I wish to update the House on the Government’s comprehensive rail review, which we intend to use to build on the challenges facing a busy railway and in particular to deliver a network that is fit for the future and better serves passengers. I shall also update the House on the current performance of Northern and GTR.
For a generation before the Railways Act 1993, British Rail was in seemingly terminal decline. Passenger numbers were falling, stations were closing and short-term decisions were being made at the expense of the travelling public. The 1993 Act brought investment, new services and better reliability. A quarter of a century later, the situation is very different. Our UK rail network is at capacity in commuter areas, with many of the most intensively used lines in Europe. On many routes, it is simply not possible to squeeze more trains on to the network. As we now know, the railways were not in fact in terminal decline; they had been starved of investment. The period of privatisation has reversed the decades of decline and heralded the fastest expansion of our railways since they were built by the Victorians. It has also delivered billions of pounds of investment and radically improved safety. Our railways are now among the safest in the world.
Nevertheless, that welcome expansion has brought new, acute challenges. On major commuter routes throughout the country, the trains are packed each morning. Network Rail, which represents a third of the industry, based on spend, is nationalised. It is also responsible for more than half the daily disruption. But no matter whether it is a failure of the track, a fault with a train or a customer incident, it is because there is little resilience or margin for error in the system that, when things go wrong, the knock-on effect can last for hours. The problem is compounded because the railway is run by multiple players without clear lines of accountability.
When I took over as Secretary of State for Transport in 2016, I said that change was needed and started the process of bringing together the operation of the tracks and trains, which was split up in the 1990s so that we had single operational teams. That process is helping to overcome problems caused by fragmentation in some areas and creating a railway that is more responsive to passenger needs. I also said that that change needed to be evolutionary and not revolutionary, to avoid destabilising the industry, so we have started to shape alliances between the teams running trains and the teams running track to create a more joined-up and customer-focused structure.
The difficulties with the introduction of the new timetable over the summer and the problems that we are experiencing with many major investment projects has convinced me that the process of evolution is no longer enough. The collapse of Virgin Trains East Coast has also highlighted the need for radical change. Put simply, we need that change to ensure that the investment going into the railways from both the Government and the private sector results in better services for passengers and delivers the improved reliability, better trains, extra seats and more-frequent services that we all want to see.
Last month, my Department announced a root-and-branch review of how the rail industry works. Keith Williams, the deputy chairman of John Lewis & Partners and former chief executive of British Airways, is to lead the work, and I expect him to make ambitious recommendations for reform to ensure that our rail network produces even greater benefits for passengers and continues to support a stronger, fairer economy. Keith Williams’ expertise in driving customer service excellence and workforce engagement will be incredibly valuable as we reform the rail industry to become more passenger focused.
Keith will be assisted by an independent expert panel from throughout the country, with expertise in rail, business and customer service. The panel will ensure that the review thinks boldly and creatively, challenging received wisdom, to ensure that its recommendations can deliver the stability and improvements that rail passengers deserve. It will be supported by a dedicated secretariat and will now begin to engage with the industry, passengers, regional and business representatives, and others throughout the country, drawing on their expertise, insights and experiences to inform the review.
The review will consider all parts of the rail industry, from the current franchising system and industry structures to accountability and value-for-money for passengers and taxpayers. It will consider further devolution and the needs of rail freight operators and will particularly take into account the final report of Professor Stephen Glaister on the May 2018 network disruption, which is due at the end of the year and to which I shall turn in a moment.
When we establish what we think is the right approach to mend our railways, it must be properly tested and scrutinised independently. I have today published the rail review’s terms of reference and placed copies in the Libraries of both Houses, together with the names of the review’s independent panel. The review will build a rigorous and comprehensive evidence base, and it will make recommendations regarding the most appropriate organisational and commercial framework for the sector that delivers our vision for a world-class railway. The private sector has an important part to play in shaping the future of the industry, but it is important that the review considers the right balance of public and private sector involvement.
Some have called for the return to a national, state-run monopoly, and for us to go back to the days of British Rail. There is an expectation that taking hundreds of millions of pounds of debt on to the Government books will magically resolve every problem. This fails to recognise that many of the problems that customers faced this year were down to the nationalised part of the railways. It also creates the false sense that a Government-controlled rebrand would somehow make every train work on time. Those who make this argument fail to tell passengers that the much-needed investment that is taking place today would be at risk, and that taxpayers’ money would be diverted from public services to subsidise losses.
