint him and other colleagues when I say that I cannot add to the statements that have already been made about the discontinuance of the SFO inquiry. That is partly because my Department does not lead on this issue, but mainly because the Attorney-General and others have already made statements about it. It would not be appropriate for me to say any more than the Government have already said in making their position clear.
It is entirely understandable for hon. Members to be concerned about bribery and corruption. The Government share that concern and are committed to working with our international partners and the business community to ensure that there is effective action here and abroad to tackle the problem of corruption. That is demonstrated by our ratification of the OECD convention on combating bribery of foreign public officials and by the Anti-terrorism, Crime and Security Act 2001. However, there were particular issues in this case, which the Attorney-General articulated.
The Minister says that we will understand why he cannot add to the comments made by the Attorney-General or answer the questions that we have reasonably put to him, but I am not sure that I do. After all, the Minister’s comments would not prejudice an investigation that has been discontinued, so he surely has the freedom to address it without creating a sub judice situation. It is important to uphold the standards to which this country subscribes.
Of course I recognise the hon. Gentleman’s interest and concern, but my Department does not have the lead on this issue. It is a matter for those elsewhere in the Government, and the Attorney-General and others have already given the reasons. At the centre of the issue is a concern about this nation’s security in the face of terrorism, so Ministers will be understandably loth to say a great deal more.
Does the Minister acknowledge that his Department is responsible for the Export Credits Guarantee Department, which in turn has a clearly defined policy on bribery and corruption, and that some of the questions raised this morning relate to that wider Government responsibility, rather than specifically to the responsibility of the Attorney-General?
Of course we are involved in export control, and we discussed that at the Quadripartite Committee. However, the decisions in this case were, appropriately, made in other sections of the Government, in which I do not lead. As I said, issues of public security are involved, and it is sometimes difficult for Ministers to say a great deal about the intelligence. However, there will no doubt be other opportunities to raise the matter in the House.
Let me say something about the international arms trade treaty.
Of course I shall be interested to hear about the international arms trade treaty—indeed, I congratulate the Government on it, as I said at the beginning—but the fact is that some of my questions can be answered only by a DTI Minister, as the hon. Member for Kingswood (Roger Berry) made clear. They relate to the residue of funds made available through export credits guarantees in relation to the al-Yamamah deal. I do not see why the Minister cannot address those questions.
What I can say in general is that the ECGD is another arm of the Government that supports the defence industry, among a range of other customers. It operates on a break-even basis and charges sufficient premiums to cover its risks. The hon. Gentleman asked several follow-up questions about the response originally given by the Minister of Trade on 9 March 2006. I can simply confirm that the situation remains as set out in that response and I am unable to provide any further information, for the reasons stated then.
However, let me venture into other, very important territory, not least because the hon. Gentleman may want to intervene and congratulate the Government yet again. Export control is, by its very nature, an international activity. Controls stem from international agreements and the UK plays a key role in enhancing those agreements to meet the changing challenges in this area.
The Government have led calls for an international arms trade treaty, known as the ATT, to control transfers of conventional weapons. That is a cross-Government effort, and to this end the DTI is working with the Foreign and Commonwealth Office and other Departments that play a central role in export controls, notably the Ministry of Defence, but also the Department for International Development, to take that important initiative forward.
The precise content of the treaty will be a matter for negotiation, but as the former Foreign Secretary outlined in a speech in March 2005 on ATT, key elements that the UK would like to see in any treaty include the following: it should be legally binding; it should cover all conventional arms not just small arms; it should include core principles that make clear when transfers are unacceptable; and it should have effective monitoring and enforcement mechanisms.
Given the fine principles that the Minister has outlined, will he say whether he has any personal anxieties about the justification for his Department’s authorisation of the export of a military air traffic control system, which the United Nations’ own body said was not fit for purpose, to one of the most heavily indebted countries in the world?
I noted the hon. Gentleman’s remarks about the debate in Tanzania on that issue. It is a key partner in this matter and I welcome any debate in any nation about these important issues. With regard to our overall export control performance, we are doing very well in terms of how we administer it, targets and speed of dealing with applications. All the indicators are moving in the right direction. We have discussed that matter at the Quadripartite Committee and that is a notable success story of joined-up Government.
I am sorry, I cannot respond to the Minister’s jibing. He says that the UK is doing well on all the indicators. How are the Government doing with regard to export compliance and their investigations of corruption and bribery? Surely his Department must be aware that when it enters into such contracts, it endorses them, which raises questions about conventions and treaties that the Government have signed up to. What assessment have they made of that?
I have restated the Government’s absolute commitment to tackling bribery internationally. We are part of international agreements on that, but I simply repeat that the Attorney-General and others have dealt with the matter he raises: the discontinuance of the SFO inquiry. Because I am not the lead Minister on that matter, and because others have dealt with it, I cannot add to that statement, but that takes nothing away from our commitment to tackle bribery and corruption, and it takes nothing away from our commitment to develop international treaties to control arms sales in the manner I mentioned earlier, through the treaty we are seeking to develop.
It is relevant in the closing minute to say that many will already be aware that I shall be starting a review of the controls introduced in 2004 under the Export Control Act 2002. That has been timed to commence three years after the new export control legislation was implemented and it is a matter we shall discuss in Parliament, not least with the Quadripartite Committee. I look forward to engaging with colleagues on those issues in this most important area which, as we have seen during this interesting debate, properly excites much attention, and inevitably, much controversy.
Sitting suspended until half-past Two o’clock.
Thank you, Mr. Atkinson. It is a pleasure to deliver our ideas about innovation to you this afternoon. I am pleased to see here the doyens of the science and technology fraternity. There are no sisters, but the fraternity—the brotherhood—is here to ensure that we talk about science and technology at a level that is necessary to deliver the innovation and determination of economic development in this country which will not necessarily surpass but will equate with what is happening in the far east, in countries such as China and India. We are not scared pantless about that, but we do worry about how those countries are taking up the issues that we, too, have taken up. We hope that, ultimately, it will be an environment not of competition but of co-operation, in which we can learn from one another, because the science and technology community has always been international and has been very important.
I take the issue of innovation quite seriously. I do so because I heard the ambassador from the United States talking this morning on Radio 4 about innovation and because I hear Prime Ministers, Chancellors and thousands of other people talking about innovation. I have always thought that, as with the term “entrepreneurship”, when people use the term “innovation”, they do not really fully understand the process, how it works and so on. I put myself in that camp, too. That is why I have raised the issue of what innovation really means. I welcome the support that I have had from many different groups, which I shall mention in a moment. It is interesting to learn how they see innovation. They are scientific groups and non-scientific groups, but they are all people who have taken the issue quite seriously.
Of course, the Department of Trade and Industry has been the organisation in the UK that has taken up the issues, and it has produced copious documents—which spoiled my weekend. It was good that the Norwich City football game was off, because I had more time to read the documents. They are indeed copious: there are pie charts, histograms, graphs and so on. I would not want to argue with them but gosh, they are very interesting. That shows that the DTI takes the issue seriously, which means that the Government take it seriously, too. I see the Hansard reporters looking at me assiduously. They do not have to worry. They will not have to publish the whole thing—it is quite a serious tome.
What is innovation from the point of view of this country, and across the world? Ambassadors and others talk about it, and the term falls from people’s lips quite easily. Very simplistically, it is defined as the ability to translate serious ideas into products and ways of doing things that will benefit the people whom we serve, and people across the world. There are ways of measuring innovation, to which I shall come. There is great argument about how we measure innovation and whether companies and individuals understand what innovation is all about. What I am trying to say, which others will take up in specific terms, is that one size does not fit all. Innovation is not something that people are born with; it is something that they learn, accrue and can develop through their activity in this country and in other parts of the world.
There are people who I think are bona fide innovators—people who always want to change things and do things better, make products and develop things. There are people who are entrepreneurs, who want to change things and see the way forward. I do not think that people are born that way; I think that they accrue it from the world that they live in and interact with. Much research goes on with regard to the successful exploitation of new ideas. Innovation gets things done and it makes things. In this world, I have always been brought up to think that if we do not innovate, we die. That was the phrase for years and years—innovate or die. It probably emanated from US culture, which is gung-ho in many ways, but successful in many other ways, too. We have learned lessons from that.
The differences that we can make in the world—innovation is part of this—are either small, incremental things or large paradigm differences. There are Nobel prize-winning ideas, which make amazing changes, and there are the little things that individuals do in their lives that make things different, not just for them but for the people with whom they interact. Innovation is very important because UK plc depends on it, as has been acknowledged by the DTI and the Government as a whole. We need to survive in what is now, sometimes, a vicious, competitive global environment, which is growing. We hope that it will not be that way and that there will be more interaction, but things are not often put forward in that way or in that language.
Innovation includes many things. In business, it includes products and services, but it includes many other things, too. Nothing can be more important than climate change, as we know, and the new technologies and how we develop them and encourage an environment in which they are developed in order to change the world for everyone’s benefit.
The situation is the same in the health service, and I shall talk more about that later. A report that has just been published by the National Endowment for Science, Technology and the Arts shows that innovation takes place without us even knowing that it is taking place. It is not planned; it just happens because some people are naturally like that. They find new ways of doing things.
I came to this debate having spent a day in the bath—well, an hour or so in the bath—thinking about what innovation meant. I remember simple, daft things such as pipetting things with your mouth. Sometimes you got a slurry of acid in your mouth, and suddenly I thought, “There must be another way to do this”—to suck fluids up into a pipette.
My hon. Friend has also had a mouthful of acid in his time, or alkaline. I welcome the fact that many of us, in our professional lives, have been through the process of doing things in different ways and saying, “Gosh, why didn’t we do that?”, “How did that idea come about?” and “Why didn’t we develop that?” The world is like that, and we should welcome and encourage such activity. No one mouths pipettes any more; there are now good instruments to suck things up accurately without the need for that. People may wonder why that was not possible before, and there is a real issue about how we get innovation into our world.
New challenges arise. My right hon. Friend the Prime Minister has said in relation to information technology and computers that we need new ways of doing things, so that there is interaction between Departments—so that the press of a button suddenly acknowledges the fact that people have similar problems and they can interact and make things happen that did not happen before. We are encouraging new technology in that respect and making that happen. My hon. Friend the Minister and the rest of us will acknowledge how very difficult it is to make it happen. We want to ensure that the environment and the circumstances are right, so that we can interchange such information.
The health service provides an example. I have had reports and I am very grateful to the many people who have put ideas to me about health services and whether we are innovating to the extent that we should be. An organisation representing the pharmaceutical industry has said, “We’re not really up to what they do in America.” There are criticisms, under the surface, of doing things better. I think that, in relation to innovation, we always have to admit that there might be another way of doing it and we ought to encourage people or individuals to think about that. I shall talk about the processes involved in how it might happen.
I am also very grateful to the Design Society, which says, “It’s great to have new products, but why do we not think of design at the same time?” It says, “It’s great having a wine glass that’s a certain shape, but how do we design that shape?” It is not just a question of functionality or of having something that we can put something in—things have to look good too. The process is a matter not just of designing the product, but of designing it well, and I shall talk later about countries such as Finland, which have taken up that major issue. I am grateful to the Design Society for saying what it has.
I am also grateful to the Royal Society of Chemistry for saying that innovation is important in its world. Indeed, it has produced documents to show the interaction that takes place not only in Britain—I shall talk in a second about who interacts in this country—but across Europe and the world. The excitement of chemistry—or whatever the science involved—and of developing new products in the light of what people do or do not know is important. That is all part of the innovatory process.
I have combed the DTI website, and it really is hard work to get through the initiatives that the Department employs to handle some of the problems. Before I come to that, however, let me say that, underlying all this innovation, is the post-neoclassical endogenous growth theory. Hon. Members may not instinctively understand the connection, so let me explain it briefly—besides talking about the Norwich football team, the Economic Secretary to the Treasury and I spend hours discussing post-neoclassical endogenous growth theory at Carrow Road football ground.
Speaking of the theory, Michael Heseltine, who was a right hon. Member of this House at one time, said:
“It’s not Brown’s. It’s Balls.”
Hon. Members will remember that clever quote. The theory, which took over from neoclassical theory, was an attempt to engage with the origin of growth and ideas and to see how we could make the economy grow. It required that policies had a long-run growth rate in the economy and did not engage aggregate savings. It saw subsidies for research and development and for education increasing the growth rate in an endogenous way by—this is the main point for our debate—increasing the incentive to innovate. That amazing idea, which linked those areas with the economy, is now pervasive in the Treasury.
