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Rail Network

Volume 476: debated on Wednesday 21 May 2008

I am pleased that the Under-Secretary of State for Transport, the hon. Member for Glasgow, South (Mr. Harris), will respond to this debate because he understands railways very well; he is enthusiastic about them and has been in his post longer than most of his predecessors.

There was an age of the anorak when bewhiskered men met over pints of mild in pubs to discuss schemes for reinvigorating the railways to pre-Beeching days, while comparing timetables with one another. Many schemes were thought up, many were impractical and some were doable, but in those days there was widespread frank indifference and scepticism at the Department for Transport. At the time, there were severe problems with the railways. Network Rail—Railtrack as it then was—had substantial financial problems and was more concerned with managing its property portfolio than the railways, which led to its ultimate demise.

I was a member of the Select Committee on Transport and I remember how preoccupied we were in those days with the problem of financial overshoots and the difficulties surrounding the railways as they were, without considering how they might be or how we could progress. To be fair, the Government were coming to terms with the after-effects of railway privatisation—the fragmentation of the system, running franchises, ensuring that the public interest was protected and so on. They were genuinely worried, as was the Treasury, about financial overshoots in the industry—in those days they were an horrific and appreciable headache. When the current Chancellor was Secretary of State for Transport, he talked about cutting down the railways and not transporting fresh air around the country. The perspective taken on the railways in those days—the age of the anorak—was negative.

That was replaced by what I can only describe as an age of relative optimism. When I first came into Parliament, I had many conversations with Network Rail, which told me insistently that its sole job was to run the railways as they stood, according to the Government’s specifications. Subsequently, the organisation started to be more positive, and to talk about growth fund, expansion and increased capacity. It started to talk proactively about what the railways might be, rather than what they were at the time.

That was against a background of capacity problems. It was obvious that having been a financial black hole, the railways were becoming a significant success, but capacity problems arose because, whether due to the difficulty of getting around in cars or whatever, it was clear that more people wanted to use the railways and the infrastructure and stock were not coping well, so overcrowding became an issue. At the same time, it was evident that profitability was up, along with ridership. Crucially, confidence was also up; there was substantial confidence in the railway system and what it could be compared with what it had been.

At around the same time, I remember attending meetings in this place and elsewhere when people talked in heady ways about what could be done to increase capacity in the railway system. I attended a conference with the Minister where Christian Woolmer and the usual folk from Transport Times made bullish and positive noises about what could and should happen. Clearly, there was and still is a degree of private financial interest in the railways. Firms such as the Kilbride Group and so on sensed that the railways could be a financial winner rather than a financial loser, and both the Government and the private sector started to look forward rather than backwards, or simply at maintaining the existing infrastructure and railway system.

A number of positive ideas came from that. Some were relatively modest—for example, ways of increasing capacity without involving major new investment. There was talk about increasing capacity by doing simple things such as lengthening platforms and having better interchanges so that people would find the railways genuinely more useful, particularly if they also used other modes of transport. There was also talk about increasing rolling stock, having new and longer trains, and so on. Quite simple things were thought to be a way of dealing with capacity without great financial significance; for example, better timetabling so that trains would be more convenient and the timetables for various franchises would dovetail beneficially.

I have heard, but not seen, that the devolved Administration in Scotland is planning to build new lines or to reopen old lines that have lain fallow. Rail schemes have started to appear in regional transport plans. When regional transport forums were set up, it was uncertain whether transport plans involving rail were within their remit, but some introduced them and were not discouraged by the Department for Transport. Merseyside in Lancashire, where I live, was delighted that schemes such as the Olive Mount Cord were reinstated, because it was long overdue. Quite ambitious projects, such as Crossrail—I suffered it in the sense of having been on the Committee for longer than I can account for—went ahead, which was a good sign of confidence and optimism, although we have yet to see Crossrail. At the same time, rail utilisation strategies emerged. They are an invitation for Network Rail and its partners to take a long view of the railways and to think about how we can use them better and make them genuinely more useful for the travelling public.

However, in reality and despite all the optimism, adjustments, variations and minor developments, many good schemes are stuck in the sidings, and there has been little real progress in extending the network. Some schemes have a sound commercial basis, indicating that we can add substantially to network functionality and give people additional reasons for using the railways. I have thought long and hard about why that is so. Part of my explanation, but perhaps not the complete explanation, is that there is no method for progressing good schemes that would enlarge and extend the railway network.

