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Leaving the EU: Rail Industry

Volume 641: debated on Thursday 24 May 2018

The Government’s rail sector report was published in December and included an analysis of the rail industry. We keep our analysis under constant review. Our future relationship with the EU on rail will be a matter for the negotiations. Both the UK and the EU have greatly benefited from investment in each other’s rail markets. We want that to continue as the UK leaves the EU.

The Secretary of State will be aware that passengers in Scotland have been protected from the impact of fare increases as a result of the Scottish Government’s cap of RPI minus 1%. Will he not take a leaf out of the Scottish Government’s book to ensure that passengers are not hit in their pockets as the result of his Government’s inability to provide even basic certainty over Brexit?

I am not sure quite what that has to do with our future relationship with the EU, but I want the rate of increase of rail fares to come down. The biggest barrier to that is the Labour party’s and the trade unions’ insistence that the RPI measure has to be at the heart of every pay increase in the rail industry. The industry collectively needs to move to RPI, but the training manuals for the unions that back the Labour party insist that it is unacceptable to negotiate on anything except an RPI increase.

The Government often cite EU regulations on state aid as a constraint on their agency. Can we therefore look forward, after Brexit, to innovative new approaches to the public ownership of the railways, or will the Secretary of State continue to sell rail services to the state-owned companies of other EU countries?

We have a diverse rail market, with investment from the UK and international investment. I hope very much that after Brexit we will not become a country that does not welcome international investment. We are an outward-facing global nation, and I hope that will continue.

In the Secretary of State’s assessment of the rail industry post Brexit, did he include the vital nature of securing resilience in the coastal railway at Dawlish, given the link to Falmouth docks and the freight services that bring in exports?

I want to reiterate that this is an absolutely crucial project for our railways. Network Rail is currently doing preparatory work for the very necessary improvements at Dawlish. I have given an absolute commitment that those works will go ahead. I regard this project, to make sure a proper resilient railway for the future is delivered to the south-west, as the most important infrastructure project in the country. It is one thing having a railway that is not quite up to date; it is quite another having a railway that gets cut off. We will not let that happen.

The east coast main line will be very important following our departure from Europe. Will the Secretary of State guarantee that smaller operators, such as ScotRail, have a say in what happens to rail?

It is really important that we protect the interests of passenger and freight operators. I have been clear that the new board leading the integration and development of the London North Eastern Railway will have representatives whose job is to protect the interests of smaller operators.

EU rules clearly did not prevent the Government from taking the east coast franchise off Stagecoach last week, which shows their power to remove a franchise from a failing operator is not hampered by them. Given that this week we managed to pass 300 cancellations on the Lakes line in Cumbria since the beginning of April, and the enormous and catastrophic impact that is having on commuters, tourists and GCSE students trying to get to their exams, will the Secretary of State listen to the exasperated travellers of Cumbria and intervene to strip Northern of both its Furness and Lakes franchises—and do it today?

Let us be clear: the situation with Northern has been unacceptable. As I said yesterday, I will this morning chair a conference call with the Northern leaders. This is the most devolved franchise. It is a partnership between Northern leaders and the Department for Transport, but it is not solely led by the Department. None the less, it is no less important to me that we get this situation resolved. I am very clear that this problem has arisen for two prime reasons: the problems with electrification Network Rail is carrying out on the line through Bolton and the failure of Network Rail to deliver a finalised timetable in time. When the hon. Gentleman talks about the need to strip the franchise and renationalise, he is shooting at the wrong target. This is a Network Rail failure and it must not happen again.

We know that since rail privatisation the Secretary of State thinks magic money appears from nowhere with no risk to the taxpayer, but that is not the case. When it comes to infrastructure, the UK relied on £35 billion of loans from the European Investment Bank between 2011 and 2015. Where will that money come from for rail infrastructure post Brexit?

We are a substantial net contributor to the European Union, so the money given to the UK from different European funds actually originates in the UK. We will be able to spend our money in the way we see fit. We are of course spending record amounts of money on rail infrastructure to develop what needs to be a better, expanded and more resilient rail network.