Thursday 17 January 2019
[Mr Nigel Evans in the Chair]
Rail Infrastructure Investment
I beg to move,
That this House has considered the Fourth Report of the Transport Committee, Rail infrastructure investment, HC 582, and the Government response, HC 1557.
I am delighted to lead this debate on the Transport Committee’s Fourth Report of this Session, on rail infrastructure investment. I will start the debate as we started our report, by underlining the importance of the UK’s railways. They are a vital part of our national transport network and make a substantial contribution to the economy. Their importance has been recognised by successive Governments of all parties, with billions of pounds invested in rail every year. The importance of our railways is not in question.
However, there are serious challenges for both rail passengers and the industry. While 1.7 billion journeys were made by rail in 2018, it was not an easy year for passengers, who faced disruption and disappointment. Planned improvements—including electrification in south Wales, the midlands and Cumbria, and the opening of Crossrail—have not been delivered, while May’s timetable changes caused unprecedented chaos across the network. This year started with more unwelcome news for rail commuters, with fares increasing by an average of 3.1%.
We must work towards improving services for rail passengers and freight customers. Investment in the network is essential for enabling better services, which in turn provide new opportunities for our constituents and support the development of our towns and cities. That was the focus of our report, and today I will look at three of the main issues it raised.
First, we need to ensure that rail investment and its benefits are shared equally across the country. It is clear that many feel that rail investment is unfairly centralised in a small number of areas, and the Department for Transport has done little to respond to those concerns. Secondly, there are serious questions about what future improvements the Government’s new approach to funding rail enhancements will deliver. To date, more than a year after the new system was put in place, there is a total absence of information about what proposals are even being considered. Thirdly, there remain questions about the future role that electrification will play in improving the UK’s rail network, following the cancellation of the electrification of the midland main line north of Kettering to Nottingham and Sheffield, the Great Western main line to Swansea and Cardiff and the lakes line between Oxenholme and Windermere.
There is long-standing dissatisfaction about the level of investment in the rail network in different regions, and our report looked in detail at the disparity in investment across the country. We considered the issue in the context of the Government’s stated intention to rebalance the economy away from London, exemplified by the northern powerhouse and the midlands engine. From 2012 to 2017, the north-east, the east midlands, the south-west and Wales all received less than 10% of the level of rail investment that went to London. Only the north-west, the south-east and Scotland received even a fifth of the level of rail investment in our capital.
The capital’s size and population mean that it is unsurprising that more is spent in London, in absolute terms, than in other regions. However, there is also a substantial disparity between spending per capita in London, at £773 a head in 2016-17, and other regions, with a low of just £70 per head in my own region, the east midlands. The Institute for Public Policy Research North analysed the Government’s planned transport spending, as set out in the Government’s 2016 “National Infrastructure and Construction Pipeline”, stating that it showed problems not only in the past but in the future and
“a stark gap between London and the rest of the country”,
with £1,900 per capita spending planned in London from 2017 onwards, compared with £400 in the north.
The sense of unfairness felt by many regions across the country has been exacerbated by continued investment in major developments that primarily benefit London. It is hardly surprising that there was real anger when, four days after the cancellation of those electrification schemes, the Secretary of State and the Mayor of London jointly announced an agreement in principle to fund Crossrail 2 at an estimated cost of £30 billion.
The Government have tried to rebut the figures about the regional disparity of investment in our railway. Their response to our report said that
“the planned spending per head figure is within 33% of the national average for all nine English regions. Moreover, the overall figure for the three Northern regions (North West, North East, Yorkshire and Humber) is £1,039 per head, compared to £1,076 per head for the Middle regions (East of England, East Midlands and West Midlands) and £1,029 per head for the Southern regions (London, South East and South West).”
However, those figures are based on a selective analysis. By aggregating regions, variations in the midlands, the north and the south are masked. For example, Yorkshire and the Humber received just £729 per head, the north-east £822 per head and the south-west £851 per head.
As usual, my hon. Friend makes a powerful case for the report that her Committee has produced. She just referenced the funding for Yorkshire and the Humber. The Department for Transport seems to put its head in the sand whenever it is challenged on these regional disparities. Given that the new Rail Minister is a Yorkshire MP, does she think that we might now see a recognition that the north has not had its fair share, and that we will now start to get our fair share?
My hon. Friend has been an outstanding advocate for the north and its need for rail investment. The Minister is a newish Rail Minister, but I know that he previously served in the Department for Transport. We had discussions in the past, when he was the Minister responsible for buses, and I always found him genuinely prepared to listen. I hope that he brings the same approach to his new role.
In January 2018 IPPR North assessed the Government’s analysis of regional spending and stated that it excluded spending in the pipeline for after 2020-21, meaning that the analysis omitted some £42.5 billion of planned investment, 40% of which—£19.8 billion—is earmarked for London. The Government have therefore presented, even if accurate, a rather skewed picture of how planned transport spending will be distributed across the country in the coming years.
My hon. Friend is doing an excellent job of presenting our Committee’s report and explaining how the Government tried to fiddle the figures to obscure the fact that London is getting about 80% of the funding. Does she agree that this will not be rectified and made fair until the methodology for deciding on investment schemes is changed? It massively over-weights time saved, which always pushes investment towards densely populated cities such as London, rather than Newcastle, Manchester, Leeds or the other regional cities.
My hon. Friend makes an important point, which I will come to in due course. He is a long-standing, experienced and expert member of the Transport Committee, and I am delighted that he is here this afternoon.
The DFT also argues that it is difficult to break down regional spending accurately, saying that where expenditure on the railway takes place is not always an accurate reflection of where the benefits are felt. The Department also emphasises the difficulty of analysing investment annually, or even five-yearly, given that railway assets typically have a lifespan of 25 to 40 years, pointing out that there was inevitably
“a cyclical nature to replacing them that does not lend itself to an even split of funding across all regions within every 5 year control period.”
Of course, there is merit in those arguments, but I simply ask the Minister, when was there a time when investment in the north exceeded investment in the south?
While the Government’s commitment to rebalancing the economy is welcome, it is clear from past experience that, as my hon. Friend the Member for Blackley and Broughton (Graham Stringer) said, current methods for making investment decisions make it much easier for highly populated, economically successful places to prove the case for schemes in their area, because the model has a bias towards schemes that exhibit strong levels of potential demand and/or high potential to relieve existing transport congestion. Witnesses to the inquiry told us that this approach inevitably drew more investment to London and unless the system could be altered to take greater account of wider economic benefits, the process would be inexorable.
Maria Machancoses, the director of Midlands Connect, told us that
“figures on the disparity of investment, no matter which formula you look at—whether by the DFT or the Treasury—they all say that outside London it is just not working.”