I was a member of the Standing Committee that considered the Railways Act 2005, when the right hon. Member for Harrow, East (Mr. McNulty), now the Minister for Security, Counter-Terrorism, Crime and Policing, made two comments that have stuck in my mind to this day. He said—although I have never had any further intimation of this—that the Department for Transport was investigating small-scale railway schemes that might or might not be of use to the railway network as a whole, but that had been cashiered by Beeching and afterwards. He said that research was being conducted, but I do not know whether it has seen the light of day, and I have certainly not seen it. That was intriguing, because I was interested in one such scheme.

Another point made by the right hon. Gentleman stuck in my mind because it seemed so counter-intuitive. We were dealing with a number of clauses covering the closure of railway lines. There were at least 20 clauses on how to do that, and on the procedures that had to be followed. In my innocence, I asked why there were no clauses about how to reopen a railway line, which must be equally problematic. I do not know whether the right hon. Gentleman was just being sardonic, as he is often inclined to be, or just saying what he thought, but he answered, “Well, the reason why we don’t have such a clause is because everybody knows how to do it. It is all very straightforward.” I think that Hansard will verify that he said something very like that.

I thought to myself that that had not been my experience. It appeared to me that a new railway scheme designed to extend existing services, rather than merely complement them, needed the compliance and support of a number of crucial partners. For example, it needs a fair wind from the local councils. It must fit in with their strategic plans and transport interests. It needs the co-operation, endorsement, imprimatur and research capacity of Network Rail, which is the only body that can say how much the scheme will cost. It needs a compliant and helpful set of signals—not railway signals—from the operator of the franchise in the area in question, which has to say that there is a solid and decent commercial case for the proposal.

Such a scheme needs to be embedded somewhere in regional transport plans. We all know that these days if something is not in a strategic plan, it generally does not happen. Regional transport forums progress schemes at an almost glacial pace, but if we want a scheme to succeed it is better in the plan than not.

A scheme needs the co-operation of local transport authorities, which sometimes have cross-boundary disputes. A relatively ambitious scheme might cross the boundaries of more than one local transport authority, and they have to be singing from the same song sheet. The scheme that I shall briefly mention later needs the co-operation of both Lancashire and Merseyside.

A scheme needs the carriage providers—the rolling stock leasing companies—to provide the assurance that stock of the right kind can be provided without appreciable additional running costs. Above all, it needs the support and endorsement of the Department, which is sometimes lacking. I once described the process as being like knitting fog, and I do not renege on that. A scheme needs, and in many cases fundamentally lacks, a leader and driver of change. For something new to be established, there has to be somebody with a direct interest in pushing it forward and uniting the disparate partners who need to co-operate.

I can illustrate that point with reference to my pet scheme. I am sure that many Members have pet schemes, and I suppose that if this were a one-and-a-half-hour debate, they would be here to speak up for them. Mine is called the Burscough curves, and is outside my constituency but has an impact on it. As far as I can see, it is self-evidently doable. It has been discussed with about 20 Transport Ministers over the years, but I and most people in the area still believe that it is deliverable.

In essence, the scheme involves uniting two stations that are in the same town and separated by about a quarter of a mile. The town is growing and becoming more prosperous, and it is an important part of both the Merseyside and Preston commuter belts. The scheme would join the Lancashire and Merseyside rail systems. Putting the curves in would have the real benefit not just of establishing better communication between two stations in one town but of joining two networks that are otherwise severed. There would be a link from one of the stations in Burscough to Southport, joining up the disparate spokes of the Merseyside electrical system, which is quite distinctive, being a third-rail system.

It is not my finding but that of Network Rail in its rail utilisation strategy that the scheme would dramatically increase the utility and use of the Preston-Ormskirk line, which is not overused. My constituency interest is that it would support access to Southport, because transport links are crucial to the prosperity of the Southport economy. It would reduce commuter flow to Liverpool by car and resolve the demonstrably poor linkage between the Preston and Liverpool city regions. Everyone agrees that there are a lot of good things about it.

In its rail utilisation strategy, Network Rail identified a clear gap in provision from Southport to Preston and to Ormskirk. In the local transport plan, Merseytravel has identified the need to link Liverpool, particularly its northern suburbs, with Preston and the central Lancashire city region. The Lancashire local transport plan identifies the need for a direct link from Preston to Southport, and in a recent consultation Sefton council identified those links as critical to the future of Southport as a retail, tourist and service centre.