Of course, there are many critics of that theory. One of its failings is that it does not explain non-convergence and why some countries are much richer than others. Exogenous growth theory explains the income divergence between the developing and developed worlds, but post-neoclassical endogenous growth theory has still not come to terms with that divergence. However, that is a bit beyond the scope of this debate, although it is fine for Oxford, Cambridge and other places to debate it. I simply make the point that innovation is all part of the theory, and we should remember that when serious politicians talk about innovation.
I am very interested in the DTI’s point of view because it has published much serious work on this issue. I have been reading its work—letter by letter, page by page—since its 2003 report. I pay credit to those who produced that report, and some of them are probably surreptitiously in the room. They have seen that innovation is very much part of developing business and markets and that it provides the products. They have also seen that we need to invest in research and to have a knowledge-based economy. All those phrases fit together around the word “innovation”. I agree with the DTI that Britain is much more innovative than it is has ever been. The report shows how many graduates there are in different parts of the country and it makes it clear that university education plays into and encourages innovation, with university degrees promoting innovative, active enterprises.
Of course, universities are supposed to interact with business, but there is a problem there. I have looked at the report, and elements of that interaction are beginning to take place. However, the academic people to whom I talk despise business; they believe that working with it amounts to getting their hands dirty and that they should not get involved with it. I am old enough to remember a culture in which Nobel prizes were the thing—indeed, they still are in many places—but there has been a sudden change in that culture. People are saying to themselves, “Maybe this thing we are doing in the laboratory is marketable.” That idea has suddenly taken hold among some people, but it is not pervasive enough. Many of us in the room have worked in laboratories, and we must have done something innovative every day of our lives when carrying out experimentation, collecting data and managing things. We did not write those things up in academic papers, but they were always clever little things. I remember people saying, “That’s a clever way to do it. Why did you think of that?” and someone else saying, “It just seemed natural.” However, people did not think that such things were marketable and patentable or that what was going on would improve the process.
Things are better now, however, and there are more patents; indeed, that is one way of measuring innovation, but it is not the only way. On this small island of ours, there are thousands of people doing smart things all the time in their jobs. I am talking not just about the academic elite, but about the financial quarter and the health service. People are not doing anything formal, but they are making a difference to how things are measured. However, they do not even know or care that they are being innovative, and that is the problem. The DTI is talking about innovation and is trying to measure it, but the problem is how we get to the reality to see what is happening out there and what people are doing.
Perhaps I could bring the hon. Gentleman back to his post-neoclassical endogenous growth theory and his point about universities.
Well, I think that the hon. Gentleman is making an incredibly important point. Will he comment on the disincentives to universities becoming involved in knowledge transfer and translational research, because the underpinning grant system goes in the opposite direction from encouraging such involvement? Universities see citations and publications as a way to assess the quality of their research work and get the next set of grants, but translational research and knowledge transfer do not attract the academic kudos that impresses the research councils and gets the money. Post-neoclassical endogenous growth theory suggests that we have to put in resources to innovate, but that does not seem to be happening, or have I made a false assessment?
No, I absolutely agree and I thank the hon. Gentleman for that contribution. In general, that is what happens. Of course, we can all point to areas in which people have discovered things and made things happen. The previous Minister of Science staked his money on us putting all our energies into ensuring that universities developed small spin-out companies, and that happened in places such as Manchester, Oxford and Cambridge. However, I can mention other places where that was not the priority for the university department. Instead, the priority was the research assessment exercise and getting money in to do anything at all. That culture is still pervasive in our country, and there is still a research exercise.
I mentioned all the little things that people do to measure and understand things, and they do some crazy things to take measurements or get things designed, such as going to the workshop and so on. However, that was not really encouraged, and those people did not get any awards as a result of research assessment exercise. As I shall say in a minute, research councils are now trying to interact to develop a different culture. However, they are blowing in the wind, because many of the young people I meet have been brought up in a different culture and would never work for industry. Now I think it is good that they do not all work for industry and that there is blue-skies research, of course, in which brains ask silly questions and do silly things—which come off. However, at the same time we need to foster a culture in our universities and institutions in which people consider whether what they do might be valuable for other people.
I recognised, Mr. Atkinson, that I will not get to speak, so I wanted to make a couple of interventions on the hon. Gentleman, in the hope of contributing to the debate.
Does the hon. Gentleman accept that to have true innovation we must maintain a level of basic science—certainly at the present level, although I would argue that we must enhance it significantly really to take advantage of the opportunity for translational work and innovation? As to the hon. Gentleman’s last comments, how does he feel about the research councils putting so-called business experts on their panels, to judge some of the applications for research grants on their innovative aspects? Does that worry him?
Yes, that has worried me. It has always happened, actually, that research councils have included business people on those panels. It worries me in relation to the interaction between those people and the more pure academics and their research. I am describing a world in which opinion diverges on what is important. If that is also reflected in the relevant committee it does UK plc and the development of innovation no good. I shall say something about the training of young people, and the science plan, in a moment.
The DTI report, with all the pie charts, does not just deal with science and technology, but goes into the creative industries as well. There is a report by the National Endowment for Science, Technology and the Arts showing clearly that on this small island we underestimate the true innovation that happens in hospitals and health, in design and in the creative industries. Those creative industries are advertising, architecture, the art and antiques markets, leisure software, publishing software, computer games, films and video—and I could go on. There is more innovation than we know about in those industries, and I challenge the DTI on whether it knows about it, and on what it is doing about it. I may have revolutionary things to say about how we can change the DTI to bring out some of the ideas. As in the case of the Home Office, there may be too many functions in one big building down the road. We may need to take that on.
We can consider why some businesses, as the report states, do not innovate. I know people who do not know their regional development agency and do not care. They do not think that they have to innovate, because “we are doing all right”: the profits are up, and so on. That is how they measure success. That is not success. In this competitive world businesses must keep moving, or things will crowd in on them.
I congratulate my hon. Friend on securing the debate. He talks about business success, but does he agree that courses on innovation are one avenue we could pursue, which the Minister should perhaps consider? We should be looking to universities to train people or enable them to educate themselves on that topic. That happens in other countries, but not necessarily here. That might train the scientists, engineers and other people about whom my hon. Friend talks, to stretch out further and take opportunities to innovate and make things happen.
As someone who has spent a lot of time trying to teach people ideas, I should say that the best ideas have in many ways always come spontaneously. What is necessary is to set up an environment, not just in universities and institutions, but in schools, so that young people can say, “Let me do this; let me try to find out about this,” and suddenly there is the explosion of an idea. I am not sure that it is possible to structure that in the same way as is relevant to other kinds of success.
This island has produced so many good people. I was at a Scottish night—and shall be at another one tonight—where the Scots always talk about Simpson, who invented chloroform, and about Kirkpatrick Macmillan and the bicycle, and so on. How did all those inventions and ideas come about? The environment might have been dominated by poverty and might have been excited by a grant from a research council—although there were no research councils in those days; but we can never know how we get bright ideas to emerge. We need to create the environment and encourage them. My major criticism of school teaching is that young people are not allowed, in the sciences, technology and engineering, to do experimentation. There is a point where someone knows how to find out about things and test them, and how, when a bad result is produced, to try again and learn from it, perhaps getting a good result. We all have experience of seeing people trying and trying again, to explain what happens.
I take my hat off to such people as David Attenborough for his series “Blue Planet” and other work. We hear the simplistic view that it is only about the natural world, and is not real science. However, he has excited a generation to ask questions such as “Why do wildebeest charge into a river full of crocodiles? What a mad thing to do; haven’t they learned through evolution?” We can think up explanations, but such things excite people and stimulate their imagination. If that does not happen we do not have civilisation. That is what is lacking in much of our training in schools.
Cambridge university can run entrepreneurship courses, but in the end does it stultify real creativity? I am not sure. I am very aware of the Massachusetts Institute of Technology-Cambridge course that would involve people from MIT working with people in Cambridge; it was going to be wonderful, with great ideas and innovation. I do not know how that works, really. There has been a rough passage for the administration, but nothing has really emerged from it. That is the point. Innovation does not just happen tomorrow. It is an environment that is created, so that results emerge over a period of time. I remember the discovery of DNA, published in a simple little paper. Gosh, what a discovery that model was—published in a paper that I should probably have thrown out if I had reviewed it, because there were not enough data; it was an idea. Nevertheless, it really excited people to do other experiments.
The DTI, and the way in which it accepts science and technology, is important. We have a very important plan. I was so excited about the 10-year plan, for the years 2004 to 2014. It was a real move forward. We have all studied it and we all welcome it, but we want to make it happen, because if it does not, we shall fail. We must take the science and technology part of the innovation process seriously. I have said something about what we can do about education. It is appalling that many of our brightest young brains will not go into science and technology because of terrible contracts and because there is no future or encouragement for them. We would say that that is not true, and that they will get more money as PhDs. However, that is not how they feel. They do not see that world as a welcoming place in which to use their creativity and brains. The scientific world is not about Isaac Newton any more, or people with money; it is about young people who get married and want mortgages. We must engage with that to make sure that they are excited. They are excited by science, and are enthusiastic, but we must make things happen.
We need a strong supply of scientists, engineers and technologists; that is explicit in the plan. How do we make it happen? If we do not make it happen soon, we shall lose out. It is not just a question of the current generation. We are brilliant at science. We do very well, winning our Nobel prizes and all that. However, we must keep the next generation, who are coming up fast, in the game. It does not help when we close chemistry and physics departments, because—the Royal Society of Chemistry has been very active in this respect—it is necessary to understand how to make chemistry and physics part of the innovatory process. Chemistry is valuable not just for its own sake; it is part of developing a culture, society and civilisation, and an industry that can compete with the best of the world. I am never sure whether we are really in the shadow of the United States—perhaps the figures show that we are—but some of the Americans’ ideas have come out of collaboration with people in Britain. We need much more of that kind of interaction.
We have talked about research and development, in relation to the DTI document, how we have increased it, our ambitions for it in terms of gross domestic product percentage and how we are making that happen. We must continue to do that, but we have to think about which industries we are talking about. Is it only science-based industry or any industry? How do we make that kind of thing really happen? Do industries talk together?
We have talked about universities and business. There is a huge culture gap between university and businesses. We still have a culture, although not 100 per cent., of failing to make that interaction happen. People will say that there have been spin-off companies in Oxford and Cambridge and so on. There are thousands of chemistry and other students out there who have great ideas that could be taken up in the right environment and developed into some new product, if that is how we measure these things, or some new way of doing things.
The NESTA document, which is quite revolutionary in some ways, has clearly shown that we measure innovation in funny ways. We measure it in a pipeline way about research and development and pharmaceutical companies. Other companies innovate all the time—indeed, we all do. If the US ambassador thinks he innovates, I am sure that people here innovate in the way in which they handle their finances. The financial sector innovates all the time. We can argue about whether it is advantageous for people like us, but they are always changing things and looking for new ways of doing things.
There are interesting ideas in design and architecture. Our way of measuring innovation varies from one industry to another. I have a whole list of ways in which it is measured. The success of science in Britain used to be measured by the number of spin-off companies we had, and we sat back and said, “Wow, aren’t we doing well?” That is just one way of measuring innovation. Another issue to consider is whether those spin-off companies carry on. Do they become big companies or do they just fall? Is it a couple of guys at Cambridge who met in a pub and had a good idea about injecting someone in a certain way with a new drug and then that is the end of it—they make a million and retire to the south of France? That is innovation, but not continuous innovation. It does not stimulate other things.
There are other ways in which people can measure innovation, such as through the market share, brand value and customer satisfaction. It varies between sectors. It is no use saying that something has grown by 15 per cent. if the world market on which it competes has grown by 60 per cent., because that means that we are still behind in the game.
Many people are still researching this field. I know a lot of them and it can go on for ever. Somewhere it has to stop. They talk about knowledge spilling over from one organisation to another, and do I know it in Norwich. We have several networks there that are trying to shape the Norfolk future—and, wow, does it excite me when I go to their meetings! There is not much innovation there; it is all about playing administrative games. There is a Norfolk network of young people that is much more imaginative, but that cannot make things happen because local regional development agency money is not there for them.
RDAs have scientific committees, but some of them are appalling. I have had a running battle with the one in East Anglia about wanting to call Norwich a science city. It wants to know why I want to call Norwich a science city. It has three major research centres, a university with five departments, C-Red and the Tyndall centre on climate change, and science schools. The agency told me that there is no use in having a science city because there is no money in it. When I asked, “What do you mean, no money in it?” it replied that it does not get any money from the DTI or Government. But that is not the point. As Nottingham and York have found out, the point is that people will work together. It is about young scientists in schools who want to do science interacting with industries, universities and structures. It is about building up a complex.