The review will look at how the railway is organised to deliver for passengers. It will look forensically at the different options, and then make recommendations on what will best deliver results in different areas of the country. In autumn 2019, the review will conclude with a White Paper, which will set out its findings, and explain how we will deliver reform. We expect reform to begin from 2020, so passengers will see benefits before the next election.
I have commuted for most of my career—over 35 years —and I still do. I am proud to be in a Government who are supporting a major programme of investment in rail, from Thameslink to the TransPennine upgrade, with new trains in the north, south, east and west. However, we cannot stand by while the current industry structure struggles to deliver the improvements that this investment should be generating. So it is time for change.
The review will not prevent us taking every opportunity in the short term to improve passenger experiences. That is our focus and that is why we are committed to an investment of £48 billion in the railways over the next five years.
Professor Stephen Glaister’s interim report has provided us with an accurate account of the series of mistakes and complex issues across the rail industry that led to the unacceptable disruption that passengers experienced earlier this year. We know that, in the north, delays to infrastructure upgrades, beyond the control of Network Rail, were a major factor in the resulting disruption. Richard George, the former head of transport at the 2012 Olympics, is now working with the industry and Transport for the North to look at any underlying performance issues so that they can be properly addressed.
In the four weeks ending 15 September, in the Northern rail area, more than 85% of services met their punctuality targets; the highest level delivered for Northern rail’s passengers since the timetable introduction in May. Northern is now running 99% of the May timetable and is running more trains than were operating in that region before the May timetable. We are working with Transport for the North and the industry to plan further uplifts in services, while prioritising reliability.
In the coming months, passengers across the north will begin to benefit from the brand new trains that were unveiled last week. The first trains are now operating in parts of the Northern rail area. There will be more than 2,000 extra services a week. Every single Northern and TransPennine Express train will be brand new or refurbished as new, and every single one of the old Pacer trains will be gone.
I now want to turn to Govia Thameslink Railway, which has new leadership. The reliability of its services has improved significantly: since the introduction of the interim timetable in July, 85% of its trains arrived at their station on time, and that performance has been getting better. In addition, in the past week, the first of the new Class 717 trains that will run on its Great Northern routes began testing. GTR is now operating 94% of the weekday timetable that it intended to run from 20 May, including, crucially, all the services in the busiest peak hours. By December, it plans to introduce all planned off-peak services, but there is much more work to do to improve performance, particularly at weekends.
Since the disruption in May, there has been intense scrutiny from the Government and the regulator, the Office of Rail and Road, on what went wrong and why. GTR must take its fair share of the responsibility; its performance was below what we expect from our rail operators. Officials in my Department are now taking action to finalise how we will hold GTR to account for the disruption. My hon. Friend the rail Minister will keep the House updated.
We need now to move forward and take action on these issues, particularly after the disruption that passengers experienced. We need to help passengers plan ahead; to ensure that we do everything we can to reduce delays and cancellations; and to ensure that we properly compensate disrupted fare payers. The review that I have announced today is very necessary. It will continue the approach and ensure that the rail industry is focused on putting the passenger first and that we maximise the benefits of this investment. The lesson of this summer is that it is now time for change and we will deliver that change.
I wish to thank the Secretary of State for advance sight of his statement, which was actually announced three weeks ago, on 20 September. Although the title of this statement is, “Rail Review: Terms of Reference”, he has not provided me with these terms or the names on the panel. Seemingly, the document sits in the Library, as yet unseen—a fat lot of use that is when we are here to discuss it.
The Department for Transport’s press releases are very fond of exaggerated claims, historical or otherwise, so the froth around the Secretary of State’s rail review announcement was to be expected. We were told that it would be “far-reaching”, “sweeping” and “root and branch”. Really? I am surprised that the Department did not say that it would be the most comprehensive rail review since the Victorian era, or since the time of Brunel, as it usually does. These absurd and ridiculous claims undermine rail policy debate and belie a tragic reality. His review is not far-reaching, sweeping or root and branch. It is none of those things. It is a predetermined prevarication and a way for him to cover up his disastrous failure to run the railway properly and to kick it into the long grass for a year. It offers precisely nothing to the millions of rail passengers who have endured months of misery since the timetabling crisis in May.