Her view was that this should be the starting point from which to “move forward.” However, in their response to our report, the Government did not accept the suggestion that their scheme appraisal methods did not provide a fair share of investment in rail across the UK’s regions. This completely fails to acknowledge the overwhelming feeling across the country that investment in rail is unfairly concentrated in a few small areas.
While there are undeniable complexities in accurately breaking down regional spending and identifying where the benefits of investment are felt, the Government must recognise the concerns that have been raised about the regional disparities of investment in our rail network and take action to address them. It is hard to believe that the Department will do so if it does not accept that there is a problem in the first place.
The DFT has published a rebalancing toolkit, to be used as part of the strategic assessment of future investment programmes. This was welcomed in principle by our witnesses. However, when we asked the then Rail Minister, the hon. Member for Blackpool North and Cleveleys (Paul Maynard), for examples of the toolkit’s influence on DFT’s transport investment decisions, he could not provide a single specific example. He told us that it was “relatively early days” for the approach. Our witnesses said that the Government needed to prove that what the rebalancing toolkit is meant to achieve will actually take place. I ask the Minister, over a year after the toolkit was introduced, how has it influenced the DFT’s investment decisions?
In our report, we also called on the Government to be more specific about the economic rebalancing effects they intend to achieve. We call on them to tell the regions in need of regeneration how they can prove their cases and secure investment. We argued that people in the north-east and south-west, regions that have experienced relative under-investment in recent periods, must have a clear sense of what the Government are trying to achieve in order to be able to judge their success.
We also recommended that use of the rebalancing toolkit be mandatory and that the Department worked with Her Majesty’s Treasury to explore how economic rebalancing can be made an intrinsic part of appraising transport schemes. That would put rebalancing at the heart of investment decisions, rather than it merely being an add-on. In response, the Government have told us that it would be impractical to make use of the toolkit mandatory. Why has the Department developed a toolkit that is impractical to use?
Let me turn to rail electrification. Under successive Governments since 2009, the Department has made a compelling case for widespread electrification, moving from diesel to electric traction, particularly on heavily used parts of the network, which would reduce journey times and facilitate lighter, more efficient trains, reducing long-term costs, improving environmental sustainability and enhancing capacity. The Government’s decision to cancel electrification schemes in south Wales, the midlands and the Lake district were a huge disappointment for people who had been promised improvements to their network. Following the cancellation of these schemes, there are also serious questions about the Government’s support for future electrification of the network.
It is clear that the plans for electrification were over-ambitious and suffered from inadequate planning and budgeting. The schemes were hampered by an unclear definition of responsibilities between the DFT, Network Rail and the Office of Rail and Road, and disappointment at their cancellation was compounded by poor communication by the Department for Transport.
Although the decision to cancel the midland main line and the lakes line schemes was taken in March 2017, it was not announced until July, on the day the House rose for its summer recess, limiting opportunities for scrutiny of the decision. The Government also presented the decision not to electrify these lines as a positive story about passenger benefits being delivered in other ways. The announcement, unsurprisingly, was met with scepticism by those who saw it as a pragmatic, cost-based response to overruns. The National Audit Office agreed with those sceptics, and concluded:
“The Department decided to cancel projects in 2017 because Network Rail’s 2014-2019 investment portfolio was no longer affordable.”
Passengers on the midland main line and Great Western main line should eventually see some improvements in capacity and journey time from other enhancements in control period 5, but the way that enhancement to these lines has been handled is far from ideal and has done nothing to create confidence in the Government’s approach to rail improvements.
I congratulate the hon. Lady, my friend, the Chair of the Select Committee, on securing the debate. She took us through our Select Committee report and chaired us so well. The Government rightly place great faith in the future in hybrid trains and bi-mode, but does she share my concern that we are in a bit of a hiatus? We either have electrification or technology that is not quite there. Many communities—mine in particular, with the extension of HS1—are faced with uncertainty as to whether they will ever get a better service.
The hon. Gentleman is a very valued member of the Select Committee. While new traction, hydrogen and battery potentially have a place on our railway, it is clear that they are not sufficiently developed to be a proper replacement for electrification. There is some doubt about whether they will ever be a suitable replacement for electric trains, particularly on inter-city journeys operating at higher speeds. He is right to raise concerns about the time that might be taken for parts of the country to see improvements to their services, particularly if there is a continued aspiration to use bi-mode technology. While that can provide some benefits, it undoubtedly also has a significant impact on operating costs. When passengers are very concerned about their fares raising, building in long-term costs seems a wise approach.
While it is now clear that the electrification schemes that had been planned were undeliverable, the Railway Industry Association and others were convinced that, for now, electrification remained the optimal solution to train traction. The case for electrification is particularly strong on heavily used routes, balancing significant benefits to passengers with the wider environmental benefits and long-term cost efficiency. Our report called for electrification to be delivered through a long-term rolling programme in which the Department, Network Rail and the wider industry learn the lessons of earlier schemes and strive to reduce costs. Do not throw the baby out with the bath water.
A key driver of Government investment in the rail network is their commitment to reduce carbon emissions. In February 2018, the Government called on the industry to produce a vision for how it will decarbonise with an initial response due in September last year. The Government response to our report confirmed that an industry taskforce, led by Malcolm Brown, is taking this forward. Have the Government received this taskforce’s report on how to decarbonise the rail system? If so, what does it say and what are the Government doing with it? David Clarke, technical director of the Railway Industry Association, has said that to achieve the Government’s aim of decarbonising UK railways by 2040,
“electrification must be one of the prime options for intensively used routes”.
The Government accepted our recommendation that it should engage with RIA’s electrification cost challenge initiative. The Department committed to producing a report on cost-effective electrification by this summer, but has said that it will remain agnostic about the best means of securing rail enhancement and that it does not expect proposals for new enhancement to begin with a predefined solution such as electrification. I am afraid it is clear that the Government have no plans for the future electrification of the railways.
I ask the Minister to update us on the Government’s work to produce a report with the industry on cost-effective electrification. When we conducted our inquiry, we heard that there was considerable interest in third-party-funded electrification schemes on the midland main line. We recommended that those proposals should be fully considered as an alternative to the proposed bi-mode solution.
The Government accepted our recommendation and said that they would fully consider
“Any proposals made to government or Network Rail about private sector solutions on the Midland Mainline that could provide benefits in addition to the passenger benefits that are being secured by the Government.”
What discussions have the Government had with third parties about proposals for electrifying the midland main line, and how will the improvements for passengers of the enhancements that will be going ahead compare with the improvements that would be delivered by electrification?