I once asked Sir David King what he thought a science city was and he said, “Oh you just stick a notice up and say this is a science city.” I said, “Yes, but you’ve got to build something behind that as well.” People are basically interested in science, technology and engineering and want to make things happen. We have to use every device. Calling Norwich a science city will not cost a penny but it will bring together people from different areas.
My experience in our area of the north-east is very different from the hon. Gentleman’s. We had tremendous support from one north-east RDA in helping to set up a centre for process innovation three years ago. The agency went out of its way to make things happen for us, so I am alarmed by his comments. There must be something wrong in his agency. Ours has been a tremendous success. A lot of effort has been put in by all those involved.
Of course, there is variation between agencies. I can look at agencies where things are happening too. I believe that RDAs meet once or twice a year. Why do not they learn from their scientific committees? The best can tell the worst what they can do. They have lots of money, but I shall not be critical about where that money goes, even though there are local reporters present who have heard me talk about that already. There is lots of money about in RDAs. If science and technology can get the right development for good innovations, that should be a priority. Spreading it around is not the way to do things. We are trying to improve the function and lives of people across the board, but some RDAs do not have the money because there is no money in it. Money is accumulated when people interact and get the support that they need from industry and other groups.
A whole load of issues still need to be looked at, such as the differences between regions and spin-offs. What are spin-offs? Every meeting I went to with Lord Sainsbury—the last Minister for Science and Innovation—was all about spin-off companies and clusters. Do hon. Members remember the idea of clusters and that all the companies should be in the same place? That idea seems to have died a death. Why does it happen in other places and not here?
In the north-east, we have one of the most successful clusters in the vibrant chemical cluster. It has worked because there is spirit and a desire for the companies, academics and think-tanks to work together for the cluster to flourish. It has been going for three or four years in great spirit.
I absolutely accept that it can happen. When it does happen, it is because individuals who have ideas and who want to work together make it happen. Underwriting all that is the idea that innovation is important. It is about getting people with ideas together. One does not have to have brains to be an innovator; one simply has to think of other ways of doing things. That has obviously happened in the hon. Gentleman’s part of the world through collaboration between universities, industry and school, but it does not happen in other places, so the hon. Gentleman is lucky. We have to make it happen, but who will do it? I have lots more to say, but I think that I have gone on for too long.
Public procurement is another area that we should look at. The Government have millions of pounds to spend. A document has come out of the CBI and my favourite company, Qinetiq, which used to work only for the Ministry of Defence. I know from my time on the Select Committee on Science and Technology—the hon. Member for Esher and Walton (Mr. Taylor) will remember this—that Qinetiq made many discoveries, but put them in the bin if they were not useful to the military. That has changed. It may now develop something—a new plastic, for example—that is not useful in a gun but might be of use in a kitchen or elsewhere. Some of us have been to the company and seen how successful it is.
Qinetiq’s document talks about procurement pulling ideas and discoveries into the marketplace. That is what it needs. The document also says that the United States has an organisation that undertakes such work, and it recommends one for Britain. It is a major document, which challenges the way in which we do things. Important discoveries should not be put in the bin; they should be pulled through. The document says that regional development agencies may be important in some areas, but that generally we need one in this country. I cannot remember how many billions are invested in procurement, but it is much more than that which is invested in research and development. Nine times as much goes in, I think. It is billions. Using that money, we should encourage production and take activity into the public sector.
The issue is about risk and vision, too. People have to take a risk and think that innovation will happen. We think of ourselves as a risk-averse society. We are rather conservative and we do not want to make things happen. Our education is much the same. Young people learn about Newton, but we do not ask them for new ideas. The links between universities and businesses could be much improved, as the Campaign for Science and Engineering in the UK continually says. It also says that public procurement and the pulling through of new ideas and discoveries is important.
The public, too, have a large part to play. They can sometimes stimulate people to think about how they want to develop something that people want. The flow is not one-way but two-way: we make people’s lives different, they become part of that culture, and they say, “Why don’t you do it this way? Why don’t you invest in something like this?”
I always remember the argument about matches that one could strike more than once without having to put them in the bin—and the argument about why one could not do so. I never quite understood it, but I was crazy and young at the time. One can make such discoveries, but what is important is a system that the public can influence.
People make those things happen. Other people will talk about innovation in their areas, where they see it and at what level: big, small, in small ways and so on. At the end of the day, however, we must say to the Department of Trade and Industry, “You produce lovely documents, you’re a lovely Department and we love you dearly. You’re like the Home Office: we love you dearly.” But sometimes we must ask, “What are the important things that are going on in your Department, which you should perhaps take out?”
I have always been and always will be in favour of a Ministry of Science. We talk about different Departments talking to each other. Oh yes, they tell me they do it, but I do not believe it. I should have a Ministry of Science where the staff are all stuck in one place and talk about scientific and creative ideas. We could put the arts in there, too—I do not mind. They can talk about things together, and say, “This is what we’re capable of doing. How do we make it happen?” If people do not drink coffee together, they do not work together. The family who drink coffee together, stay together.
Order. Before I call Mr. Ian Taylor, may I remind hon. Members that there is just over a quarter of an hour left before the winding-up speeches start? If everybody wants to get in, they will have to ration their remarks considerably.
Thank you, Mr. Atkinson. I shall obey your ruling.
First, I welcome the Minister to his position—particularly because he is a Member of the House of Commons. Although I much admired his predecessor, he sat in the other House, which meant that debates in this House on science or space were less well informed. I am sure that they will no longer be like that.
I shall provide the Minister with one memory from when I was Minister for Science and Technology at the Department of Trade and Industry. I was about to give a speech at the university of Durham, but the vice-chancellor misread the agenda and announced the speech that the person after me was to make on catalysis and its impact on industry. I could not remember what I knew about catalysis and its impact on industry, so after pausing for breath and thought, I said, “I’m from the DTI and I’m here to help,” and someone in the audience said, “That’s an innovation.” Early on in my ministerial career, I learned what innovation was.
I largely agree with the hon. Member for Norwich, North (Dr. Gibson), although at Coventry City football matches we do not discuss endogenous growth theory. It obviously means that among my local support, I am less elevated than the hon. Gentleman.
Let me focus. First, the international challenge is no longer about outsourcing, but about the knowledge economy that is obviously growing in countries such as India and China in particular, although other Asian countries are catching up rapidly. The battle is not only to produce engineers and scientists of quality, but to make the UK an attractive place for them to work. We must attract them to this country.
Secondly, we must change the culture in this country so that it is much more receptive to those people who make the knowledge economy possible. One bizarre characteristic of this country is that we love new gadgets and applications and we want instant solutions to complex problems, but we do not admire as heroes the people who make it possible—the engineers and the scientists. We must therefore have people with skills in this country.
I do not have time to go into the problems in education, but the Prime Minister admitted in a speech in November that the Government have not succeeded in securing the right scientific output from schools. That is a serious problem—the present Government did not create it, but they face it—which has a knock-on effect for universities: they do not have the right mix of people. We must work out how to encourage more young people to study science, engineering and computational subjects, including mathematics.
My third point, which the hon. Gentleman picked up, is that in this country, the people who admire scientists tend to admire them because they work in blue-skies areas and make discoveries. The problem is that we do not have the same esteem for people who turn a discovery into an application. The Minister must consider the research assessment exercise and work out how a bibliometric approach that values publications and citations can be adjusted to value departments with a good track record of turning a discovery into an application. Such work is usually multidisciplinary, taking place not only within one institution, but between different institutions.
I have been doing some thinking for the Conservative party, which is not a contradiction in terms, despite the fact that in our last election manifesto, we did not mention science. That was our mistake, and we are now doing some serious thinking. My hon. Friend the shadow Chancellor said in an article in The Daily Telegraph on 22 November:
“We are broadening our approach to boost innovation, encourage science”,
as part of remaking our economic policy. Hooray! It is in the national interest that we all take an interest in those subjects.
My committee has made two proposals. First, we should use smart public procurement, which the hon. Gentleman mentioned. The figure for Government purchases is about £150 billion, against an Office of Science and Innovation budget of £3.4 billion. We should also use set-aside, which the Americans use, so that small and medium-sized companies benefit from Government procurement.
Our second idea is for an innovative projects agency. I was delighted when, on 30 November, the Financial Times said:
“It has been one of the big ideas of 2006… the re-emergence of serious thinking about research and innovation in the Tory party”.
The reality is simple. Many of the things that the hon. Gentleman mentioned and those in the Department’s documentation are so spread out that they do not make a collective impact. Many are based on a linear approach to knowledge transfer, which is not appropriate for most of this country’s industries, excluding perhaps the pharmaceutical industry. Another problem is that the hon. Gentleman and the Department push at the supply side, whereas I want to emphasise demand pull.
We have suggested the innovative projects agency, which would have a budget of £1 billion taken from existing sources, so I am not promising vast sums of new money. When one looks at the figures, it is interesting to consider the regional development agencies, for which I do not have a high regard. I think we could do a lot better: perhaps the best people from the RDAs could work with the innovative projects agency. The RDAs have several hundred million pounds that could go towards the agency’s budget. Some of the DTI’s activities could be transferred to it, and the Technology Strategy Board, which has a budget of £178 million, would be absorbed, too.
Those are key ideas that would help people in this country to collaborate to ensure that ideas are taken from discovery to application—obviously, that application would be commercial. I am enthused by those ideas, and I hope that the excitement resulting from a big initiative that we propose would permeate society more widely. It is essential that British people see that scientists and engineers can provide solutions that help to improve quality of life. That would be a great innovation in itself and it is one of the challenges that we all face.
I shall speak extremely briefly—for less than five minutes, if I can. For me, there is something of a feeling of déjà vu every time we discuss innovation. My hon. Friend the Member for Norwich, North (Dr. Gibson) and I have been involved in this field for more than 10 years during our time on the Select Committee on Science and Technology. It seems to me that the same problems are still with us to a large extent. The position is not quite as bad or grim as it was when we started, but we have not yet cracked the solutions. We have not made it possible for a bright scientist or engineer to get his or her idea or product to the market without going through some pretty awful challenges.
The science is almost the easy bit. Most people think that the original science is the difficult bit, but in many ways it is not. The engineering is not that difficult either because there are problems that people can work with. The difficulty is taking the idea, spinning out a company and ensuring it survives until it develops into one that earns revenue and can stand on its own feet. That is incredibly challenging and difficult. I have watched many companies go through the process; no company’s history is the same as any other’s, but they all have a lot of things in common.
All the support mechanisms, for example, tend to be far too diffuse and slow to respond—I am talking about conditions in the UK, not in America in silicon valley or in the Boston, Massachusetts corridor. It is difficult for companies here to access the capital support at low interest they need when they need it. If they fail, they run into the biggest brick wall of all. If they are quite near market when they fail, they face the catastrophic cultural attitude towards business failure that exists in this country, which is to condemn someone as a pariah. In America, they just say, “Hard luck. Try again. You’ve done it twice, you’re going to be even better the third time. We’ll back you.” That is totally different to the English culture. In England, failure means it is curtains.
The other possibility is that such companies find themselves simply swallowed up. If they have virtually got to the point of going to market, but do not have the capital to go further, a larger, established, less innovative company will just pick them up for nothing and take the benefit of all the work that has gone into the original company, which will not get any benefit from the process. The British venture capital industry has no solution to that problem at present. It will not invest in anything that is too small or a risk. It will start to invest seriously only when it can virtually see the profits on the table. That is not a promising situation. We in this country do not have the business angels that other countries, notably the US, have. There are one or two, but they are a rare breed. We need to do an awful lot to develop and improve the commercial circumstances surrounding the process that currently make it so difficult. The Department of Trade and Industry has a major role to play. I am not suggesting that it should put money towards the process, but there is an awful lot it can do to facilitate it.
The problem is not exclusive to the UK. We have found exactly the same complaints in Australia. Perhaps it is a phenomenon of the English-speaking world as opposed to the American-speaking world, but clearly there are a lot of problems to overcome. It is not just a question of willingness to be entrepreneurial or innovative, or of scientific or engineering genius, but of getting the whole package together. The commercial elements are just as important and that is where the greatest difficulties lie.
I congratulate my hon. Friend the Member for Norwich, North (Dr. Gibson) on securing the debate. I declare a registered interest in that I am a fellow of the Royal Society of Chemistry and I am its parliamentary adviser on the Labour Benches.
In my view, innovation is a spectrum of activity. It is not just the production of an idea or the invention of a new product, but everything downstream and upstream of that. I do not think that people can work in isolation to produce an invention: they gain ideas from other people and we have to create the right policies and culture. I congratulate the Government because I think that we are getting there. We are not there yet, but more money is going in and the policies are becoming right.