A Government review is one of the oldest tricks in the political book. It is usually a good way of kicking a difficult decision into the long grass, so fair play to him—or was it the Prime Minister’s idea? Under the Conservatives, over the past eight years, rail reviews have practically come along with the frequency of buses—McNulty, Brown, Shaw, Hendy, Bowe, Laidlaw, and Hansford. I could go on.
Is it not the truth that we do not need another review to tell us what is wrong with the railway? Why do we need a rail outsider to tell us what we know already? Is this the expertise that we need? Also, can the Secretary of State tell us how many days a month Keith Williams will contribute to the review? My sources tell me one day a month. Hardly worth the bother, is it? The fact that the permanent secretary at the Department for Transport was desperately ringing around retired rail executives urging them to join his review panel tells us something.
Does not this show that the Government are out of touch with the rail industry? What is more, the rail industry has called for public ownership to be considered as part of the review—it is the Rail Delivery Group if the Secretary of State wants the reference. This review has no credibility in the rail industry.
I know that the Minister told a conference fringe meeting in Birmingham last week that rail franchising is broken—I am pleased that we can both agree on something, but we differ on how to move forward. He thinks that bolting together operations and infrastructure into individual partnerships on the east coast or Southeastern is the way forward for rail. In fact, his review is simply a 12-month prelude to justifying this proposal, which no one in the rail industry takes seriously or thinks is workable. It is ironic that, as an ardent Brexiteer, he is doing so much to perpetuate a rail operation system that enriches those foreign Governments who own the majority of rail franchises. His review offers nothing for the private UK supply side businesses, which are the backbone of British industry. Will the review consider the roles of the DFT or the ORR? Practically everything starts or finishes with the Department. Will he suspend all current franchise competitions while this review is underway—Southeastern, East Midlands and west coast? Will he come back to the Dispatch Box and confirm that he will now reward the failure of Govia by re-letting the Southeastern contract to it in the coming weeks?
The rail industry and rail passengers have had a battering this year with failed franchises, a timetabling crisis and cuts to promised investment. There is an ongoing lack of leadership. Will not this 12-month review create even more paralysis, confusion and uncertainty when rail desperately needs stability? It is unacceptable that passengers on GTR and Northern face further inflation-busting fare rises in January. Will the Secretary of State support Labour’s call for a fare freeze on those routes—in addition to compensation?
We need to put the railway back together as a unified whole. The British public are crying out for an accountable railway. They are desperate for a system that is simpler and more efficient. Above all, our railways need to be run in public ownership for the public interest, and his review will do none of those things.
The hon. Gentleman says that he did not say that, but when he talks about an integrated state monopoly, what else is he talking about except for returning to the days of British Rail? Labour might give it a different name, but it will still be British Rail. The reality is that Labour Members cannot explain the benefits that their policy would actually bring, and their leader does not even know which part of the railway is privatised and which is nationalised. They say their policies will cost nothing, yet the Library says that even taking back control of the rolling stock will cost £17 billion. On the “World at One”, the shadow rail Minister could not even explain how Labour’s policy would work. [Interruption.]
The hon. Gentleman asked about supply-side businesses. Supply-side businesses in the UK are doing well at the moment because we are investing record amounts in infrastructure improvements and new technologies that will help performance on the railways. That is ensuring that we have a successful and now internationally competitive rail industry. The hon. Gentleman asked whether the review would look at the roles of the Department for Transport and the Office of Rail and Road. Absolutely; this is a root and branch review of the way the whole industry works.
The hon. Gentleman asked about franchises. As he knows I announced that information three weeks ago. I have taken the view that I do not want to remove the possibility of passenger benefits in the short-term—for example, the longer trains that I want to see on the Southeastern franchise. Therefore, I do not intend to halt a number of the franchises, but I have announced that I will not be going ahead with CrossCountry. Finally, he asked about costs in the industry. When I hear Labour Members line up with the consumer and insist that rail pay increases should be in line with the same inflation measure that everybody else uses, I will take them seriously on costs in the industry. But they do not; all they do is line up with the trade unions.