Some hon. Members present represent areas of the north covered by the transpennine route. The upgrade of that route is expected to include some electrification, but those enhancements have been considerably reduced since the then Chancellor announced in 2016 that the Government were
“giving the green light to High Speed 3 between Manchester and Leeds”.—[Official Report, 16 March 2016; Vol. 607, c. 961.]
There are serious concerns that the upgrade will not be fit for purpose for freight trains, and that because only part of the line will be electrified, the route will need bi-mode trains, which will build in higher operating costs for years to come. Are the current proposals for the transpennine route upgrade in line with the advice from Transport for the North? If not, why not? I note the letter to the Secretary of State for Transport from the operator of Humber, Mersey and Tees ports on 7 January, which says:
“It is of increasing concern that the Department for Transport and Network Rail are undervaluing our industry in the North and undermining the economic goal and objectives of the Northern Powerhouse; it will only make the productivity gap between the North and South of England even greater and devalues further the role of Transport for the North.”
It is concerning when the industry feels that the transpennine route upgrade, as it is currently considered, will lead
“to an utter dependence upon the M62 for Transpennine freight traffic for at least another generation.”
We have talked about some of the problems experienced as a result of planned railway improvements in the past five years, which have triggered successive reviews of the planning and delivery of enhancements and led to a substantial change in the way future investment in the railways will be considered and delivered. The next five-year control period will focus on operations, maintenance and renewals, the volume of which will increase substantially, not least because of the number of renewals that have been postponed from the current control period.
Following those postponements, the greater focus on maintenance and renewals in control period 6, which starts in April, is necessary and welcome, but there are long-standing concerns in the industry that investment in renewals has been lumpy, stop-start and boom and bust. We have heard that the level of uncertainty about upcoming spending could have knock-on effects on the wider industry’s confidence to invest in its workforce, skills and innovation.
In our report, we called on the Government to work with Network Rail, the regulator and the industry to look at the ways in which investment could be smoothed out from the start of control period 6, throughout that period and beyond. The Government accepted that recommendation, so I ask the Minister, how has the Department worked with the industry to smooth out investment for the upcoming control period?
Instead of forming part of the five-year control periods for Network Rail investment, future enhancements of the rail network are now subject to a separate process. The new rail network enhancements pipeline is intended to support a continuous planning approach and move away from the overly rigid five-year cycle that was linked to railway control periods.
The Government have signalled that they expect more railway enhancements to be market-led proposals brought forward by third parties. We heard that there was likely to be interest from third parties in bringing forward such proposals, but it was not clear to us that Network Rail had the structures or culture in place to support such third parties to engage and participate in the planning, delivery, funding or financing of the railway.
I echo the earlier comments of my colleague on the Transport Committee, the hon. Member for Bexhill and Battle (Huw Merriman), about my hon. Friend’s skill in presenting her arguments and chairing the Committee. Does she share my concerns about the market-led proposals? In my part of the world, we have had some major proposals for east west rail, which has been promoted by the National Infrastructure Commission, but there is considerable confusion about whether that railway will be privately run, as the Secretary of State has suggested, or whether there is a plan B. I am not convinced that there is and I am interested in my hon. Friend’s views on that.
It is wonderful to see so many members of the Select Committee here. My hon. Friend raises an important point about what will happen if market-led proposals do not provide the opportunities that the Department hopes. I will touch on that in a moment.
In November, the Government said that they had received 30 responses to their call for ideas for market-led proposals to enhance the railway, but that they could not make an announcement about individual schemes because the proposals had been submitted in confidence. How have those market-led proposals progressed since November, and do the Government expect any of them to be delivered, including the one referred to by my hon. Friend the Member for Cambridge (Daniel Zeichner)?
There was significant support for moving enhancements planning away from the control period process, and we support the intention behind the rail network enhancements pipeline, which should ensure that the planning mistakes made over the past five years are not repeated. However, we also found a substantial risk that the rush to deliver poorly planned and scoped schemes in the current period could be replaced by a different problem—a slowdown or interregnum in new enhancement projects.
That is why we called on the Government to provide a clear set of strategic priorities for rail infrastructure investment in each region, and to outline the specific projects likely to be available for third-party investment. The Government refused to set priorities for each region, so I ask the Minister today to set out the Government’s priorities for rail enhancements over the next five years.
We were also concerned that the process outlined by the Government did not provide the reassurance and certainty on future investment that the rail industry is looking for. We said that more transparency about the enhancements pipeline and decision-making processes in the Department was needed. That is particularly true if the potential for a substantial increase in third-party investment is to be realised. The Government accepted that recommendation and said that they are
“committed to transparent policy making and intend to make clear public statements”
as investment decisions are taken at each stage of the pipeline. So far, however, we have seen no such statements.
The Railway Industry Association has said:
“The visibility of enhancements remains a major concern for rail suppliers. There is now a lack of an obvious enhancements pipeline, with no construction-ready schemes in the Rail Network Enhancements Pipeline…published in 2018.”
Last week, I asked the Department how many rail enhancement schemes were being considered as part of the rail network enhancements pipeline, and what stage each proposal was at. Again, the Minister told me that the Government
“are committed to transparent policy making”,
but failed to answer any points of my question. That means that, almost a year after it was set up, the Department has yet to reveal a single proposal being considered as part of the pipeline. We are none the wiser about what, if any, future enhancements the Department is considering, let alone planning.
In response to my question, the Minister also said:
“Network Rail…will continue to provide public updates on the progress of enhancements in the portfolio”,
but it is not clear at what stage of the pipeline proposals will enter the portfolio. Can the Minister confirm at what stage enhancements will be included in Network Rail’s enhancements delivery plan? It seems to me that it is only those that have reached the delivery section of the pipeline that will be exposed in that way, and we will not know what is in the development and design parts. Will there be any transparency of proposals before the decision to deliver them?
Although the Government have accepted a number of our recommendations, as I have outlined, their response to our report was disappointing in several regards. It seemed to show an unwillingness to engage with some of our key conclusions and recommendations.
The Association for Consultancy and Engineering agreed with our assessment of the Government’s response, telling us that the Government had
“failed to meaningfully engage with the expertise provided by industry, and the practical recommendations outlined in the report”.
It told us:
“As evidence givers, it was disheartening for ACE to see the DfT and the ORR”—
that is, the Office of Rail and Road—
“pay such little attention to the solutions proposed by the committee, including dismissing some of them outright.”
I have asked the Minister to respond today on some of the points where we felt that the Government’s response to our report was less than satisfactory. I hope that he will take the opportunity to expand on the Government’s response, for the benefit of both this House and those in the rail industry who were as frustrated as we were by the Government’s response.