There has been a lot of criticism of regional development agencies, and I have to say that the one in the north-west is one of the best. It was certainly the first to spin out a science council. It is innovative and willing to take risks, and I shall refer to one of the risks it has taken. I am chairman of this particular enterprise, which is called the Bolton technical innovation centre.
A schoolteacher in Bolton came up with an idea, and I want everyone to know about it. He thought that if we can bring children to perform in orchestras much better than they would individually at school by, for example, creating a music centre in the town, we could do the same thing for science, technology, engineering and mathematics. That was his idea: to bring children together from different schools all over the Bolton area and further afield to help them to excel in STEM subjects.
We have a £3 million building in Bolton called the Bolton TIC. Children aged nine to 19 come to this building and the idea is to tap their virgin minds. Children have such fantastic ideas, but somewhere along the line they lose those ideas and become cemented into the conservativism of the education structure. Our idea is to get those ideas out of them while their minds are completely fertile through discussion sessions or by giving them state-of-the-art equipment. We have laser cutters, plasma cutters, colour three-dimensional profiling machines, virtual planetariums, robotics, lasers and equipment the like of which they would certainly never see in a school, and many of them would not even see at university if they went there.
We have an artist in residence who bridges the gap between the humanities and the sciences and gets the children to think across the bridges that been knocked down over the years. The children are beginning to design some pretty incredible products. Our aim is to protect the children’s intellectual property rights and eventually—30 years down the line, say—for those rights to deliver royalties to carry on running the building. The college is a model. If it works in the north-west, it would work in any region with a regional development agency.
We got £3 million in funding, of which £2.5 million was for the building and £500,000 was for the state-of-the-art equipment. Bolton metropolitan council has been supportive. The idea was first proposed to Lord Puttnam when he was at the National Endowment for Science, Technology and the Arts, which I also thank. Without the risk that NESTA took with its £100,000 grant, the idea would not have got off the ground. I thank all the industries that have been involved with us so far. The Department for Education and Skills has put in an enormous amount, but we are looking for sponsorship from industry as well.
If my hon. Friend the Minister has time, I encourage him to come and see the Bolton TIC and help us to spread the idea that children, too, can innovate and produce useful products. If we can protect those products with intellectual property rights, that will be the way forward. Finally, we have to start early, instilling into children a culture whereby they can think about new ideas and products—a culture in which education is not just about the basic academic subject that they are studying.
I shall start my remarks, which must perforce be brief, by welcoming the Minister to his new portfolio, as the hon. Member for Esher and Walton (Mr. Taylor) did. This is the first time that I have seen the Minister in the Chamber with his new portfolio. From the point of view of the Science and Technology Committee, I also welcome the fact that he has agreed to continue the tradition of his predecessor in having a question time four times a year. That was an innovation of his predecessor, who is in the House of Lords, and the Minister’s decision is to be welcomed. I would not say that it was a brave decision, because we are very nice, but it was open and engaged of him to do that. I am sure that my hon. Friend the Member for Harrogate and Knaresborough (Mr. Willis), who is the new Chairman of the Committee, shares that view.
I should like to thank the former Chairman of the Committee, the hon. Member for Norwich, North (Dr. Gibson), for giving us the opportunity to debate this issue. It is hard to do justice to a big subject in 40 minutes, as he showed, let alone in the 20 minutes or 10 minutes that we have. Nevertheless, many of the key issues have been touched on in the debate. We also had the fascinating image of wildebeest leaving the Mara and surging into a river. I am not sure exactly how that image came into the hon. Gentleman’s speech, but it has stayed with me.
The hon. Gentleman raised a number of important issues, including the importance of improving links between business and universities. The Government commissioned a report on that. The 10-year strategy and the “Next steps” report asked specific questions of researchers and the science community. The response of that community was published in September. It listed a number of responses and a number of positive suggestions, which the Government have said they will take forward. We look forward to the next “Next steps” report, as it were, to take the issue forward.
The hon. Gentleman mentioned that there might be something in the water in this country that makes us a little more risk averse. He also suggested that there was something in the education or culture. The issue is a particular problem. There is no doubt that there must be levers that the Government can use to give us the spirit of entrepreneurship and risk-taking that the US has, as I think the Government recognise. There is nothing in our genes that makes us unwilling to go down that path, so it is to be welcomed that the Government are seeking, as far as they can, to find ways of addressing that.
I hope that the Government will accept that it is not clear that there is sufficient evidence that the R and D tax credit is working sufficiently—it is not that it is not working—to encourage more risk-taking by business. It is also not clear whether the research assessment exercise inhibits people in universities and in basic science from taking risks, as my hon. Friend the Member for Harrogate and Knaresborough said in discussion with the hon. Member for Norwich, North. If we are to make progress towards the Government’s target of 2.5 per cent. of GDP going into R and D—a target that is well below the Lisbon fantasy figure in any case—we have to ask whether R and D tax credits, among other policies, are working in their current form. I should be interested if the Minister could clarify what research is being conducted into whether they can be used more effectively.
The hon. Member for Norwich, North also talked about the need to have adequate numbers of physics and chemistry departments. That is an issue on which the Committee, under his chairmanship and the new chairmanship, has made recommendations, to ensure that we do not lose capacity in certain regions because of the closure of departments.
The hon. Member for Esher and Walton, in a well-thought-out, albeit perforce brief contribution, pointed out the role of smart public procurement. We would all agree that something must be done to use that huge budget to encourage innovation, and to provide support for small and medium-sized enterprises, not just for the big fish. What is emerging from his work for the Conservative party is new and valuable thinking. It is reasonable to say that the Opposition parties have not, until recently, kept up with the pace on policies coming out of the Department of Trade and Industry in respect of science, and we need to do that.
In the little time available to them, the hon. Members for Brighton, Kemptown (Dr. Turner) and for Bolton, South-East (Dr. Iddon) brought their vast experience to bear. They gave local examples of what can be done, but it is unfortunate that we do not have more time.
In the brief time left to me, I want to make three points about how we can focus on innovation. We need to focus on innovation without a threat being made to basic science, as my hon. Friend the Member for Harrogate and Knaresborough said. That can be done not by withdrawing funds from basic science, but by removing barriers to innovation, so that the research councils can, as they have said they will do, spend small amounts of money—not grant-sized amounts—on training people who receive grants in innovation and entrepreneurship. We can arrange a proper career structure for those academics who need to spend a lot of time drawing up business plans, to ensure that they do not lose out. We can also find ways of either reducing the risk that has to be taken or cushioning it through laws relating to those who have had a financial lack of success in the past. Finally, we can provide a positive climate.
I do not think that it is appropriate for the research councils to set targets for spending on translational research. Indeed, that was discussed at the Committee’s sitting this morning with Sir David Cooksey, and I had an exchange with the Minister and Keith O’Nions on the issue. In a desperate attempt to meet those targets, there will inevitably be pressure not to think, but just to transfer money from other budgets to translational research budgets, so we should avoid such targets.
We have to think about capacity. As the hon. Member for Norwich, North mentioned, we have to have a supply of scientists to start with. We face a vicious circle of not enough people studying physics and chemistry at university or going into teaching as specialists, and therefore not enough people encouraging others to study physics and chemistry at university. It is no good the Government’s citing increases of a quarter in the number of science undergraduates since 1997, when we know that there has been no such increase in the core hard sciences. If we strip away information and communications technology and the softer science courses, such as forensic science, we do not see that increase. I hope that the Minister will recognise that the true figures are not what we thought they would be.
Another factor is that we must secure the right climate for innovation and science. It is important to take on the forces of anti-science, so that people and businesses are not worried about going down the science path, based on their past experience of how the country as a whole responded to the possibilities offered by genetically modified food and crops, which I considered unfortunate. In a speech in my constituency, the Prime Minister said:
“The anti-science brigade threatens our progress and our prosperity. We need political and science leadership that stands up to them.”
He also said:
“Government must show leadership and courage in standing up for science and rejecting an irrational public debate around it.”
He went on to say that
“in many instances, a powerful and vocal lobby, with access to all the media channels and an interest in polarising the argument, frames the debate.”
The Prime Minister also mentioned the success of Government policy in stem cells. After that speech, everyone was struck by the fact that the Department of Health produced its White Paper on stem cells, which effectively called for a ban on some stem cell research lines that might lead to therapies later on, but without giving good reason. The Committee is conducting an inquiry on the issue, but it does not work for the Prime Minister to say all the right things—I endorse everything that he said—but then to cave in to an anti-science lobby, or at least not to give reasons why the Government will not support such research.
There is not enough time to mention some of the other things that need to be said, but I urge the House to look at the Science and Technology Committee report “Research Council Support for Knowledge Transfer” and the thoughtful Government response, which set out many of the issues that the hon. Member for Norwich, North would have wanted us to consider in great detail. I thank him again for introducing this debate and look forward to hearing the Minister’s response.
It is a pleasure to take part in this debate. I join others in congratulating the hon. Member for Norwich, North (Dr. Gibson) on introducing it, and doing so with his customary enthusiasm and passion. His wide-ranging speech addressed many of the issues that we need to think about.
I also join others in welcoming the Minister to his new brief. He and I spent a lot of time working on energy issues together—well, not always working together, but certainly discussing them jointly. He won many admirers for his work as Minister for Energy; perhaps that is why the Prime Minister moved him. I hope that the Minister will bring the same commitment, energy and humour to his new brief. I am sure that he will, and that he will win as many admirers in his new role.
This debate has made it absolutely clear how vital innovation is to our future prosperity as a country. Much of what is going on is working well, although we have to be wary of the increasing threats posed by other countries and work out how to maintain our competitive advantage. In fact, in many fields we are looking at how to close the productivity gap rather than how to maintain an advantage.
Historically, it is fair to say that our record on science, development and innovation, under this and previous Governments, has been good. Many good initiatives have been undertaken; it is no accident that British research work and scientific papers are among the most cited in the world. However, that does not automatically lead to commercial success or mean that such innovation leads to the commercialisation of the new ideas in this country.
All our lives, we have been aware that other countries have taken advantage of and got commercial benefit from great British inventions. We owe a great tribute to the British businesses that carry out such work. At the cutting edge of technology and innovation, British businesses still lead the world. A few weeks ago I was fortunate enough to visit the Rolls-Royce factory in Derby. Rolls-Royce is not just an engine company now; much of its innovation goes into its role as a service company. From a base station, it can monitor every single one of its engines in the sky. It knows whether something is going wrong well before the pilot, and that makes it one of the most successful companies in this country and globally.
From the perspective of energy, we can see how a new need for green energy production has transformed the whole debate. Even big companies such as BP or Tesco want to get involved, see what they can do and innovate more. A range of people in universities, often working in conjunction with business, are putting their thought processes to work to see how they can generate the new source of energy that will make the difference.
Business is absolutely in the lead on these issues. It is easy for us to think that it takes part because politicians have been urging it to do so, but at the motor show last year, the centrepiece of every single stand was a new hybrid or energy-efficient car. Five years ago, the same companies were thinking about what consumers and political leaders would want and they were prepared to lead the investment on that.
We need fresh thinking if we are going to maintain our lead—or, indeed, to close the gap with other countries. I commend my hon. Friend the Member for Esher and Walton (Mr. Taylor) on his work. The great advantage of having a policy review is that a great expert in the field comes in with many new ideas and we benefit from a range of other people who would not normally be involved in Conservative party politics. We are seeking to work with my hon. Friend to generate the best ideas.
Everywhere I go, people say, “Of course, you’ll never be as good as Ian Taylor.” I recognise that, but it is wonderful to have him generating new ideas. He has previously given the example of the solar fridge, which could be fundamental in many developing countries, particularly Africa. If the Government used their purchasing power to carry that project through, rather than just giving it research grants, we could make a difference. If from their international aid budget, the Government placed a contract for, say, 10,000 such fridges, that would make a massive difference to whether production could become commercially feasible. I have also read with great fascination my hon. Friend’s suggestions in respect of an innovative projects agency to see how we can use existing funds more efficiently and encourage cross-fertilisation and a more general enthusiasm for science, technology, engineering and mathematics.
I agree with my hon. Friend across the board, particularly in what he said about the research assessment exercise. Too often, that focuses not on commercialising ideas but on generating them. It needs to change so that commercialisation becomes a more important part.
The key to success is people. In this short debate, there has already been discussion on how we can encourage more people to study science and related subjects at university. I agree with the hon. Member for Oxford, West and Abingdon (Dr. Harris) that the headline figures do not show what is happening. Psychology is certainly important, but if we want to compare like with like, we cannot include psychology graduates among science graduates. We should be concerned about the closure of chemistry, physics and, now, mathematics courses. We need to look at what the rest of the world is doing.