However, the scheme is not happening. That cannot just be because of the cost, which would be £12 million at most. By the calculation of many people, not just of the anorak persuasion but those with hard commercial heads, there would be a 10 per cent. return on investment, which is well within the Department’s accepted figure. It cannot be lack of research, because plenty is being done. It might be because of cross-boundary issues and the lack of a single champion, or it might be because of other schemes that Merseytravel has cooking at the moment, such as the Kirkby to Headbolt lane and the Bidston to Wrexham connections. Those schemes are turning out to be more costly than we thought.

However, the reason why the scheme is not happening might be that the Department—not the Minister—needs to take a degree of ownership of such schemes and promote and encourage them. I am well aware that the unseen hand of the Department reaches over railway affairs on quite a local basis. I know that at times it appears to be hands-off, but its grip on the west coast main line, including in the reordering of stock, is well testified to, as I hear from the operating companies. Its involvement in the northern franchise, which comes from my constituency, is also a known fact. We were expecting new carriages rather earlier than we shall get them, which I understand is because the Department intervened to suggest that the new stock would be better sent elsewhere. I do not want to make any enemies, but the Department’s influence may be more pervasive than it might own up to.

I understand the Department’s anxieties and the squeeze on Government capital, and I understand such things as the high cost of signalling and the fear of cost overruns, although I point out that the Public Accounts Committee recently established that cost overruns are not unique to the railway sphere. They are just as evident in relation to roads. However, like other schemes, the one that I mentioned has a business case, the support of all the relevant partners and the prospect of increased functionality, more passengers, environmental gains and so on. If it still does not happen, something is going wrong and I would like to know what.

I know that we have community rail partnerships, with stations being prettied up, smiling volunteers and nice brochures. I am glad to see those brochures; I read them and enjoy them. However, the acid test of the new optimism, if it is still about, is that we get new or reinstated track, increased utility and more cars left at home. With all due respect to the Minister and the Department, we cannot point to that at present.

I begin, perhaps unusually, by congratulating you, Mr. Jones, on being able to stay in the Chair so long in this stifling heat. I wonder whether it is some kind of dastardly plan by Government and Opposition Whips to encourage Members not to be here but to be in Crewe instead. However, we will struggle on. I also congratulate the hon. Member for Southport (Dr. Pugh) on securing this debate. Such debates are very important for the rail industry, and it is the kind of debate that I enjoy. Despite the heat, I am glad to be here.

However, I begin by disagreeing with something that the hon. Gentleman said at the beginning of his comments. I assure him that the future of the railways is still the subject of intense discussion by men with beards and glasses of real ale, as much as it was in the pre-Beeching days, but perhaps with less effect. I am delighted that he acknowledges, albeit with some reservations, that the British railway system is a successful enterprise, in stark contrast with previous years. I thank him for his generally positive analysis. He reminded us that he was a member of the Crossrail Bill Committee. I should have known that, of course, by his pallor after having been hidden away for 21 months looking at the Bill. The House and the Government are grateful to all the Members who served on the Committee. He mentioned that every MP has a pet scheme, and mine is Crossrail.

The majority of the hon. Gentleman’s comments focused on the lack of reopening of new lines, and I want to address that before I come to my prepared comments. He takes a positive and genuine interest in the railways, and I know that he will be familiar with the White Paper that was published last July, “Towards a sustainable railway”. We made it clear in that publication that although we want to grow the railways—they are growing—we did not anticipate the opening of new lines in any kind of planned way at all.

The reasoning behind that is sound, and I have said this to the hon. Member for Lewes (Norman Baker) who speaks on transport for the Liberal Democrats. On one level, the opening of a line, of itself, creates no extra capacity unless there are train carriages to operate on it. The priority of the high level output specification that formed part of the White Paper is a massive step change in capacity on our railways; namely, the 1,300 new carriages that we are committed to procuring through the franchise process between 2009 and 2014. In essence, those carriages are already spoken for.

The hon. Gentleman referred to the allocation for Northern Rail, and I shall return to that later. A new railway line would not have any extra carriages if the carriages are already spoken for, so it is far too simplistic to say that growing the railway network in that way would result in any major benefit in terms of capacity to hard-pressed—literally, in many cases—commuters.

