Recent estimates by the Office of Rail Regulation suggest that the UK railway has costs up to 40% higher than comparable European railways. To secure a fair deal for passengers and taxpayers in the medium term, we must get the cost base of the railway under control. The Rail Value for Money study led by Sir Roy McNulty will report in the spring, and the Government will then respond to its recommendations.
We have recently completed a consultation on passenger rail franchising, and will publish our response in due course.
I think that my hon. Friend is referring to the so-called Beccles loop, a scheme currently being developed by Network Rail whose implementation is planned for December 2012. Network Rail is expecting a £1 million contribution from Suffolk county council. Subject to that, funds are available for the scheme, and it is expected to proceed on schedule.
I welcome the Government’s commitment to major rail infrastructure projects between our major cities, but does my right hon. Friend agree that the long-term sustainability of our rail network can be enhanced by smaller projects such as the completion of the east-west rail link between Bletchley and Oxford?
I entirely agree. When I surveyed the proposed route of the high-speed railway a few weeks ago, I had an opportunity to examine the alignment of the proposed link. We will shortly begin discussions about the programme of enhancements that the Government wish to secure for the next railway control period, which will begin in 2014-15, and I am sure that the project mentioned by my hon. Friend will be one of those that will be considered carefully.
The Rossendale to Manchester rail link is vital to economic development in Rossendale. Will the Secretary of State agree to meet representatives of the East Lancashire heritage railway board to explore ways of upgrading this heritage line to a commuter link?
I agree that good transport links with Manchester are vital to the regeneration and economic success of my hon. Friend’s area. I know that the local authorities in the area, together with Greater Manchester passenger transport executive, have been working on a scheme, for which the local sustainable transport fund that we have announced—or, alternatively, the regional growth fund—may be a potential source of funds. However, I or one of my colleagues would be happy to meet my hon. Friend.
With regard to the economic sustainability of the rail network, particularly in my constituency of Lincoln, does my right hon. Friend believe that it would be helpful and desirable for Network Rail to act more reasonably and wisely in its economic modelling, and to reconsider its proposal to close the level crossings in our city, including the one that dissects the high street, for over 40 minutes in every daylight hour, a proposal that will decimate my constituency’s economy and the wider economy of Lincolnshire?
I am grateful to my hon. Friend for that question. I am aware of the impact that the level crossing in Lincoln has on the life of the town. Indeed, I have a similar situation in my constituency. There is an issue about the way scarce and valuable time on level crossings is divided between the railway and the road user. That must be informed by some proper cost-benefit analysis. The good news is that some new barrier technology is under assessment, which might help us, through a technical solution, to reduce the amount of barrier-down time necessary.
If the railways are to be economically sustainable, passengers have to be able to get through the stations and on to the trains, and many disabled people still cannot access large numbers of stations and trains are still inaccessible. The Government have decided to abolish the Disabled Persons Transport Advisory Committee. What process will be put in place instead to ensure that the good work that has been done to improve access is not lost and that we do not go backwards?
I welcome the hon. Lady's question. The decision to abolish the DPTAC was taken because disability issues have been mainstreamed into the Department's assessment processes and disability factors are brought into the advanced planning of programmes at all stages. As she will know, there is a rolling programme of improving access at stations, which Network Rail is funded to deliver. That programme will continue through this control period and into the next.
I speak regularly to businesses in Wirral, which tell me that they benefit greatly from the improvements to the west coast main line driven forward by the previous Government, but they are extremely fearful of ticket prices going up by RPI plus 3%—excruciating rises at this fragile economic time. What can the Minister say in response to those concerns?
As I said in my opening remarks, we have a problem with the cost base of our railway and in the medium term there is no doubt that the challenge for us is to get that cost base under control, so that we can ease the pressure on passengers and at the same time ease the pressure on taxpayers. However, in the short term, the decision that had to be taken was simple: do we go ahead with investment in additional rail vehicles to ease overcrowding and improve the passenger experience or do we not? We have taken the decision that investing for the long term is the right answer for the United Kingdom economy.
It is good to be facing the right hon. Gentleman across the Dispatch Box for our first Transport questions. He again spent the last week all over the media, from “Newsnight” to “The Daily Politics”, pretending to be Chief Secretary to the Treasury, so I apologise to him for dragging him back to his day job. Why did he tell The Times that fares would rise by 10% over the spending review period when commuters are actually facing a hike in fares of 30% plus?
I welcome the hon. Lady to her place. Perhaps I cannot tell her and her sister apart and that is why I was responding to the shadow Chief Secretary earlier this week. She refers to a quote. On my arithmetic, RPI plus 3% for the last three years of the spending review period, with RPI plus 1% for next year equates to a 10% real-terms increase in the regulated average fare over the period of the spending review.
I have the quote in front of me. The right hon. Gentleman used a figure. He said this; it is in quotation marks, so he can tell me if he was wrongly quoted:
“If you are paying £1,000 for your season ticket now, it could cost you £1,100 at the end of the period”.
That is not saying that it is a real-terms increase of 10%. That is saying that it is an increase of 10% in total. His Government's own Office for Budget Responsibility predicts inflation of at least 3.2% from 2012. That will mean a rise of at least 6.2% a year, meaning that by 2014, fares will rise by over 30%. I would have expected better standards of arithmetic from someone who would rather be in the Treasury.
Let me try the right hon. Gentleman on another question. Why has he scrapped the cap on individual fares that we introduced? Does he understand that that will mean many fares rising by more than the 3% above inflation that he has allowed? Therefore, for the sake of hard-pressed rail users, who are already struggling thanks to other measures that the Government are taking, will he now abandon that stealth tax on commuters?
I think Members will understand that what matters is the real-terms increase in fares, and that is what I was referring to.
The hon. Lady asked about the average fare cap. She talks as if in the past rail companies were restricted on individual fares. That is not the case. There was always a basket approach until this year—strangely enough, a general election year. For this year only, the previous Government announced that that system would be abolished and that companies would be limited on individual fares. We have gone back to the basket system because it provides the freedom to respond.