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Private Sector Rail Investment

Volume 634: debated on Thursday 18 January 2018

5. What recent assessment he has made of the role of private sector investment in the rail industry. (903367)

The private sector has generated almost £6 billion of private investment over the past decade, providing new trains, upgrading stations and transforming the passenger experience.

I thank my right hon. Friend for that answer. The irony will not be lost on him that public sector satisfaction in the railways is declining as Government influence is at its highest since rail privatisation. What discussions has his Department had with Network Rail to change procurement and design practices so that the private sector can have more influence in funding and financing future projects?

I want to see both. We have just announced the biggest investment programme in our railways—over the period 2019 to 2024—since the steam age, including £20 billion of renewals. That is crucial: one of the reasons why we talk at Question Time about train delays is that the infrastructure in many places desperately needs renewal, which is why we are spending £20 billion on that. It is also important that we bring in additional private finance alongside that public investment, and I have been discussing extensively with Network Rail how we can make that happen.

The private sector can only bring in investment if it knows what the Government’s plans for infrastructure are going to be. Will the Secretary of State tell me now what the latest Government position is on the electrification of the trans-Pennine line?

I have just received the proposals from Network Rail, and we are now reviewing them. My aim is to start this £3 billion upgrade within a matter of months. The project is due to really get under way next year. We are looking at all the different options but, as I have said, electrification will be part of the programme.

Up until 1992, when the only investment in the railways came from the public sector, rail usage was declining. Since privatisation, we have seen a massive increase in the amount of people using the railways. Does my right hon. Friend agree that that is because of the changes that the private sector brought in?

I absolutely agree with my right hon. Friend. I do not understand the policy adopted by the Labour party. We are now seeing the construction of thousands of new carriages funded by the private sector, and we are getting rid of some of the legacy trains from the days of British Rail that were not up to scratch in those days and are certainly not up to scratch now. That is because private money is coming in alongside our investment programme.

The real question for the Secretary of State is: does he have the political will to ensure that the money is available to invest in the northern rail system in this generation? Not jam tomorrow. Trains today.

The answer to that is clearly yes, because every single train in the north of England is being replaced or refurbished as new. All the old Pacer trains are going, and we are about to start the trans-Pennine upgrade, which will account for one third of the total funding available for enhancement on the railway between 2019 and 2024. That is a large investment programme that will make a difference to the north, and it is a sign of our commitment to the north.

Following the sad demise of Carillion, will the Secretary of State confirm that he is carrying out a full review of the HS2 project, including the business case, to ensure that the remaining private sector companies have the capacity to deliver the project without serious overruns and extra cost to the taxpayer?

My right hon. Friend will be relieved to know that the demise of Carillion, a tragic event for this country and for corporate Britain, will none the less not affect the HS2 project. The existing contract is part of a three-company consortium, and the other two companies, Kier and Eiffage, are taking over responsibility for the project. The apprenticeships are being transferred, the staff are being transferred and the project will continue uninterrupted.

On 17 July last year, the day on which Carillion was confirmed in the HS2 contract, I asked the Secretary of State about the financial instability of the company. He declared himself to be confident that the expected results would be delivered. Given the unfolding events of the last few days, has he now reflected and does he now accept that he got it spectacularly wrong and that his judgment and confidence were disastrously misplaced?

I do not accept that at all. The hon. Gentleman referred specifically to the HS2 contract. At the time, I reviewed those carrying out the contracting very carefully, and I have carried out due diligence since. As I said a moment ago, the HS2 project will not be affected by this, even to the point, I am pleased to say, that the apprentices working with Carillion on the project are being transferred to one of the other two partners. The work will continue uninterrupted. There is no delay and there are no cost implications.

On Monday, The Times newspaper said:

“The transport secretary’s decision to award lucrative contracts to an ailing Carillion is only the latest worrying misjudgment to come to light.”

It highlighted his trip to Qatar on the day of the biggest rail fare hike in five years, the notorious £2 billion east coast bail-out and his dysfunctional dealings with trade unions in the private sector, saying that the Prime Minister

“needs to consider whether it is time that this transport secretary left the station.”

Has not The Times got it absolutely right?

The only station that I am going to be leaving is Euston station for a visit to the midlands this morning. There has been no £2 billion bail-out of Virgin Trains East Coast. The contracting with Carillion was actually not with Carillion, but with a consortium of companies that are equally responsible for delivering the contract and will do so. I am happy to stand here to defend the record of a Government that have done more for our transport system than has happened in decades. That is in sharp contrast with what the Labour party did over 13 years in government, which was very little indeed.