To conclude, although our report welcomed much about the Government’s—
My hon. Friend is being very generous in giving way as she draws to her conclusion. She has already mentioned the fact that it took four months from the decision to cancel the electrification to a written statement to the House on the last day before the summer recess. The previous Secretary of State, the right hon. Member for Derbyshire Dales (Sir Patrick McLoughlin), assured the Committee that there would be no change in the investment plans when the Office for National Statistics had changed the designation of Network Rail’s public status so that it became part of the public expenditure. However, that has driven many of the cuts in the future investment programme.
Does my hon. Friend agree that the Government have not only failed to respond positively to our recommendations but failed to play a straight bat, in not presenting information to the Committee that would have enabled us to carry through properly our job of scrutinising the Department?
My hon. Friend makes a very important point. I do not know whether the previous Secretary of State was really unaware of the implications of that change, but certainly our experience as a Committee is that we have not always had the candour that we would have wanted from the Department. That is disappointing when we are simply trying to do the job of scrutiny that this Committee was appointed to undertake on behalf of Parliament.
As I have said, we welcome much about the Government’s approach to investment in the rail network. There is no argument about the importance of investment or about the fact that the Government are investing significant sums, but the issue is how they have gone about investing and how they ensure that that investment provides good value for money and strategic thought about the long term.
We agree with the increased focus on renewals and we agree that decisions about railway enhancements should be taken out of the five-yearly control period process. However, there are still outstanding questions that were not addressed in the Government’s response to our report. How will the Government meet their commitment to rebalancing the economy when it comes to investment in rail? How do they plan to decarbonise the railway network if they have completely ruled out electrification? What future enhancements to the railway network will emerge from the new rail network enhancements pipeline? I look forward to the Minister’s update on all those points.
It is a pleasure to serve under your chairmanship this afternoon, Mr Evans. Out of courtesy, I must apologise to hon. Members in advance just in case—I emphasise “in case”—I need to leave before the conclusion of the debate, due to another commitment. I pay tribute to the Chair of the Transport Committee, the hon. Member for Nottingham South (Lilian Greenwood), for the case that she has just put, and to all other members of the Committee for their work on “Rail infrastructure investment”. I have a copy of the report and have looked at it, and it is fair to say that it covers a wide range of issues, which the hon. Lady spoke about in her very good and detailed speech.
As the Minister will know, rail infrastructure is incredibly important, not only to my constituents in Witham but to the entire east of England region. I will start by paying tribute to him, because he has recently become the Rail Minister. I had the privilege of working with him previously, in his other incarnation in the Department for Transport, so it is great to see him back there. I thank him and his officials for giving me some time recently, to discuss not only some of the issues that I will raise today, but some of my concerns, as well as the developments that are taking place on the Great Eastern main line and some of the big investment opportunities that we would like to see for the region.
The Minister will know from our recent discussions about the work of the Great Eastern main line taskforce, which I currently chair and which is putting forward the case for strategic investment in rail infrastructure. Back in 2014 we submitted to the Government a business case for a package of investments—I have it here: “exhibit A”—which I have no doubt the Minister is fully versed in, because I know he has seen copies of it. This business case from 2014 discussed the potential to deliver over £4 billion of gross value added to the economy, to support thousands of new jobs, and to help meet the transport needs of the population and housing growth in the region.
Of course, this business case was put together in 2014 by all the Members of Parliament from Essex, Suffolk and Norfolk. It received a great deal of Government interest and time, with interest shown by the former Chancellor, the former Prime Minister and various Ministers, including the former Secretary of State for Transport, my right hon. Friend the Member for Derbyshire Dales (Sir Patrick McLoughlin).
As we have seen in the east of England, and are still seeing, there is so much opportunity for economic growth in our area, with lower housing costs than in other areas. We are on a commuter line and we are accommodating a greater number of commuters and families who travel to London, and not only in Essex but across the eastern region. We are very proud of that. Families choose to enjoy the enormous benefits of living in the villages of my constituency and elsewhere in the region, while being able to work in London as well. I have to say that that is because of the Government’s wider investment in other sectors, including education—we have some amazing schools now—and quality of life is obviously a key feature too.
Of course, Essex and the east of England are fast-growing parts of the country, and they are strategically placed to deliver new jobs and economic growth. Look at what we have going on. We have world-leading businesses and centres of innovation: the Essex knowledge gateway, the University of East Anglia, Essex University and Cambridge University. They are all great hubs of intellect, innovation, jobs, economic growth and entrepreneurship. We have a diverse range of businesses, such as financial services, logistics, manufacturing, construction, modern bio-tech and science. We also have key international transport hubs, as my hon. Friend the Minister is well aware, including the key ports in London Gateway, Tilbury, Harwich and Felixstowe, and our airports at Stansted and Southend.
In Essex we have great business voices, which were instrumental in making the case for investment in our rail back in 2014. They include the Essex chamber of commerce, which made the business case, outlined the GVA of rail investment, combined the numbers and showed the economic growth that we can deliver outside London, and the new opportunities that will come our way. The Essex economy is already touching £40 billion in GVA, and obviously since 2010 the number of entrepreneurs has risen and we see business growth getting stronger and stronger. I see how much our businesses are already doing, and the jobs and prosperity they create. I am incredibly proud to see the enterprising spirit they have shown. Like me, they look forward to a future in which we can continue to build upon their contributions. They have a positive outlook for the future, not only for Essex but for the whole region.
We know that one of the key factors for growth is strategic investment in our roads and, in particular, our rail, so that we continue to grow and secure long-term investment. Of course, such investment means work on key roads and economic corridors, such as the A12 widening scheme and the dualling of the A120, but it also means investing in our rail network. Our rail network across the east of England has suffered from severe under-investment for many years. The Chair of the Transport Committee made some very important points today. She spoke about regional disparity with regard to the north of England, but of course my taskforce in the east of England has demonstrated that even notional calculations of regional finance mask regional disparities. Commuters on the Great Eastern main line, and particularly Greater Anglia commuters, are net contributors to the Treasury through their rail fares. Of course we want to see some of that money coming back out.
The Select Committee’s report quite rightly raised the whole issue of rebalancing rail investment to ensure that it is spread across the country, which I have consistently pushed for. I agree that we need to invest more widely and look at ways to support schemes in the regions and economic centres. Of course, our whole economy needs to become much more efficient, and investing in rail infrastructure across the country will help to deliver that.
However, I emphasise to the Minister that although it seems on paper that investment has been skewed towards London, partly because of the high cost of Crossrail, it is also important that we see a rebalancing exercise that does not come at the expense of excluding investment opportunities that would deliver high levels of value for money and help to drive billions of pounds back into the whole of the UK economy. Of course, we are set to benefit from approximately £2.2 billion of investment through the control period 6 process, but I stress that that investment is to cover maintenance, operations and renewal.