The Secretary of State alluded to the Glaister review, which was the last review that he commissioned. The interim report has revealed unmitigated incompetence from all parties involved—GTR, Network Rail and, I am afraid, the Department for Transport. How many more reviews, inquiries, investigations, statements and urgent questions will it take before GTR is at last stripped of its franchise, as all my constituents and those well beyond my constituency actually want?
As I said a moment ago, we are working through the final stages of our assessment of the position with GTR. The decisions that we take will be designed to deliver the best outcome for my hon. Friend’s constituents and other passengers. I do not want to take a decision that works against their interest, and I am happy to talk to him about ensuring that we get this right.
I thank the Secretary of State for early sight of his statement. During a previous statement on 4 June—after yet another rail shambles—I asked the Secretary of State to admit that the rail franchise system is broken and to do something to fix it. In that regard, I kind of welcome this review, as long as it is actually thorough and the Government abide by any conclusions that the system is broken and needs to be completely remodelled.
How are we going to get oversight of the rail experts who are needed to sit on the panel? After hearing the statement, I think that we can safely say that the term “rail expert” does not apply to the Secretary of State. Yet again, he argues that the new investment that came in after privatisation was somehow magically due to privatisation, not a change in Government rules that allowed private companies to borrow. Yet again, he blames Network Rail—a body that he is responsible for—and continues to duck his own culpability in the timetable fiasco. And then, in this statement, he talks about the absence of clear lines of accountability; I think we know who has responsibility.
With regards to terms of reference, we need to look at the value for money of the subsidy in the current system—£2.3 billion in 2016-17—as well as the value of public sector bids, and how foreign state-owned companies can come to the UK and make money to reinvest in their own national railways. We also need to look at the devolution to Scotland, especially as Network Rail is too large as it is; the performance of the Department for Transport, especially with regards to the tendering process and the mismanagement of the east coast main line tender; the performance of direct awards and the cost to the taxpayer; and the HS2 and Crossrail delays.
Will the Secretary of State stand up and rule out the privatisation of Network Rail? He seems to keep saying that the nationalisation of Network Rail is the problem. We do not want a repeat of the Tory Railtrack failure by privatising the state infrastructure. Will he rule out privatisation today?
The hon. Gentleman continues to argue for the devolution of Network Rail, even though it was not recommended in the report on the powers that should be given to the Scottish Government. I will continue to say to that Scottish Government that when they actually run the rest of their responsibilities well, they will have a better case for arguing for additional responsibilities.
The review will look comprehensively at the structure of the industry. It is designed to deliver genuine change. I do not expect the industry to emerge from this review in the same shape that it is in today. It is important that we find a structure that works for the public and passengers, but I do not intend to transfer the ownership of Network Rail to the private sector.
I welcome the statement. At the moment, there is much competition to gain a franchise, but very little competition once the franchise has been granted. Will the review take account of that and introduce more competition into the actual provision of services?
My hon. Friend makes an important point. Competition needs to be a part of the way in which our railway works because it drives better performance for customers. Indeed, the presence of open access operators on the east coast main line has undoubtedly created a better competitive environment for passengers. Whatever structure emerges from the review, there must be a place for open access and competition. There are parts of the network where competition is impossible—it is very difficult to deliver on a single commuter network—but we should always aspire to have a competitive pressure on the industry in a network between major population centres.
Will this review consider whether Transport for Wales is given further powers to hold Network Rail to account for delivering improvements to railway infrastructure there? There must be clearer accountability to improve Wales’s railways.
Of course, I have proceeded with probably the most substantial piece of devolution of infrastructure in Wales since privatisation, by handing over the valley lines to the Welsh Government to turn into the Cardiff metro. There is a strong case for such an approach. I have also indicated to those leading Merseyrail that I am very happy to transfer their infrastructure to them. As part of the review process, we will certainly look at what the right approach to the issue of devolution might be.