I commend “The World is Flat” by Thomas Friedman to every Member; it should be read by every politician, media commentator and business man, because it is a salient call on what is going on in the world at the moment and the threats that we face. Friedman talks of meeting the mayor of Dalian, which is in China and where a lot of outreach work is done for Japan. The mayor told him that in that one city there are 22 universities with 200,000 students, more than half of whom graduate with an engineering or science degree. Even those who do not are directed to spend a year studying Japanese or English and computer science to make them employable. The purpose of that approach is not only to create a scientific community, but to benefit from the business gain that it will bring to that city and province. We need to do more to encourage an enthusiasm for science among our young people and dispel the myths that the work being done is boring, when it is often on the cutting edge of what is happening on our planet. We also need to dispel the myth that if they worked in the sector, they would be on low salaries.
There must be a combination: if a company is to be encouraged to innovate, it must have access to the people and the right fiscal framework. It must believe that it will be truly rewarded for its work and that its environment will not be over-regulated. We need to address that issue. The forms that people have to fill out when they apply for a Government grant and support are too long and complicated. We need to focus on that and make it easier for them to do. That issue was also raised by the Society of British Aerospace Companies, which says that there must be a
“full review of the administrative processes of the Technology Programme. This must lead to more consistent bidding arrangements, call content more applicable to the sector and monitoring that is cost effective and minimises the administrative burden on companies.”
The Organisation for Economic Co-operation and Development has also been helpful in putting forward things that we should be doing. It has called for the streamlining of fiscal measures to support R and D; as it says, there is still a potential overlap between R and D tax incentives and remaining grant schemes. It calls for the balance of direct funding for R and D between small and medium-sized enterprises and larger companies to be reconsidered to make sure that SMEs get their fair share as well. It says that there is scope to exploit the strength of the science base through further promoting university-business collaboration, on which many have focused this morning.
If we had more time, we could focus on other issues—for example, the contribution that science centres make. I listened with interest to the hon. Member for Bolton, South-East (Dr. Iddon) talk about Bolton TIC and its contribution to enthusing a new generation of young people about science. However, every single science centre faces budgetary cuts, and some face potential closure. I hope that the Minister will consider such issues and see what more can be done to support them.
We should be considering, too, things such as the science week exhibition that we had in the House last year when many brilliant young scientists brought their work to show what they were doing and to talk about how they want to take it to market and to commercialise it. Many other schemes, such as Young Enterprise, will help young people to have the spirit of enterprise and innovation and to consider how the ideas that are generated can be made commercially feasible.
This is an extremely exciting time for innovation in this country. The Government have aspects of it right, but if we are to continue with our dynamic approach, we need to address further issues, such as those that I have just outlined.
This is the second time today that I have been before you, Mr. Atkinson, although that phrase might suggest that I am in the role of defendant and that you are in the role of a stern magistrate. I do not think that I will pursue that route.
I thank the hon. Member for Wealden (Charles Hendry) for his kind words, and I thank other hon. Members for their kind words, too. Long may they continue. I also congratulate my hon. Friend the Member for Norwich, North (Dr. Gibson) on securing this important debate, in which we have had a number of individual and distinguished contributions; there has not been a wildebeest in sight, intellectually. My hon. Friend shared with us—rightly or wrongly—the fact that he thought the subject through in his bath. It is a great privilege to be appearing before such a latter-day Archimedes on this occasion.
Our policies on innovation aim to maintain and improve the United Kingdom as a knowledge economy by encouraging the successful exploitation of ideas. Maybe that is as good a definition of innovation as any can suggest. Many of those ideas will emanate from a science base, and many will have science-based solutions. It is worth noting that, as colleagues have conceded, not all innovation is about science. Wherever ideas come from, we regard it as a priority to create the opportunities for interaction between knowledge creators and innovators.
As many Members present will know, the word “science” comes from the Latin word “scientia”—the pronunciation of the “c” depended on which side of the river one came from in those times—which means knowledge. That is a nice coincidence for us today, because in the United Kingdom we are trying to develop a knowledge economy—and therefore a knowledge society and a knowledge democracy, given some of the issues about society and science mentioned by the hon. Member for Oxford, West and Abingdon (Dr. Harris). Globalisation means that we no longer expect to compete merely on price or to trade in traditional products alone. Indeed, more than 70 per cent. of the economy is in the service sectors. The UK is a truly modern global economy in prime position to take advantage of the opportunities presented. Innovation has contributed to our success in both manufacturing and services. We have open and free markets, we are global players and we stay competitive through innovation, hence the importance of the debate.
Innovation is obviously important. Only this week a report from McKinsey considering why New York is losing its lead as a financial centre highlighted that London now has a more attractive legal and regulatory environment—an environment that enables innovation in financial products. Many of the challenges that we are discussing are challenges for the private sector, but there are challenges for other sectors, too, including our learned professions. The Royal Society of Chemistry is an example of a leading professional body that has now put innovation at its core through its mission statements.
I want to focus on what the Government can do about all that to ensure that our economy remains competitive. I shall highlight some developments, almost by way of headlines, given the time that we have available. We are working across government to ensure that public sector procurement—my hon. Friend was looking for a figure, and it is worth more than £125 billion a year—stimulates innovative solutions. The Financial Secretary to the Treasury announced yesterday a series of reforms to help promote technological innovation and innovation in public services. Given the size of the procurement budget, in that way alone the Government can drive innovation.
A number of agencies play a role. We heard some critical comments about at least one regional development agency, but I believe that the RDAs’ innovation policies are working to address challenges in commercialisation, knowledge transfer, the promotion of innovation, the creation of networks and improvements in skills. Science and industry councils have been set up in each region to guide RDA innovation spending. My hon. Friend paid tribute to the work in his region. Innovative businesses need intellectual property protection and clarity on standards and measurement. The DTI and its agencies provide that clarity and protection. Of course, we are considering the implications of the Gowers review of intellectual property.
We are working with the Design Council, which is developing a network to improve supply and demand of creativity skills following the review of creativity by Sir George Cox. Design is crucial in terms of modern day products and competition. I look forward to learning more about the work of designers and the Design Council in the months to come. In December, the Leitch review identified the UK’s optimal skills mix in 2020. We will be working with the Department for Education and Skills and the Department for Culture, Media and Sport, among others, to respond to that report.
We are at the forefront of EU thinking on innovation policy. The research and development scoreboard and value added scoreboard produced by the DTI allow businesses to benchmark themselves against peers. They have also enabled us to dig down into the reasons why, for a predominantly service sector economy such as ours, simple research and development measures are not enough for good policy development.
Knowledge transfer has been given a high profile since the Lambert review of business-university collaboration in 2003, the policy set out in the 10-year framework for science and innovation and the more recent updates of that framework. The business-led Technology Strategy Board is increasing the opportunities for business to exploit science and technology through collaborative research and developing the knowledge transfer networks. Of course, one is interested by the ideas that emanate from the distinguished review associated with the Conservative party. I shall not make quips about thinking in the Conservative party as an exciting piece of innovation that has started from the most unlikely sources; this has been a learned and distinguished debate, and it would be wrong to make any such quip.
In July, the Technology Strategy Board will become a non-departmental public body, which will improve its ability to operate with flexibility. I shall give two examples of its work. By supporting the integrated wing programme, a pioneering programme led by Airbus UK, the board is putting Britain at the forefront of next-generation, greener, cost-effective aircraft design. By working with a UK-based consortium of companies developing in-body micro-generators that will convert energy from human body movement into power for implanted medical devices, including pacemakers, electrical stimulators, instrumented joints and body area network applications—an example of our technology being at the forefront—the board is contributing not only to wealth creation, but to the welfare of people around the world.
Innovation platforms, which bring together business and government, are another important example of the work that is going on. Through the higher education innovation fund, the Government provide resources to all universities to increase knowledge transfer activity and business engagement. In addition to the oft-quoted growth in spin-out companies, HEIF has also led to a wider culture change in universities’ innovation activity.
I took careful note of the remarks made by the hon. Member for Esher and Walton (Mr. Taylor) about the research assessment exercise. We have to get the balance right between the absolute emphasis on pure and basic research, blue-skies thinking and the rest and the need to find measures to complement the well-accepted and traditional measures of academic excellence. This is not about one or the other, or about a conflict or a contest, but about searching for some complementary approach. That is important.
Research and development tax credits got a mention. They are important, but we shall consider some of the new evidence on that issue. I listened with care to my hon. Friend the Member for Brighton, Kemptown (Dr. Turner) and to his thoughts about innovation. Of course, the contribution of the Bolton TIC was also notable. Indeed, we are working with the DFES to introduce innovation and entrepreneurship training to the school curriculum, with pilots starting last week. This has been an important debate, and one that I have enjoyed.
Reddish South and Denton Stations
Through you, Mr. Atkinson, I thank Mr. Speaker for allowing me this debate.
The proposals set out by Network Rail in its route utilisation strategy consultation document to close Reddish South and Denton railway stations are of great concern to my constituents. The sad irony is that, at the moment, few if any of my constituents use those stations, although that is more to do with the current services. Nevertheless, my constituents recognise, as do I, the potential benefit of both stations in providing northern Stockport and south-west Tameside with a valuable commuter rail service—one that I contend could have a fruitful commercial future.
First, let me set out some of the historical background. Denton and Reddish South stations are situated on the Stockport to Stalybridge line, which runs across the south-east of the Greater Manchester conurbation. In years gone by, it was a busy line and for most of its length it had four tracks. The beauty of the line was that it enabled passenger services from south Manchester and beyond to link to other national and local services to the north. Historically, services into central Manchester were more fragmented than they are now. Services to the south left from Piccadilly, formerly known as London Road station; and services to the north, including inter-city and many trans-Pennine services, left from Manchester Victoria station.
I congratulate my hon. Friend on securing this debate. He speaks of services to the south, which have great relevance to many cities in the south. For instance, the mainline route from Brighton to Manchester is currently under threat of closure due to rail line utilisation. Does he see that as relevant to cities in the south, such as mine?
I do. One problem that I shall deal with later is the capacity problem of trains going to Manchester Piccadilly. I contend that if we transferred some of the local services from Piccadilly to Manchester Victoria, using the line through Denton and Reddish South, capacity to Manchester Piccadilly would be increased and there would be more scope for services from the south of England.
In years gone by, passengers arriving at Manchester Piccadilly often had to get other mainline services from Victoria. Today, Piccadilly is the main inter-city station and Victoria serves mainly the local catchment area. However, in those days, people could use the Stockport to Stalybridge line and its branches to access services from the north or south without going into the city centre and then having to traipse to the other station. As patterns of travel have altered, and given that most services were linked into Piccadilly, so the number of people using the Stockport to Stalybridge line has dwindled. Even so, until 1991 the line served as a convenient link from Stockport in gaining access to trans-Pennine services at Stalybridge.
Another factor led to the decline of Denton station—its location. Ironically, it is this station’s location that today makes it attractive, but that was not the case until fairly recently, and I will explain why. Denton station is not located at the heart of the community. It is about a mile from Crown Point, Denton’s town centre, and is bounded by industrial units, reservoir land and the M67 motorway, which was built in 1981 and which cuts right through the centre of the town.
Immediately adjacent to the site is Denton roundabout, where the M67, the M60 Manchester orbital motorway and the A57, the main road into Manchester city centre, all meet. Denton station has no obvious catchment area or hinterland from which it can sustain a viable commuter service. However, all is not what it seems, and I shall explain why later. The other station, Reddish South, is completely the opposite. Despite its misleading name, it is located in the heart of Reddish district centre and is surrounded by shops and houses. It has a good catchment area, and given a decent service, it could easily have a viable future. There is also scope for a local park-and-ride facility at the station.
In 1991 everything changed. Because of the dwindling number of passengers travelling from Stockport to Stalybridge, British Rail effectively closed the line and stations by declaring it to be a parliamentary line. For the past 16 years, therefore, we have been blessed with just one train a week travelling in just one direction, with Reddish South and Denton stations being request-only stops. So pathetic is the service that one cannot get a return ticket from Stalybridge to Stockport. Indeed, only train enthusiasts ride on the now infamous “ghost train” service.
The Minster must be asking why there has been such a fuss to save our stations. The answer, as I will show, is because a viable option is screaming at us that would cost very little to implement. One of the early decisions of this Labour Government, on coming to power in 1997, was to initiate extensive transport studies in parts of the country that were experiencing significant congestion problems. The aim of those studies was to consider the problem in the round and to develop an approach that was an argument not merely for more road building, but for developing public transport alongside other infrastructure projects in order to give people a viable alternative to the motor car.