Paragraph 80 of the excellent report, on page 28, focuses on the historic lumpiness of renewals investment. Investment that covers maintenance, renewals, and so on goes to patch things up, and the graph on page 28 shows that the lumpiness of expenditure goes across the various control periods. We want to ensure a consistent level of investment that covers maintenance, so that we are not simply patching things up. It is a welcome commitment. From our perspective, the new refurbishment —new trains, funds for renewal, and repairs to bridges, embankments and signalling to deal with level crossings—will of course be beneficial. However, that is no substitute for a clear strategy of strategic investments in new infrastructure so that we can have a high-performing railway to support our region. That is the right thing, and it is what our commuters all want.
The right hon. Lady is making an excellent contribution on behalf of the east of England. I wonder whether she agrees that there are significant possibilities for bringing forward digitalisation of the railways. I am told that a huge amount could be done through digitalisation to better address capacity constraints, and that a relatively modest investment in global terms could be transformational in the east. My concern is that, looking ahead over these very long periods, we may well find that technology has moved much more quickly and we have not taken best advantage of those technological changes. Does the right hon. Lady share that concern?
The hon. Gentleman is absolutely right. I was planning to touch on the significance of digital railway. I mentioned efficiency, and the whole point is how we can use new technology to drive efficiency. Everything is part of a process, and new technology can trump things that have previously gone on. There are also new opportunities for digital signalling. For example, on the Great Eastern main line we are working with the Department for Transport and the Minister to continue to make the case for digital signalling, and part of the case that the GEML taskforce is putting forward is compelling. I know that the Minister is looking forward to receiving the business case that we are currently working on. In previous discussions and meetings he has heard me speak about the pipeline business case that we are working on, and how we will build on the 2014 business case and enhance the numbers, the financials and the key programmes that we should be putting in place. We will revise that business case based on the latest figures for growth, the economy and business, and we will demonstrate that investing in rail in the east of England will help the Government to reach their ambitious targets, not just for housing but for economic growth and regeneration.
Those projects are going to be vast. They will include the introduction of a passing loop in the vicinity of Witham town, right through the heart of the Witham constituency; the redoubling of Haughley junction; improvements to the Trowse swing bridge; re-signalling south of Chelmsford; and improvements to Liverpool Street station. Combined, those investments will increase capacity on the network and—importantly for rail users in my constituency—reduce delays. Through the new franchise to 2025, we will benefit from a new fleet of rolling stock, and the first of those trains are due to enter service very soon. We want to make sure that when they come in we do not have disruption and can get the benefits of efficiencies. Over £1 billion of new investment has been secured following the recommendations of the GEML taskforce, which were actioned by the Government. Of course, we want that infrastructure to complement new trains and maximise the benefits, as well as include those key infrastructure projects.
As the hon. Member for Cambridge (Daniel Zeichner) has said, service improvements on the Great Eastern main line can be delivered through digital railway technology, along with the long-awaited development of Beaulieu Park railway station—Chelmsford parkway, as some call it—with three or four tracks and platforms to facilitate future growth in service opportunities. MPs, councils, businesses and commuters across the region are united behind that vision for rail service across the east of England, and I hope that the Minister and the Department will continue to work with us and back us, working with friends in the Treasury, the Department for Business, Energy and Industrial Strategy and the Ministry of Housing, Communities and Local Government to get that vision fully funded. It is about having an integrated approach across Government to delivering improvement in our rail service and our network, which matters when it comes to wider Government funding.
The Transport Committee’s report comments on the investment process and the enhancement pipeline, which was announced last year and which the hon. Member for Nottingham South spoke about. When the Minister replies, I hope that he will talk about how those schemes can go through that pipeline so that we can be efficient in getting the right kinds of decisions.
I will touch on a few other points very quickly. One—this will also interest the hon. Member for Cambridge—is investing in rail more widely in the region that covers Stansted. Stansted is the third busiest airport by passenger numbers in the country, and the second largest by freight. It has capacity for more flights, and given the capacity issues at Heathrow, we should be encouraging more travel to other airports. Of course, connectivity through the rail link from Stansted to London and further is a major barrier to growth, and our former colleague, the right hon. Sir Alan Haselhurst—now Lord Haselhurst, following his ascension to the other place—is working on proposals to improve connectivity through the West Anglia Taskforce. I commend his work on the issue. We often talk about Crossrail 2 presenting an opportunity for connectivity in that part of the eastern region, and I would like the Minister to provide any updates he can in his concluding remarks.
I thank the Chair of the Transport Committee for the opportunity to speak today off the back of the Committee’s excellent report. I also praise the Minister for his attention to rail, obviously from an east of England point of view. I ask him to bring together all the levers of Government—not just those in his Department—to catalyse funding across other Government Departments in order to unlock economic growth and opportunity across the regions of our country, so that we can use our rail much more strategically. Rail investments have been a catalyst for economic growth.
It is a pleasure to serve under your chairmanship, Mr Evans. I am a new member of the Select Committee on Transport, and did not serve on that Committee while this inquiry was under way; nevertheless, it raises a number of points that I want to speak about. I am also pleased to have been able to join the Transport Committee, particularly under the chairmanship of my hon. Friend the Member for Nottingham South (Lilian Greenwood). I have found her to be supportive, enthusiastic and knowledgeable, and she has made me feel welcome in that Committee in the few weeks that I have been a member, as have the Committee’s other members.
Many people in this country are dependent on rail services, and when there are problems, our constituents really tell us about them. Rail travel is essential for those who are unable to drive or do not own a car for whatever reason, and for people such as me who are dependent on rail for their commute to work and for whom there is no alternative, especially when car commuting would take much longer or be too costly. Since the advent of mobile technology, the train journey means more productive working time for those required to travel long distances, or even for me on my half-hour rail commute, than driving does. One can also use the journey as an opportunity to catch up on sleep—another option that is not available when one is driving. Then, there are tourists: UK and overseas residents letting the train take the strain. For all those people and many more, good train services really matter.
It is not just about the quality of services; it is about price. The real cost of rail travel continues to rise year on year. The real cost of driving has flatlined or even fallen, but UK commuters are paying about 17% of their average wage for their season ticket—by far the highest in Europe—and the cost of rail travel continues to rise.
Rail services that are reliable, convenient, fast over long distances, affordable, comfortable and safe benefit not only passengers but the places they link up, providing more business investment, more residents—particularly in areas of declining population—and, in many places, more tourist spend.