Like the Secretary of State, I regularly commute into this place and would like to see an improvement to the rail service that my constituents get, but many of the delays are due to Network Rail, not to Greater Anglia. In my view, the best way to hold the operators to account is to hit them in the pockets and ensure that people get fair compensation when trains are delayed. May I therefore encourage the Secretary of State to continue the work that he is doing to ensure that repayment mechanisms are as effective as possible across the country?
The Secretary of State knows that there will be disappointment with his statement. It is not far-reaching enough and it is insensitive to launch something like this, which has aspirations really to change the rail sector, when he knows that the rail sector is a community of very dedicated people—staff and travellers. We all know that community very well, but he started off by rubbishing one part of it. That is not the way to build the community. Everybody in that sector—I admit that it is a strange sector—knows the confusion that came out of the botched privatisation by the John Major Government, because there are three partners that do not seem to come together. Those three partners will never come together unless we have leadership from the Secretary of State; that is woefully lacking today.
In all the conversations that I have had with people across the rail industry, I have met very few who disagree with my analysis about the need to bring back together the operation of the track and the train. What comes out of this review has to deliver a more joined-up railway.
I welcome the Secretary of State’s approach. In all the times that he has appeared before the Transport Committee, he has always been open to change and improvements. With that in mind, may I ask him to take into account the great future improvements that can be made from technology? The digital railway will add a third extra capacity without the need to build more track, but that will only occur if the unions and the workforce embrace change and do not use it as an opportunity to go on strike, as I have seen in the Southern network. Strikes have been the single biggest issue, not the other factors that hon. Members mention.
The hon. Gentleman talks about safety. This is a false approach. We know that the chief inspector of safety on our railways has said that the approach that is now taken on many parts of the network is safe. On Southern, where we had the initial problems, more staff are operating on trains now than before the dispute. So this is not about taking staff away from helping passengers; it is about making the railways run more efficiently. It is tragic that the Labour party does not seem to want that and all Labour Members can do is chime the same songs as their union paymasters.
As part of the rail review, will the Secretary of State look at cross-border rail services between Wales and England? They are overcrowded and unreliable now. There needs to be far better working with the Welsh Government on this, because demand in my constituency just grows and grows.
I absolutely accept that. The hon. Lady highlights one of the problems across the network. The new trains on the Great Western franchise that are coming as part of the Wales & Borders franchise will help. I am also focused with the CrossCountry franchise on making sure that, as we take this forward in the interim period we do not lose sight of the need to expand capacity. She makes a good point, but what she is experiencing is true across the whole network. It is why we have this big programme of train replacement, with longer trains, new trains and more space right across the network, funded by the train operating companies and the lease companies.
I welcome my right hon. Friend’s statement. Many of my constituents commute from Nuneaton to Birmingham or Leicester. That service has become so popular that there is a massive demand for new capacity. I hear what my right hon. Friend says about the CrossCountry franchise, and I will be grateful if he says today what that means in relation to the improvement in capacity that is so desperately needed for my constituents.
We are now looking at what we do with the CrossCountry franchise over the coming years, but I assure him that one part of that planning is dealing with overcrowding on the routes. There are too many parts of the CrossCountry network where the trains are just too full, and we have to address that, and we will.
I appreciate the Secretary of State’s statement. I welcome a review of the railways, but if the Government are admitting that the railways are not working, they should freeze fares until the review reports and the changes are made. This certainly means cancelling the planned rises in January, particularly as my constituents who travel on Southern Rail and passengers across the country have had such a torrid time. Does the Secretary of State agree?
In those areas where people have had a torrid time we have provided a month’s free travel. We did that on Southern during the worst days of the industrial dispute, because that delivers quicker and much more substantially money into the pocket of people who have suffered. That has been a good approach. It amounts, together with Delay Repay to almost 10% of the annual cost of travel for a season ticket holder, and it gets the money to people quicker.
I warmly welcome the Secretary of State’s review and his statement today. Does he agree that it is critical that the review delivers not just vital improvements on lines such as the Cotswold line in my constituency but the improvements to reliability, stability and accountability that my rail-travelling constituents deserve?
I agree. The problem is that we now have a system that is fragmented but under intense capacity pressures. We need to have a railway that is more joined up, where lines of accountability are clearer and where the response to problems, which will always arise on a busy network, is much more joined up and quicker for passengers.