The hon. Gentleman said that there is no real method for progressing schemes. He may not remember this, but, as a Back Bencher, I too was a member of the Standing Committee that looked at the Railways Bill, which later became the Railways Act 2005. My right hon. Friend the Minister for Security, Counter-Terrorism, Crime and Policing was the Transport Minister in charge. I remember the exchange to which the hon. Gentleman referred, when he asked my right hon. Friend about the clauses for closing railways and noted the absence of any for reopening lines.

That is an entirely valid point to make, but I think, having been in this post for nearly two years and having seen for myself some of the processes that exist—in some cases, as a result of the 2005 Act—that processes for reopening lines do exist, although they are not particularly transparent and obvious. The fact that no authority or investor has taken up the challenge so far is less down to the lack of process and more down to the fact that no private company in partnership with the local sponsoring authority has yet been able to come up with a business case robust enough to justify the fairly significant levels of investment that would be required for such schemes.

The hon. Gentleman said that several schemes have had a robust business case attached to them, but it is not enough for there to be a robust business case attached to the construction of a new piece of track. That alone is not enough to justify the investment. What also has to be considered is which train operating company will provide services on the new piece of track, and whether those services will require extra public subsidy. The public subsidy that is almost always required in such circumstances must be taken into account in drawing up a cost-benefit ratio for any particular scheme.

I will tell the hon. Gentleman what I told a group of people who came to see me in my office a few months ago. They were campaigning in conjunction with the hon. Member for Lewes for the reopening of the Lewes-Uckfield line in the south of England near Brighton. Basically, they proposed a public-private partnership deal that would mean, in essence, that the Department for Transport would not have to put its hand in its pocket for the capital costs or for revenue costs following resumption of services on the line. I said to them that if they made the figures stack up, if they were willing to put in the investment, and if they could produce a business case that justified their optimism, I would consider that a step forward. I would certainly not stand in the way of such a scheme. At this stage, I have not seen evidence that sufficient progress has been made on that line, although I understand that more work is being done as we speak.

The Government and the Department have no vested interest in standing in the way of such schemes. It is only right and just that we point out that if public money is to be called on to sustain new services on a new line, we have the right and the duty to say that it can be spent only if it will actually produce value for money.

The hon. Gentleman made some points about Northern Rail. He is right, of course: the Department does not claim to be a hidden hand in the railway industry. I am careful to point out that the Department does not write timetables, although we are often accused of doing so, and that we certainly do not specify what type of rolling stock individual franchises must use, except in very unusual circumstances where there is a changeover of franchise, but that, nevertheless, there is a role for it in the management of franchises. The Department has officials whose responsibility is the oversight of individual franchises. That is necessary, and I am sure that the hon. Gentleman would not criticise it. Given the levels of public money involved in the franchises, it would be odd not to have that oversight.

However, I can tell the hon. Gentleman that, aside from the fact that Northern Rail receives £1 million of subsidy every day of the year and therefore is the recipient of the largest amount of subsidy of any of the rail franchises, it is also due to receive 182 new carriages from the high level output specification commitment. I would be interested to know how he divined the information that there was an intention to offer new carriages to Northern Rail but that subsequently a decision was make to revoke the offer, because my understanding is that Northern Rail actually does particularly well in terms of the number of carriages going to it. As far as I can remember, and off the top of my head, it certainly does better than the majority of the franchises, as it is one of the largest in terms of train movements.

I thank the Minister for that information. In fact, my informant, who fairly clearly worked out the figures, is the supplier of the carriages. However, to revert to a previous point the Minister made, I believe that everybody, anoraks included, accepts that a business case must be made. However, looking in from the outside, there is a sort of opaqueness as to what a business case sometimes needs to look like to satisfy the Department. One gets the sense from time to time—perhaps it is wrong—that the goalposts move, and that the hurdles that any scheme, even those not requiring subsidy, needs to get over are significantly higher every time it looks as though something might be done.

That is a valid point. I know that there is a lack of clarity, and a lack of confidence among many sponsoring authorities about what they actually need to produce in a business case. Let me make this offer: officials in the Department are willing to offer advice to any sponsors who need essential information about what needs to be included in a business case.

I reject the accusation that we have not grown the railway. More people are using the railway today than at any point in the history of the railway, outside wartime. That is a huge achievement of this Government—

It being Five o’clock, the motion for the Adjournment of the sitting lapsed, without Question put.