More people travelling by rail reduces the number of cars on the roads. That then reduces congestion and associated air pollution. Walking or cycling to a station improves a person’s health, and they may be more likely to spend money during that short journey than if they were driving their own private car. Rail improvement, and investment in rail, benefits people and places.
As a London MP, I concur with colleagues’ anger at the disparity between transport infrastructure investment in London and in the other regions of the country. Why does that disparity exist? I accept that the way that the calculations are done exacerbates the inequality, but frankly that is a tool of a lack of policy. The disparity is a reaction to what always happens in mature economies when there is no effective regional economic policy: the inevitable growth of population and jobs in the largest city.
The main justification for investment in Crossrail, and the longer trains and platform extensions in other rail services in and around London, is that it is a reaction to population growth in and around London. Any economist will say that unless a country has an effective, long-term regional policy, there will be an increasing suck of investment and people towards the capital.
Against that, in some outlying areas in further regions—particularly, as a colleague said yesterday in Prime Minister’s questions, in the north-east—there are some ex-colliery towns where houses are lying empty. An effective regional policy would address that imbalance, which disadvantages both types of area.
The lack of regional policy, and continuous sucking into London of people and investment without any rebalancing, means that in the capital housing is overcrowded and prices are exorbitant—way beyond our children’s ability to rent, let alone buy their own homes. Of course, there is also overcrowding in our transport system.
I am grateful to my hon. Friend, as a London-based MP, for her support for a sane, sensible and fair regional policy. Does she agree that not only is the unfairness a factor, but that repeated investment in London to solve transport problems is counterproductive? Investment in transport has an economic effect: it creates more jobs, more people and more pressure on housing. Investing in that way is therefore effectively investing in future congestion.
I absolutely agree. That is the other side of the coin, and it can be addressed only by a proper, serious regional policy. Since 2010, the Government have moved far away from the regional policies that we had, completely decimating the regional economic development boards, and so forth.
The only nod to a regional policy that we have had in recent years is the northern powerhouse. I have heard again and again what a token gesture the northern powerhouse has been. Even the original promises have gradually been whittled away. We have nothing more than tokenism on regional policy in this country at the moment. As the Transport Committee Chair said in the report, regional transport authorities say that
“systems of scheme appraisal currently work against regions”.
In a sense, the state is exacerbating the natural pressure that always occurs without any sort of state intervention.
Market-led proposals are inadequate to deliver new projects—we see that failure around Heathrow airport. The roads around Heathrow airport, and I do not just mean in west London, but across the Thames valley, Buckinghamshire, from Surrey almost to Hertfordshire, and in the whole sub-region surrounding Heathrow airport, have some of the worst traffic in the world. The roads are dangerously overcrowded, with levels of pollution that are illegal, because we increasingly recognise air pollution as a serious health hazard. It is an economic brake on not only businesses that service Heathrow airport but the wider west London and Thames valley region. Unnecessary congestion helps no one.
In 2001, the planning inspector for the Heathrow terminal 5 inquiry said that additional rail capacity was needed. Subsequently, in the run-up to the investigation into whether there was a justification for runway 3 at Heathrow, the national policy statement said that expansion would require 50% of passengers to use public transport by 2030, rising to 55% by 2040, and 25% fewer staff car trips to work by 2030, rising to 50% fewer by 2040.
The airport policy statement said that the Government expected Heathrow to meet its public pledge to have “no greater” airport-related road traffic. Of course, since then Heathrow airport has said that it wants to double its amount of cargo traffic, yet it has not provided any explanation. If that is not additional pressure on already dangerously overcrowded motorways down to local roads I do not know what is.
Heathrow airport has made it clear that it will not fund additional rail infrastructure, except for possibly a platform or something. Network Rail says:
“Existing connectivity to Heathrow Airport from the south is currently poor, with most people choosing to drive or get a taxi.”
When we were dealing with the implications of a fifth terminal when I was on Hounslow Council we looked, with a range of economic organisations around Heathrow and local authorities, at a scheme to bring in rail from the south and south-west called Airtrack. Meanwhile, colleagues to the west of Heathrow, particularly in Reading, Slough and so on, were looking at a new western rail extension, with the support of the Department for Transport.
Certainly the link from the west was going well, and was a stage ahead of the southern rail access, but last year or the year before everything ground to a halt as the Department for Transport announced that it wanted to let the private sector lead. As the Transport Committee has said, that has just not delivered. We have had a six-month or a year’s hiatus on the rail infrastructure that is needed in and around Heathrow, yet nothing is happening because the private sector—quite understandably—expects the Government to direct those new roads.
Now, the Government are not going to pay for it, and Heathrow is not going to pay for it. Who is, apart from the businesses and people who depend on a smooth-running road system—and the passengers, of course, who will miss their planes because they are stuck in traffic jams? Before the Minister says, “Oh, stop worrying—we are getting Crossrail and HS2 and so on,” let me remind him that Crossrail and the improvements on the Piccadilly line are to deal with existing transport pressures and the existing population increase in west London and the Thames valley. In terms of runway 3, the modal shift of Heathrow passengers on to existing and imminent transport methods will actually be very small. The Minister will know that if he has looked at the documents that were considered by the Transport Committee in its inquiry on the airports national policy statement. We are in a complete mess with rail investment in and around Heathrow, notwithstanding the fact that expansion at Heathrow —as, again, the Department for Transport’s own reports say—actually damages other regions’ connectivity with international destinations and their businesses and customers.
I want to move on briefly to my concern about the Department for Transport’s interference in transport in London. As anybody knows, and as most other major competitive cities do, a very large conurbation needs to be able to link up public transport, walking and cycling under a single management. I think the Government recognise that. Several Mayors, including the Mayor of the Greater Manchester region and others, have said that there should be greater devolution and control over rail policy, and so has every Mayor of London. But in London, and London alone, the Transport Secretary has openly said that he would block devolution of rail policy purely because he did not want a Labour Mayor to have control over it. He implied that if there were another Conservative Mayor after the first Conservative Mayor of London, he might have considered handing over rail responsibilities, but he was not prepared to do so. That blocking of devolution was so shocking that even the hon. Member for Bromley and Chislehurst (Robert Neill) said that the Transport Secretary was not fit to hold office. We have real concerns that where there are opportunities to use imaginative forms of additional investment in rail in London, that option is currently blocked to London and Londoners, and to London’s economy and that of the wider area.
I have touched on regional policy and the particular situation in London and at Heathrow. In my view, transport policy, of which rail is a part, should be a servant, not a driver, of other policies. I may be going beyond the remit of the report today, but it strikes me that we cannot discuss regional imbalance in rail infrastructure, or whether the decision making is at a local or national level, or whether the cost falls on the private sector investor or the passenger, without addressing the overarching issue of Government investment in the transport infrastructure, and rail in particular.