The Secretary of State will be aware that the Welsh Government have recently awarded the new Wales franchise. He mentioned devolution in his statement. If lessons are to be learned from that far better, more customer and investment focused franchise, will the Williams review draw on them so that best practice can be shared between different franchises? It is important that we learn from devolution rather than simply criticise it all the time.
I do not criticise it all the time; I have done the biggest piece of devolution on the railways for a long time, with the creation of the Welsh Valleys line. I look forward with interest and hope that the new Welsh franchise will deliver something significantly better for passengers. Of course I am in favour of sharing best practice across the whole railway and the whole transport system.
May I ask that, as part of the review, Network Rail is made to keep some of the promises that it has made. My right hon. Friend will know what I am going to say because I bang on about it every time I see him, but the Access for All bridge at Garforth was promised years ago now, and all I have had is excuses and misdirection and no idea where the money given by the former Chancellor, George Osborne, has gone. As part of the review will my right hon. Friend ensure that, when promises are made they are delivered to my constituents because it is frankly an utter embarrassment?
I understand my hon. Friend’s frustration. A number of station projects did not make it in the control period that is about to end. We have funding for accessibility projects in the next control period, and I will certainly want to see those that are needed and have already been promised get prominence in the list of projects that we assemble to use that money.
In his statement, the Secretary of State alluded to the utter chaos that we had seen in the north during the summer. Unfortunately, things have not improved measurably for my constituents. Will he take this opportunity to tell us exactly what dialogue he is having with the managing director of TransPennine Express trains? I understand that he has just received a significant pay increase, which appears as if he is being rewarded for failure.
My officials and I are in conversations with those overseeing the railways in the north all the time. Clearly, there have been improvements. TransPennine Express had issues with the timetabling of Northern, which had a knock-on effect on its services. That situation has improved. There is further to go, but the hon. Lady’s constituents will benefit from the arrival of new trains this autumn. One of the issues on TransPennine Express is capacity. More capacity will be coming on through. I am always happy to talk to her off line because I want to ensure that local problems are dealt with. She knows that she can always collar me in the Division Lobby—we are not always in the same Lobby, of course, but she is always welcome to grab me in the corridor if there are any particular issues.
Diolch yn fawr, Madam Deputy Speaker. The Wales Governance Centre recently published figures that showed my country would have received an extra £5.6 billion since 1999 if the rate of infrastructure investment had kept pace with that of London and the south-east of England. Will the terms of reference for the review include how to ensure a more equitable share of investment so that Welsh taxpayers’ money is no longer siphoned off to invest in infrastructure here in London and the south-east?
I do not think that the Welsh can ever claim that their money is siphoned off to pay for the rest of the country, given the amount of support from taxpayers elsewhere in the UK that goes into Wales, but we will be looking at all aspects of the industry, how we operate different parts of the infrastructure and ensuring that we do the right things for the whole of the UK.
My constituents who use the Wharfedale and Harrogate Northern rail lines are still experiencing missed and late services and are still travelling on Pacer trains. I have met Northern a number of times. They have promised the new trains by December and no more Pacers by March, and that these problems will be alleviated. How will the new terms of reference ensure that those demands are met?
I was in Harrogate recently, talking to passengers at the station, and I know that the new trains have started to arrive on the line from Leeds north through Harrogate. I understand from my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) that he has had a number of letters from constituents praising the new trains and saying that it is a great new departure for the local railway. Of course it takes time for a new fleet of trains to arrive. The Pacer trains will be going, the sooner the better from my point of view, but the good news for people using that line is that they are one of the first in the north to get the new trains.
If this is going to be a truly comprehensive review, will the Secretary of State look again at the ownership of stations, especially those in Greater Manchester, where Transport for Greater Manchester made a strong case for better integrated services if it were able to take over ownership of the stations?
We will look at all aspects of devolution. The issue was that Transport for Greater Manchester wanted us to give the money for it to do the stations up, and then effectively we would pay it back out of rail revenues that would flow back through the franchise to the Government, as part of the subsidy we provide. It was not a compelling deal. Instead, I offered both money and the expertise of London and Continental Railways—the development arm of the Department for Transport—to help it maximise the potential of those stations, and that work is happening at the moment.