One of the studies commissioned by the Government was the south-east Manchester multi-modal study, or SEMMMS. Reddish and Denton are both covered by SEMMMS. When it comes to judging Network Rail’s proposals for the closure of the two railway stations, I would argue that that should be done alongside the aims and objectives of SEMMMS, which in its 2001 report calls for the restoration of passenger services on that line to be considered.
I return to Denton station. I might have given the Minister the idea that it has a poor location. Nothing could be further from the truth. I said that Denton station lies adjacent to the junction of the M60, M67 and A57. SEMMMS identified that roundabout as being at junction capacity, with no scope to improve it without spending massive capital sums, and said that it was a major contributor to traffic congestion through Tameside. Today, we hear that Greater Manchester may introduce a congestion charge on the main routes into the city centre as part of its transport innovation fund submission. Undoubtedly, that would have to include the A57. If so, investment in the railway line and a park-and-ride option are crucial. Councillor Roger Jones, chairman of Greater Manchester passenger transport authority, is quoted in the local papers as saying:
“We know people will use buses, trains and trams if they are reliable and affordable and I’m confident, given the right levels of investment, we can achieve this.”
I echo his view.
Given that much traffic is heading into or away from Manchester at peak times, scope surely exists for a major strategic park-and-ride facility to be developed alongside that junction. There are two possible sites: the spare land next to the reservoirs, or spare capacity at the Sainsbury’s superstore immediately to the south of the motorway junction with the A57. Indeed, use of private land for park-and-ride has already been pioneered by the Greater Manchester passenger transport executive at the Siemens site in south Manchester.
Again, some brief background information might help. When retail planning permission was applied for in 1988, it was for a Sainsbury’s store and a Children’s World store, but the latter was never built. However, the car park was constructed as originally planned—for both stores—so even on the busiest trading days of the year it is at least one third empty. The car park could be linked to the station by creating a well-lit footpath, utilising a redundant rail bridge under the M67. I have not formally approached Sainsbury, but I believe it would be a real advantage to the company; not only it would utilise the spare capacity in the car park, but some of those who use the parking will go on to shop in the store or use the on-site petrol station.
The real issue when arguing against the closures is that preserving the status quo or even increasing the number of trains to Stalybridge and providing a return option will not solve the problem. With the best will in the world, a large number of people from Stockport, Reddish and Denton do not wish or do not need to go to Stalybridge. The vast majority of traffic goes into Manchester and, to a lesser extent, into Stockport. That is where many of my constituents work or shop, and they frequently go there.
What is the scope for a commuter service into Manchester using those routes? I would argue that it is very good, and that is what I have been calling for. It would be easy to have a local service running from Stockport along the Stalybridge line through Reddish South and Denton, where we could have a strategic park-and-ride for south-east Manchester. Just past Denton station is an existing rail link connecting the Stalybridge line with the existing Ashton to Manchester Victoria line. I think that it is known as the Crowthorne curve. Indeed, when engineering works take place on the line between Piccadilly and Stockport, that route is used to redirect passenger services into Victoria.
Furthermore, as there is a major rail capacity problem at Piccadilly, which is not easy to resolve, and Virgin wishes to increase the number of trains on the west coast main line, it may be desirable for more local services to link into Victoria instead. One further benefit to that suggestion is that it would provide a sizeable section of south-east Manchester with an alternative to road travel. Reddish and Denton have poor public transport links, and given the considerable congestion identified by SEMMMS, a rail link into Manchester is more than just a convenience; it is a necessity. That is even more the case because it would serve a considerable catchment area, on which the proposed Metrolink big bang will not have the slightest impact. Those are the plans that I have put formally to Network Rail in private meetings and as part of the consultation exercise.
I give my best wishes to my hon. Friend in his plans. He has mentioned park-and-ride on several occasions. Would he also consider introducing proposals for bike-and-ride? During my visit to his constituency last September, I noticed that many of his constituents were on bicycles. May I request that if he is successful in his plans, trains will be provided with space for bicycles so that people can cycle to the station and are not forced to leave their bike at home because there is no space on the train during peak times—as many of my constituents have to do?
My hon. Friend makes a genuine point. One of the issues identified by Greater Manchester passenger transport authority as part of its transport innovation fund submission is that cycle usage in Greater Manchester is in decline because of congestion on the roads. I know that cycle users raise the issue of cycle access on the rails locally with MPs, particularly regarding the Metrolink.
I place on the official record my thanks and appreciation to the people of Reddish and Denton who have shown their support for the campaign, and to the local Labour councillors who are fighting hard in their areas—particularly Councillors Walter Brett and Brenda Warrington. We have also won the support of the Labour-controlled Greater Manchester passenger transport authority. On Monday I received a letter from Councillor Roger Jones, the chair, in which he states that the GMPTA is
“unable to support the specific proposals within the draft RUS to close…Denton and Reddish South stations without more detailed study of potential land use developments within the catchment areas and the potential increases in patronage if the rail services were enhanced.”
I also thank Tameside Councillors Alan Whitehead and Mike Smith, and Stockport Councillor Maureen Rowles, who are also members of the GMPTA, for their support for keeping Reddish South and Denton stations open—I am very grateful.
I should also place on record my grudging thanks to the belated support of Liberal Democrat Stockport council, which spent 17 days desperately looking for a different plan before realising that there was none. It then signed up to a letter with an identical proposal to mine and that of Stockport Labour group. That was a brief but unfortunate episode in the campaign. However, it was not surprising given that the executive member for transport, Councillor David Goddard, was once a South Reddish Labour councillor who lost his principles in order to pick up an extra allowance. It is in his character not to agree with his former party on anything, which is a pity, but at least the borough is now singing from the same hymn sheet.
Before I finish, I will touch on some of the wider issues of economic growth and governance in the area. The concept of city regions seems to have gained great prominence during the past year. That is a concept that I fully support and subscribe to. Major cities, such as Manchester, have an economic footprint way beyond their city boundaries. Allowing greater and more efficient movement of people, goods and ideas across Greater Manchester will allow more communities to benefit from proximity to the city centre. However, although the economic footprint of the city is large, it is uneven, and there is much that could be done on transport, and local decision making on transport, to resolve that.
As I said, the boroughs affected by the proposed closure of the stations are now fully supporting the concept of a direct rail service to the city centre. In fact, the 10 metropolitan borough councils of Greater Manchester have a good track record of co-operation across the city region, including on transport.
Through the GMPTA we have brought improvements to local transport in Greater Manchester through better use of buses and the Metrolink. For example, since the beginning of the free bus passes for pensioners scheme, the GMPTA has allowed pass holders in Greater Manchester to use buses, trains and the Metrolink to travel across the conurbation. Greater local control over transport is vital. That is recognised by the Northwest Development Agency and by the Government in the local government White Paper.
I support what my hon. Friend has said about more power for local authorities over transport issues. That is an important issue in the campaign to save Reddish South and Denton stations. City transport, however, is not simply about trams and buses; it is also about rail commuter lines. The scheme that I have proposed will allow much greater use of a currently underused line and improve commuter rail links for huge swathes of south-east Greater Manchester.
Like many major cities, Greater Manchester has higher rates of worklessness, deprivation and poverty than the national average. Better transport links from those pockets of deprivation, in which parts of both Reddish and Denton can be included, would provide my constituents with access to the world class industries and employment opportunities on offer in the city centre and beyond.
The 2003 Department for Transport document “Evaluation of the Wider Benefits of Transport Improvements” considered the employment consequences of improved transport in London and the south-east. The study found that
“employment falls by around 2.5%-3% per 100 metres as distance to stations increases.”
While that study focused upon London and the south-east, I believe that it also supports my proposition, which is that the residents of Denton and Reddish would have enhanced employment prospects if their railway stations gave them convenient access to the opportunities prevalent in the city centre. In fact, the Government and the Greater Manchester passenger transport executive are rightly spending almost £1 billion on new tracks and stations so that other residents in Greater Manchester have Metrolink access to the city centre. With no prospect of Metrolink, my constituents in Reddish and Denton have the tracks and the stations, but they do not, as yet, have the local services.
I hope that I have demonstrated that the line and stations have a future that fits in perfectly with the SEMMMS study and the transport needs of this part of Greater Manchester. My proposals have all-party support, cross-borough support and passenger transport authority support, and they make sense. I have already written to the Minister and discussed these matters privately with him, but I also wanted to put this issue on the public record. I have requested that the Minister considers meeting a small delegation from Stockport and Tameside to discuss my proposals and our predicament further.
I was delighted when my hon. Friend was appointed to his post. He has a local public transport background, and he cares for these issues. I fully support the work of his Department to enhance local control over local public transport, and I hope that the widespread support that this proposal enjoys is taken seriously. We are seeking an assurance from him that the Network Rail route utilisation strategy exercise is not a foregone conclusion, and that our counter-proposal, and any other ideas, will be given proper and detailed consideration. I hope that that is the case and that we have a real chance of creating a vital rail link, and saving Denton and Reddish South stations in the process.
It is good to see you again after such a short time, Mr. Atkinson. I had imagined that I was the most regular attendee in this Chamber until I saw that you were here again.
I congratulate my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) on securing the debate and on the extremely powerful and thoughtful case he has made on behalf of his constituents. He has clearly given a great deal of thought to the subject and I commend him. I hope to be able in the short time available to me to respond to the points that have been raised.
From the outset I should make it clear that no formal application for the closure of Reddish South and Denton stations has been made and that closure is only one of several options being considered for the future of the route. I can confirm, in response to one of his later points, that closure is not a foregone conclusion. As I will explain later, any application would have to meet strict criteria, and a view on whether these procedures should be brought into effect would initially be sought from the Secretary of State for Transport.
As my hon. Friend has mentioned, Reddish South and Denton stations are currently served by one train a week, which runs on Saturday mornings from Stockport to Stalybridge. Until the early 1990s, the service was frequent, as it was used as the link to allow connections between the west coast main line inter-city services on to the services between Manchester Victoria and destinations across the Pennines in Yorkshire and to the east coast. The diversion of the services now known as TransPennine into Manchester Piccadilly provided a direct connection and therefore removed the prime need for the frequent service via Reddish South and Denton stations, as my hon. Friend is aware. Low passenger use from those intermediate stations at the time did not warrant the retention of a frequent service. I am informed, and my hon. Friend has confirmed this afternoon, that the current service is mainly patronised by railway enthusiasts—I do not mean that term in any pejorative sense. The minimal or parliamentary service was retained, as it was not considered appropriate to close the line at that time. We now need to consider the future of rail services as a whole in the north-west, and studies such as SEMMMS will be taken into account.
Regional planning assessments for the north-east, north-west and west midlands have already been published, and assessments for the east midlands, Thames valley and south-west will follow soon. The whole country will be covered by the end of this year. Each assessment asks a simple but far-reaching question: over the next 20 years, what regional and economic development can we expect and how can the railway best respond and contribute to that? Using the RPAs, the Department is leading that process of forecasting and consulting to try to deliver a consensus not about whether to grow our railways, but about how best to do so.
As part of its future planning process, Network Rail has been producing route utilisation strategies, or RUSs. Those set out Network Rail’s strategies for the future of the railways in Britain area by area. The strategies are produced in a highly consultative and inclusive way, involving train and freight operators, passenger representatives, local authorities and others. As such, they should be considered a product not just of Network Rail, but of the whole railway industry.
In general, the railway in the north-west is successful and many routes are busy. Punctuality improvements have led to passenger numbers increasing in recent years. The strategy therefore considers areas where growth in passenger demand may require increased capacity, with longer trains, more trains or an additional platform, at Manchester airport station, for example. Opportunities for improved interchange with the Manchester Metrolink system are also being considered.
The consultation document for the north-west RUS was published in November 2006, with the consultation period running until 5 January this year. The consultation document included several options for the route and recommended that Reddish South and Denton stations be closed. It also included options for diverting additional services along the route, but those would not call at intermediate stations. Stakeholders and other groups in the Denton and Reddish South area will have had an opportunity to comment on the Network Rail options during the consultation period. The responses to the north-west RUS consultation document will now be considered by Network Rail, and it is planned to introduce the RUS in April or May of this year. That is why the publication this year of our high-level output specification—that trips off the tongue very neatly—or HLOS and associated budgets and framework will be so important.
Let me set that in context. Since the mid-1990s, passenger demand has risen at about 3 per cent. every year and freight demand has grown at a similar pace. Significant investment in rail has taken place, but that has not always been well managed or prioritised. The cost of the railway infrastructure escalated unacceptably under Railtrack, and we took action to stabilise that with the creation of Network Rail. The Government have taken charge of setting the strategy for the railway, while Network Rail has been given clear responsibility for operating the network and for performance. Track and train companies are being brought closer together.