Is the funding from Government for such an important driver of the national economy and the environment enough, or even comparable with other equivalent economies? I suspect it is not, and I definitely think it is not enough. Are passengers paying too much of the cost of running rail? I believe they are. An efficient, affordable, reliable rail service drives economic growth and regeneration, cuts carbon and pollution emissions and enhances the international image of a country.
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Nottingham South (Lilian Greenwood) on securing this debate through the Liaison Committee. I also congratulate her and the whole of the Transport Committee on the excellent report that we are considering today. I intend to focus my remarks on section 3 of that report, which concerns regional disparities in rail investment and their effect on economic rebalancing. I will also touch on the section relating to the next rail investment control period.
It has been a bad year for our railways in many respects. Along with other hon. Members, I recently took part in a debate on rail services in Yorkshire. The unanimous conclusion of those who took part in that debate was that passengers had been badly let down in recent months. Of course, a large part of that disruption was due to the timetable change introduced last May, but I am also convinced that historic and continuing under-investment in our regional railway infrastructure is a major cause of passenger dissatisfaction.
The report makes it clear that regions outside London and the south-east have not received a fair share of rail investment for years. That is especially true across the north of England. There has been persistent, long-standing underfunding of transport infrastructure in our region, which figures from IPPR North repeatedly show. Over the past few years, London has seen a £326 per-person increase in public spending, while the north has seen an increase of less than half the size—of just £146. Transport spending per person remains approximately twice as high in London as in the north, as it has been for the past decade. There are also significant disparities within the north. Last year, the north-west saw an average increase of £158 per person in transport spending, and yet spending in Yorkshire and the Humber fell by £18 per person—more than any other region.
As the report shows, this historic unfairness is set to continue. Analysis of the infrastructure and construction pipeline shows a stark gap between London and the rest of the country. In future spending, £1,900 per person is planned in London from 2017 onwards, compared with £400 per person in the north. The Secretary of State has attempted to brush aside that analysis, but it is clear that significant disparities are set to continue unless decisive Government action is taken.
The report also correctly describes why this regional funding gap persists. The current transport scheme appraisal method used by the Department for Transport and the Treasury will always favour London, as it prioritises congestion reduction and journey-time savings. That approach actively disadvantages less economically buoyant regions, and it must change.
I cautiously welcome the Government’s rebalancing toolkit, but it is nowhere near enough. It is also disappointing that the Government have not listened to calls to make the toolkit mandatory. Regional rebalancing must not be an optional extra, but should be at the heart of any transport investment decision making. For that to happen, the Government must commit to wholly revising the way that rail investment decisions are made. I urge the Minister to work with colleagues in the Treasury to revise the investment decision-making process so that places that have had a legacy of under-investment are treated more fairly in the future, which means putting economic regeneration and regional rebalancing front and centre.
As the Committees argue elsewhere in the report, past difficulties in delivering infrastructure projects must not discourage future investment. Areas that have seen a legacy of under-investment urgently need the projects to go ahead, so as we look to the next control period, the Government must make investing in regional rail infrastructure a priority.
I turn to Northern Powerhouse Rail. Bradford, like other towns and cities across the north, urgently needs that high-speed rail link to meet growing demand and to fulfil our economic potential, and investment in NPR should include a Bradford stop in the city centre, where the benefits will be felt by the greatest number of people. The Minister may recall from our conversation his supportive disposition to a Bradford stop on the NPR line. I must re-emphasise in the strongest possible terms the importance of that being a city centre station. The city of Bradford’s rail connections already operate under the disjointed legacy of two stations; adding a third station outside the city centre risks repeating the mistakes of the past. To be plain, a parkway station for the NPR outside the city centre would deliver neither the connectivity nor the economic regeneration that the city needs. It would represent an enormous missed opportunity. Independent research indicates that a Bradford city centre station would cut journey times and increase capacity. More importantly, it would add £15.5 billion to the north’s economy and generate an additional 15,000 full-time jobs across the Leeds city region.
NPR is the future we need, but more must be done right now to improve the punctuality and reliability of existing services and to banish outdated rolling stock. In West Yorkshire the public performance measure for rail operators, which combines figures for punctuality and reliability as a single measure, paints a depressing picture of almost universal decline in 2018-19, compared with the previous year. Performance on the Calder Valley line, which has a station stop in my constituency, was significantly worse than the year before. In some months, performance was almost 30% worse.
The train operator Northern recently admitted that it has not yet begun withdrawing the despised Pacer trains, which helps to illustrate the point further. As everybody knows, they are basically a 1980s bus body on rails. The firm blamed last year’s delays on electrification work, which contributed to the timetable and service chaos in May 2018. That is simply not good enough for my constituents or for businesses based in my constituency of Bradford South.
The Transport Committee’s report must be a wake-up call to the Government. We need action to rebalance our economy, boost our regions and give places such as Bradford the transport infrastructure that is fit for the next century.
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate the chair of the Transport Committee, my hon. Friend the Member for Nottingham South (Lilian Greenwood), on its detailed report and on the hard work that she puts into that brief. She is what we call in Greater Manchester a grafter—where I come from, there is no higher praise than that.
Transport is really important but does not act in isolation. There is an ecosystem that supports the society, community and local economy. It has been well trailed, but we have not seen any meaningful action on even beginning to address the regional imbalances in investment that have been well rehearsed in this place. It would be good to hear from the Minister about the practical steps being taken to invest outside London and the south-east.
We are told by the Library that overall investment in transport in London over the past five years was £33.4 billion, taking 27.6% of total transport investment. In the north-west it was £11.1 billion, taking 9.2% of the total; in the north-east it was £3.3 billion, or 2.7% of the overall transport spend. Looking specifically at rail, the gap becomes even wider. London gets 42.8% of rail investment, the north-west 9.4% and the north-east just 2%. How can that be justified, even with the difference in population? Given that the regions outside London and the south-east are seriously disadvantaged by Government investment, are we surprised that they are not realising their full potential?
The Library briefing makes it clear that the figures for the north-west and the midlands are temporarily inflated due to some of the early work on HS2. Geographical work tied to a region has been included, but the wider cost of HS2 has been pulled out of the figures, so it appears that the north-west and the midlands receive more through that project than they actually do. London is getting about half of the transport spend. How can that be right or fair, and how can it deliver a balanced UK economy in which every community can thrive?
I know Members here today are aware that there is a world of difference between our big cities and their surrounding towns. There are even bigger differences between the towns and the villages and districts. When we look at the transport ecosystem, it is really important that we are not just discounting. London is a benchmark and we discount for the cities, towns and communities, which means that most people in this country are poorly served by a transport system that does not work in the way it ought to.