The rail strategy that we publish this summer will establish our long-term plan for the industry, but a plan is, of course, no good without the means to deliver it. That is why our strategy will be underpinned by the HLOS, which will set out the improvements in safety, reliability and, crucially, capacity that we wish to buy over the five years from 2009 to 2014. That will be accompanied by a five-year budget—the statement of funds available—and it will be consulted on. The Office of Rail Regulation will scrutinise the output specification to ensure that it can be fairly expected of Network Rail to deliver that within the funds made available.
The Department for Transport will work with Network Rail and the train operators to ensure that changes to train services are procured at an affordable price at the right time. It will be the Government who decide what they wish to buy from the railways and the level of public sector funding that is available. Within that framework, the ORR will determine and price the outputs that Network Rail will be obliged to deliver, and we will make clear to everyone what railway expansion we seek to buy.
Should any formal proposal be made for the withdrawal of services from Reddish South and Denton stations, the railway closure process as specified in the Railways Act 2005 will come into play. I shall explain how the process would work. Under the Act, closures can be proposed by a rail funding authority or a train or network operating company. The RFAs specified in the 2005 Act are the Secretary of State for Transport, Scottish Ministers, the National Assembly for Wales, the English passenger transport authorities and the Mayor of London.
When a train or network operating company proposes a closure, a view on whether it should be brought into effect must be taken by the relevant national authority—either the Secretary of State or Scottish Ministers. Proposals by operators and RFAs require ratification by the ORR. In their considerations RFAs and operators will take into account a wide range of matters, some of which can be expressed in quantifiable value-for-money assessments. The closure guidance sets out an objective test that must be satisfied if closure is to be permitted. In brief, the test ensures that a closure cannot be pursued in England, Scotland or Wales if the benefit to cost ratio of retaining the service, station or network is 1.5 or more. Where the closure proposal comes from a train or network operating company in relation to a station or network, the operator must carry out an appraisal in accordance with the guidance before submitting it to the national authority, which will then evaluate the appraisal as part of its consideration of the proposal.
Schedule 7 to the 2005 Act sets out the requirements on how a consultation about a closure proposal must be initiated, which I hope will give some comfort to my hon. Friend with regard to what may be planned for the stations in his constituency. The schedule also states that the consultation should be carried out in line with the closures guidance. When initiating a consultation, the 2005 Act requires: that a notice be published with details of the proposal for two successive weeks in a local newspaper circulating in the area affected by the closure and two national newspapers; that the notice sets out the date when it is proposed that the services in question are withdrawn or the network or station closed, as well as other details of the proposal and an address where the initial assessment following the closures guidance and a summary of the results of the assessment can be obtained, and the fees payable, if any, for a copy of the assessment and summary. There will be questions on this afterwards.
The 2005 Act also requires that views on the proposal should be sent to the organisation carrying out the consultation by a date at least 12 weeks after the date of the second notice published in local and national newspapers, and that copies of the notice must also be published at stations affected by the proposal. The following organisations must be sent a copy of the notice and a summary of the results of the initial assessment: the relevant operator; the relevant national authority; the National Assembly for Wales, if the proposal affects Wales—which, of course, this one does not; the Mayor of London, if the proposal affects Greater London; every passenger transport executive whose area is affected; every local authority in whose area people might be affected; the Rail Passengers Council, more popularly known as Passenger Focus; all RFAs party to financial arrangements that may be affected by the proposal; all bodies providing railway services that are affected; all bodies providing station services affected by the proposal; and any organisation designated by the Secretary of State as representing the interests of passengers. It is clear that the closure process is very long. It intended to be that way so that consultation is maximised.
To conclude, Network Rail has produced the route utilisation strategy for the north-west to set out its views on the future of rail services in the area. My hon. Friend should be assured that that does not constitute any formal proposal for the closure of Denton or Reddish South stations and, should a formal proposal be put forward, ample opportunity for consultation will be provided. Studies such as the south-east Manchester multi-modal study will be taken into account. Neither is the strategy an opening of the floodgates for network-wide closures. As a result of this debate, I am sure that Network Rail will appreciate the degree of concern about the matter, and consider carefully what my hon. Friend has said when assessing the results of its route utilisation strategy.
Locally Produced Food (Somerset)
I am grateful and delighted to have secured this debate, which is important for Somerset. Let me say at the outset that the other Members of Parliament from Somerset would all have liked to be here. The hon. Member for Taunton (Mr. Browne) is in his place, and I am told that my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) might turn up, but the hon. Members for Somerton and Frome (Mr. Heath) and for Yeovil (Mr. Laws) would also have liked to be here to discuss what is an incredibly important issue to us.
Local food is the lifeblood of Somerset and its economy, because we have hundreds of small producers. To paraphrase the famous sayings uttered by the well known Thomas Cranmer in 1549—even you might not remember that, Mr. Atkinson—“You are what you eat.” That was sensible advice at the time, and hon. Members can see that I am living testament to the excellent Somerset produce.
Our county has only two significant industries—tourism and agriculture. The first is subject to the whims of the weather and how many euros one can get to the pound. The second is forced to dance to the tune of Whitehall, Brussels and, I am afraid, major supermarkets. Both those industries are firmly and at all levels tied up with local food. Many of the visitors who pick Somerset for their summer holidays come deliberately to sample our local fare. We have cheeses like no others in Britain, fruit and veg that are the envy of everyone and, dare I say it, cider to die for; indeed, if one drinks too much, one might actually die of it, of course. The excellence of local produce is infectious. I have been known to queue for more than an hour just to buy my favourite local bread. I am afraid that that might be a testimony to my tummy. Merely mentioning it brings back a slightly warm aroma.
Somerset farmers have fine-tuned their production to meet the growing market. I had little idea how extensive the market was until my wife Jill started making jam and selling it. She started by selling just a few pots in farmers’ markets. Then she sold a few dozen, and now she sells a few hundred. Even in our little village, whose population is tiny, there is a lucrative jam industry, but it does not hit one in the eye and people do not know about it because there are no ugly industrial units. From the humblest domestic kitchens across the county, mouth-watering goodies are being produced. Many other small organisations are producing ceramics and all sorts of other things.
I intended to offer the Minister a jar of Jill’s latest recipe—I think that I might have to declare her jam as an interest—but temptation got the better of me. However, as the Minister and my right hon. Friend the Member for Wells, who is just coming to his place, can see, I have brought a jar of mincemeat made by one of my constituents. Unfortunately, it is half-empty because my son and I got the better of it and removed half the pot.
It is important to say that the local food industry is vital. Indeed, it is no exaggeration to say that jam making is one of the highest turnover, high-profit elements of a huge, hidden economic power house. We are talking about millions of pounds in Somerset and hundreds of millions in the country’s economy. The industry is a giant money-making machine, but it does not roar like a giant, because its integral parts are mostly tiny, starting with one-woman or one-man businesses.
I am full of admiration for the hon. Gentleman for securing this debate. Following his mention of cider and his point about the economic importance of local produce, I want to draw attention to some of the producers in my constituency. Cumulatively, Sheppy’s cider, Exmoor Ales and Cotleigh Brewery employ 25 or 30 people, so they not only make first-class products but are an important part of the local economy. I hope that the hon. Gentleman will expand on that point.
The hon. Gentleman gives me a reminder. The produce of that phenomenal brewery has been tasted in the House of Commons and was very well received by hon. Members.
However, I did not initiate this debate just to sing the praises of the producers or to urge fellow hon. Members to get stuck into Jill’s jam or anything else. There is a serious issue. The more I see of local food production, the more concerned I become about the haphazard manner in which such a vulnerable industry is nurtured. The other day, for example, the nice people from Business Link—and I mean that—got hold of my wife, metaphorically speaking. Business Link is indirectly funded by the Government, and it is in business to help business flourish—that might sound obvious, but I shall come on to that point.
That objective is fine if it works, but Business Link had called to help Jill with setting up a website for her jam. She was stuck up to the midriff in simmering marmalade at the time. No offence to the guy—he was very nice—but the idea was not practical to her, because she did not have time to concentrate on it. It is impossible to navigate the worldwide web with a wooden spoon dripping with jam, but the real-life Business Link angel was there to see her through the red tape. If he had done that and that alone, that would have been much better. I have talked to people since then and they have all said the same thing. Why can Business Link not help with the red tape?
The point that I am making is not a criticism—please do not think that. It is a practical observation of the situation. I get the distinct impression that—I say this advisedly—many organisations that are established to help small businesses have no concept of how many small business there are. Perhaps we as hon. Members are guilty of using the phrase “small is beautiful”, but not recognising the value of “tiny”, because they are not mutually exclusive.
Local food producers in Somerset can collectively punch way above their weight, but they are almost invisible to everybody otherwise. They have had to rely on their own networks and outlets, and most importantly their own efforts, largely because some of those who might be able to help them have unfortunately not learned to think outside the box in which they are placed.
I entirely agree with the sentiments that my hon. Friend has expressed. Would he support a parallel initiative to try to persuade the public sector to buy locally? I am thinking of local authorities, schools and local hospitals in Somerset which ought to be buying Somerset produce. I am aware of EU directives for fairness in procurement, but I understand that there is latitude to allow local authorities to buy locally—to secure taste, freshness and other qualities—that would circumvent any legal restrictions. The people for whom those bodies would be buying produce would also be getting the best food in the world at competitive prices.
I thank my right hon. Friend and agree with him absolutely. There are two parts to the question. The first, which I am sure the Minister has heard about, is about the ability of such bodies to do what they want or otherwise in Europe. There are little local schools in all our constituencies in Somerset, and little organisations up to the county and district level; yet it has always struck me as bizarre that when one asks them, as I have, where they source their food from, they do not know. One of the problems—this comes back to the word “tiny”—is that we are good at being able to buy bulk for schools, but we are unable to buy locally. The purchase managers of schools and other organisations are not able to think outside the famous box. I hope that the Minister will take on board the comments about Europe, because we need guidance on that. With the right wind, I am sure that the county councils and district councils can take the idea on board. I shall of course come on to Somerset county, as my right hon. Friend and the hon. Member for Taunton would both expect me to do.
Others are beginning to learn. When this Adjournment debate was announced towards the end of last week, my phone got red hot. First, there was the Minister, clamouring to know which Government agency I was likely to attack in my speech—I am sorry to disappoint him, but there is nobody. Then came the lobbyists, and to date I have had every major supermarket chain bending my ear. Food pressure groups have done so, too. I have been quite surprised at the amount of lobbying, and the Minister knows that. Many people provided enormously useful information, some of which I shall include in my speech. It proved to me how slick and capable the food industry is at getting its message over, and how slack some agencies that should be helping food producers have become.
Nobody called me from Somerset Food and Drink. It is supposed to be the local, premier focal point for anybody who wants to know anything about food production in the county of Somerset. Somerset Food and Drink is run by the county council, but I am afraid that it was a totally silent advocate. I did not get anything from the council, and it was well aware that the debate was taking place.
On the other hand, Somerset Food Links, a non-profit-making company set up by South Somerset district council in the seat of the hon. Member for Yeovil, was incredibly helpful; it had a very good website with up-to-date information, and it could not have been better at supplying the information that I required. I guess that that is not surprising: Somerset county council is ruled—dare I say it—by a bunch of Daleks who want to exterminate all five district councils and turn the county into a faceless unitary authority. It does not grasp the importance of local government, which has come to my aid, so how on earth can we expect it to understand the importance of local food or of saying “buy locally”? Daleks, after all, are constructed from upturned dustbins with sink plungers for arms. They cannot climb stairs, and nouvelle cuisine is somewhere beyond Gallifrey.
Come to think of it, I also did not hear a squeak from the funded South West of England Development Agency. I am disappointed about that, considering that I had a meeting with its representatives recently. Its motto is to encourage enterprise and improve communications. It did not communicate with me and it did not seem desperately anxious to encourage anybody’s enterprise. Even a little e-mail would have been nice, and welcome. I would have used it.
The Minister will have come across Taste of the West. It is a limited company, but it has received funding from Europe, the Countryside Agency, which is now called English Nature, and Food from Britain. One way or the other, the Government have contributed. I am sad to report that apart from an approach by one of my own side, Taste of the West has not been in touch either, although I believe that the chairman or chief executive is ill, so that is understandable.
Towards Devon and Cornwall, there is a bizarre bias that all producers in Somerset have suffered at one time or another. When I trawled through the published information, I found that the mentions of Somerset were limited and small. That is a grave pity, and it suggests that Somerset is not worthy of serious mention. All five Somerset Members of Parliament resent it, and we have taken on Avon as well as everyone else.
My abiding concern is the same as my observations about Business Link. Nobody is able to think outside the box and laterally to increase the production and purchase of local food. Taste of the West always boasts about organising seminars. That is fantastic; no problem, it is great. However, if one struggles single-handedly to stack crates, make fresh medlar jam, cider, beer or anything else, one does not have time to go to Exeter, where the events are mainly held, to listen to a day’s seminar. One is physically unable to do so.
Taste of the West also gives awards. That is great—why not? It is good for morale. However, to qualify that point, if one looks at its website, one sees that the winners are predominantly paid-up members of Taste of the West. It is difficult to understand why one must pay a fee to enter a category to be presented with an award. Why cannot the organisation be made more open? The Minister has a say. Will he please ask it to make itself more accessible to all local producers? I am sure that his officials will have looked at the website and seen how many producers are on it. There are only 20 from Somerset, and they are concerned with meat and fish. That cannot be right. I know that there are more, and there are certainly more in my constituency.
If the Minister says, “Fine, what has this got to do with me?”, the answer is that he has a considerable interest in the matter. Recently in Downing street, Taste of the West showed off its wares marvellously with David Fursdon from the Country Land and Business Association. Taste of the West is on good terms with the highest levels of the Government. It also seems to have psychic powers. As the Minister and I have discussed, I was told that it wanted to get in touch with me about my speech. My speech was sent to the Minister on the understanding that he could consider it and reply; I was concerned that it had appeared elsewhere and that I was being pursued. I suppose that I could call that a very locally and organically grown “leek”, and leave it at that.
Local food in Somerset needs a huge dose of joined-up government. Most of the time, the spirit of free enterprise means that small producers tick over very nicely, thank you, because they make produce that people are prepared to go out of their way to buy.
I am grateful to the hon. Gentleman for giving way to me a second time.
Before the hon. Gentleman brings his remarks to a close, will he touch on the huge environmental benefits that flow from people buying locally produced food? For example, such food involves a reduction in food miles compared to food imported from elsewhere in the country or abroad. Furthermore, supermarkets use a huge amount of packaging; food from farmers’ markets and local sources is sold in a preferential way to the customer to reduce the environmental impact.
I could not agree more. All Somerset Members have been vocal in supporting our farmers’ markets; I certainly know that the hon. Gentleman has supported them in Taunton. He is absolutely right: why send Brussels sprouts from Kent to Scotland to be packed, only for them to come back down again?
Unless we grasp the importance of helping these little tiddlers flourish, their growth and prosperity will be limited. Let me give a couple of live examples of why the excellent markets in Somerset, run by the likes of the women’s institutes, have faithful followers. The good Somerset ladies lean on their culinary reputations; hon. Members may be glad to hear that as yet they have found no need to get their kit off for calendars. The fashion of farmers’ markets is growing too. In Minehead, at the western end of my constituency, there is now an excellent weekly one; there never was before. However, at the other end, in Bridgwater, there are problems and the farmers’ market is teetering. There is room for 60 pitches, but a couple of Fridays ago only six stallholders turned up. The local authority is beholden to provide extra cash so that the market can survive.
I ask the Government where Business Link is when we need it. Where is Somerset Food and Drink? Even Taste of the West could provide a little funding, although I know that that would be more difficult. Instead, the buck seems to stop at the door of the district council, which is threatened with extermination for helping local food. That cannot be joined-up government, and I hope that the Minister realises that we can do a lot better.
Another factor faces Bridgwater market. Bridgwater is well served by supermarkets—actually, to be honest, it is crawling with them. However, I remain to be convinced that supermarkets are offering locally produced Somerset goods. Asda, for example, was kind enough to furnish me with a glowing testimonial to their interest in local produce. This is what it said:
“ ‘Local’ to us means a locally produced, local taste delicacy or brand, recognised as local with customer demand locally.”
It went on to say:
“Suppliers normally start by supplying one store in their locality”.
Right. It also said:
“We encourage direct local store input into the product range—store managers are empowered to find local suppliers. We have close to 400 local suppliers currently active”.
I bet other hon. Members with constituencies in Somerset could not find them; I know that I cannot.
Unfortunately, that is the national, not the Somerset, picture. Apart from a hunk or two of local brie, there is very little evidence of the local in my local Asda. I do not hold it responsible; I understand its need to offer bargains to justify a bottom-smacking TV slogan such as “Always cutting prices”. However, that will not help little jam makers in my neck of the woods. If I may say so, the Minister is stunningly turned out this afternoon, but I very much doubt whether his suit came off the Asda shelves at twenty-five quid. Any retailer who can offer such prices is undercutting everybody else. I do not expect him to reply; he is giving me a look from a sedentary position, which may mean that I am in trouble.
If Asda can bring the £25 suit to Bridgwater, however, what can we suppose it will pay for somebody’s jam? The truth is that the jam made by people such as my wife cannot be churned out in sufficient volumes to satisfy supermarket demand, let alone meet those supermarkets’ margins. I am not anti-supermarket—nobody should be—but I want to encourage what is best in my county. I believe that the power of the supermarket chains could be exercised with much more of a social conscience. Again, in a sense that is not a ministerial responsibility, but perhaps there is a moral argument that we should all be looking at to try to address that point. Local producers in Somerset do not want to be mollycoddled. They know what they are doing, they have learnt the hard way and they are surviving. Most of them are glittering stars. They are growing bigger, and a few, such as Yeo Valley, the yoghurt company, in the Bridgwater area, have turned into big national operators. Most are doing the job that they were set up to do. On Exmoor during the foot and mouth crisis, if it had not been for local food we would have had a problem.
This is a little industry with a big heart and a little roar that is doing a good job. I hope the Minister would agree. If we can join it up, we will have a great future for all local producers in Somerset.
I am sure that the whole House would agree with the hon. Member for Bridgwater (Mr. Liddell-Grainger) that locally produced food is of real importance. I strongly support the remarks made by the hon. Member for Taunton (Mr. Browne) when he talked about the importance of reducing food miles and ensuring minimal packaging and the capacity of local food to deliver those environmental benefits.
At one point this afternoon, Mr. Atkinson, I thought that I might have to seek your guidance on how to decline tactfully the bribe of half a jam jar of mincemeat. Fortunately, that did not materialise although I believe that it is still in the possession of the hon. Member for Bridgwater. On a slightly more serious note, I wonder whether he might need to seek your guidance to declare his interest in Jill’s jam.
I shall focus on what the Government and others are doing to encourage the growth of the regional and local food sector both nationally and in the south-west, and particularly in Somerset. In doing so I hope to paint a less gloomy picture than the one described by the hon. Gentleman. If I want to set out the broader context in which our support is being delivered, I shall have to speak quickly, because only eight minutes of the debate remain.
There has never been a time when food and how it is produced has been so high on the public agenda. That is generally perceived to be the case. Yes, our vision for food and farming is driven by economic goals, but it is driven by social and environmental goals, as well. The industry needs to be profitable in the marketplace and be based on skills, innovation, investment, branding and quality, not on the generosity of the taxpayer. The taxpayer has a role in promoting responsible food consumption, taking account of social, economic and environmental sustainability. Consumers want information to help them to make informed decisions, but producers have a key role to play and they will flourish by providing what customers want. One way for farmers to achieve that is through differentiation and reconnection with their consumers.
Consumers continue to seek value for money, but that is no longer their only concern. They also want quality assurance and to buy products that reduce or minimise environmental impacts. Those are all opportunities that producers can now exploit. That is borne out by research conducted last year for a report commissioned by Food from Britain that showed that 65 per cent. of shoppers claim to buy local produce when purchasing food and drink. The top reason to buy local is freshness, which was chosen by 64 per cent. of consumers, with the next in the ranking being support for local producers, chosen by 31 per cent., and a concern for the environment, chosen by 25 per cent. Those are all pointers to why there has never been a better time to go into local food production, whether it is cheese making, cider brewing or jam making.
Our sustainable food and farming strategy sets out our comprehensive long-term plan for the future development of the industry. The strategy identifies how the Government will work with the whole food chain to ensure a sustainable future for English farming and food. A range of different measures under the strategy is already in place and is contributing to strengthening the food chain at national level.
Since 2000 we have awarded more than £14 million in grants given under the agriculture development schemes, including awards to the English Farming and Food Partnership, the Food Chain Centre and the red meat, dairy and cereals industry forums to improve competitiveness. Our food industry sustainability strategy has been drawn up to help the sector to contribute to the UK’s sustainability goal through its impact on producing healthy food and balanced diets, and on energy consumption, water use, waste generation and transportation. The larger-scale food processors and retailers have committed to the aims of the strategy. We are addressing the need to encourage greater efficiency in the UK food chain through our support for the Food Chain Centre; likewise, our support for English Farming and Food Partnerships seeks to increase co-operation between farmers and the rest of the food chain.
Under our regional food strategy, we are providing £1 million a year until 2008 to support the quality regional food sector in England. Our support under that strategy, which began in 2003, has given us the means to act decisively to support and encourage a flourishing regional food industry. I agree with the hon. Gentleman about the need to take a strategic approach to the promotion of regional foods and to ensure greater co-ordination between bodies with an interest in that work, but I hope to persuade him that the assistance available to such businesses is not quite as haphazard as he fears.
In England, Food from Britain takes the lead in the delivery of a national programme of activities focused on trade development, raising consumer awareness and increasing business competitiveness. The type of activities included in the programme are: attendance at international and national food shows; meet-the-buyer activities involving multiple retailers; development of a guide to working with the food service sector for regional food producers; raising the profile of Britain as a food destination to tourists via a three-year marketing agreement between FFB and VisitBritain; producing a “How to Export” guide tailored to the needs of regional food and drink producers; working with the Institute of Grocery Distribution to produce a guide to distribution in order to help regional food producers overcome problems with supply chain logistics and learn about schemes throughout the country that have helped producers find new markets; and a pilot benchmarking programme with regional food producers in the south west.
In turn, FFB works closely at regional level with the various English regional food groups who support the national programme. In the south-west, the work is being carried out by Taste of the West, which was mentioned by the hon. Gentleman. I shall say more about its excellent work—but privately, afterwards, rather than rehearse it now.
We are now into the fourth year of our programme of support, and it is worth highlighting the key outputs to date. More than 4,000 producers have been supported by the national programme of activity. Total sales generated to date—a key indicator—are worth about £6 million, and they continue to grow. All that work is complemented at regional level by the regional development agencies, which encourage food hubs and shared distribution facilities and marketing. I am pleased to say that an independent economic evaluation of our regional food strategy carried out in 2005 concluded that Government intervention in the sector is justified and that the programme of support is tackling the market failures identified in the sector.
On all that work, I understand that there is regular contact between Somerset Food Links and Taste of the West so that each knows what the other is doing. However, I shall pursue that point with the hon. Gentleman another time—perhaps over some samples of his regional produce.
One of the first ports of call for a budding business is likely to be Business Link. I was sorry to hear that the hon. Gentleman’s wife did not find the offer of assistance in setting up a website helpful. I understand that the offer was made by Connecting Somerset, whose role is to aid new and existing businesses in broadband, IT and web development. For small local food producers, many of which are based in rural areas, websites can offer a valuable and productive route to market. As the hon. Gentleman said, the role of Business Link is to help businesses flourish; it includes the provision of advice on regulatory requirements, sources of funding and marketing, as well as on e-commerce. Officials have spoken to Business Link Somerset, and I understand that its advisers would be pleased to speak to the hon. Gentleman’s wife about the business support that they can give. I believe that I may have won my half a jar of mincemeat.
One Business Link Somerset initiative of particular relevance to this debate is the specialist focus on helping female entrepreneurs, in response to research showing that women launching a business are not always given the same level of attention from banks and other more regular sources of support as their male counterparts. I understand that Business Link has organised a “Women in Enterprise” event on 27 February at Bridgwater’s Exchange, and I urge the hon. Gentleman’s wife to find out more.
I would also like to mention the rural enterprise gateway service provided through Business Link Somerset, which works on the basis of facilitated groups of land-based businesses working towards common aims. The service offers access to specialist advice, access to information from the knowledge base and access to training. Since 2005, 225 companies have been assisted through the gateway to improve their performance. Some of the Somerset groups benefiting from that initiative include the Somerset orchard group, Somerset farmers’ markets and the Somerset women’s rural enterprise splinter group.
Earlier, I highlighted the growing consumer interest in regional and local food, and I outlined how we are helping producers to adapt in order to meet that demand. However, I recognise the need for us and others to facilitate more local sourcing by providing funding to address issues such as distribution, marketing and the encouragement of new outlets.
It being Five o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.