We are not calling for any more or less than our fair share. I do not mind if London continues to receive the money that it has received for generations. I am not resentful if the forward view means that that continues, but I demand the same for my community. If the money can be found for London, it ought to be found for the north-west region, too—no more, but certainly no less.
We have heard about the cancellation of the electrification project in July 2017, when it was described as no longer affordable. We have seen timetable cancellations: there were a staggering 470 cancellations every single day in the summer of 2018. The Office of Rail and Road’s review concluded that that was partly due to the lack of clarity on who was responsible for what. There was mass confusion in the industry, and the Transport Secretary’s response was simply, “Well, I don’t run the trains.” If we have a Transport Secretary who refuses to acknowledge his own role in running the trains in this country and to have political accountability for that, it is little wonder that the operators get away with what they are doing. There is just no accountability, which for my community means that Northern continues to provide a completely sub-standard service on a daily basis. It not only botched the introduction of the new timetable; but is in constant disputes with staff who are at their wits’ end with the management and the way they are being treated.
The latest action is on whether carriages should have guards. People in Greater Manchester might think, “Well, even if there are no guards, we just hope there are some carriages”, because 11% of train journeys are shorted, which means that they do not have enough carriages to meet the demand from commuters. Some 5,500 journeys did not have the capacity to meet passenger demand. What is the answer? In the north-west, we have been sent trains that even the Iranian Government have decided are not fit for purpose. We have been sent more Pacer trains—from the north-east to the north-west—to make up for the fact that we have passengers who wait on platforms, without enough carriages to service them, in order to get to work and get their children to school. How can that be right? The trains were built in the 1980s and were always intended to have a shelf-life of about 20 years. They were a pragmatic and affordable way to get new stock on the lines, but they were never intended to be on the lines nearly 30 years on. That just cannot be right.
Passengers face a 3.1% increase in fares—the largest increase over the past six years—while shareholders continue to profit from a sub-standard service. We know that the Conservatives do not believe in nationalisation. Well, they do—provided it is another nation that runs our trains. Deutsche Bank, which owns and operates the trains in the north-west of England and serves Greater Manchester, is not providing an adequate service; it is making profit from that contract. Where is the accountability? We have a Transport Secretary who says, “It’s nothing to do with me, guv.” We have an operator that is taking money and creaming off the top while services are not running on time. They do not run at all in some cases—when they do turn up, often it is not possible to get on because there are not enough carriages. If the operator gets its way, pretty soon there will be no guards on carriages, and people will not feel safe. The Mayor of Greater Manchester has made it very clear that that is just not on, and he would not be comfortable with that. The truth is that it is a very raw deal.
I will talk about the wider transport ecosystem. We need to bear in mind that it is not just rail that has been hit by poor service. When the Pacer trains were brought in for their 20-year life—nearly 30 years ago now—bus travel was commonplace. It still is, but there are now 140 million fewer bus journeys in Greater Manchester than there were 30 years ago. That is a 40% decline in bus use in Greater Manchester. Why? Because there are 40 operators in Greater Manchester—we are desperately trying to get franchising off the ground, but the Government are not providing the investment required to get through the legal process and produce the business case—all with different ticketing systems, and all deciding where they are willing to operate.
Oxford Road—the university corridor in Greater Manchester—is one of the busiest bus routes in Europe, and one of the cheapest. One of the most affluent parts of Greater Manchester—the south—is the cheapest place to catch a bus. In the north, which is generally the poorer part, the fares can be 40% higher. Often the poorer a person is—depending on where they live and where the operators choose to operate from—the more they pay just to get to work. That, by the way, is if there is a bus that goes where they need to go at the time when they need to get there. Shift workers in Greater Manchester might as well give up on the buses, because they cannot get to most big employment sites, such as Manchester airport or Trafford Park, to meet shift-work patterns.
The ecosystem has been completely torn apart. Operators pick and choose what they are willing to do, the taxpayer is desperately trying to plug the gap but it is nowhere near enough, and the number of bus journeys is falling. Year after year, we see subsidised routes taken away because the money does not stretch far enough, and the same is happening with rail.
It is a raw deal for taxpayers, passengers and, critically—this is really important when we are talking about a future Britain beyond Brexit—the future of our economy. After Brexit, the country will be hugely vulnerable to the danger of financial services and the insurance market deciding to relocate and basing themselves elsewhere in Europe. That will expose how lazy this country has been in addressing the underperformance in our regions. We have relied on the City of London to keep the UK economy going, and that has allowed us to ignore the hollowing out of the economies in the regions. Transport is a key part of that. We know that investment in transport leads to growth and jobs and creates a more vibrant economy. People live better lives and can access job opportunities that they might not have been able to access previously. We need more action and Government spending.
There are different views on HS2. I am a supporter, partly because it is investment in the north, so why would we not support it? However, the Chief Secretary to the Treasury is already issuing calls for a zero-sum review of capital spend projects such as HS2. I put this down as a marker: the Government may believe that, because it is not in London or the south-east, it is an easy target to be deleted, but we are watching it very carefully. It is critical that we ensure that the UK can perform to its full potential. The routes and investment beyond HS2 to ensure that the north of England is connected are absolutely critical, too.
I wholeheartedly endorse my hon. Friend’s concerns about future investment in HS2. There are good reasons to be concerned. When the transpennine route upgrade was firmly committed to in 2015, the DFT promised that, when the work was finished, the whole route from Liverpool to Newcastle, via Manchester, Leeds and York, would be fully electrified. The recent letter from Transport for the North’s chief executive board members reported that the DFT’s plans leave a crucial part of that route unelectrified—a gap of 18 miles in the 183-mile route. Does my hon. Friend agree that the failure to electrify that 10% will mean worse reliability and higher operating costs in the north for years to come?
I generally think that, with these types of capital project, once the decision to invest is made, the investment has to be seen through, because the full potential of the investment is only realised when it is done to the quality, standard and specification that was set out originally. When things are chipped away towards the end of a project, it is inevitable that the full advantage and economic return on the investment will not be realised, and the original investment will be compromised.
It is critical that the Government take a long-term view. There is far too much short-termism. They are looking to the next election, the next target seat and where their core vote is, rather than to what the structure of our economy will be in the next 10, 20 or 30 years. Greater Manchester is trying to look ahead with its 2040 strategy, but it is very difficult to do that if it does not know what funding is coming down the pipeline. We can decide what is important for our regions, but the way the Government invest makes it very difficult for our regions to plan ahead and ensure they have a joined-up transport strategy. It also makes it very difficult for UK manufacturers and engineering companies to bid for that work and plan ahead, because they do not have a forward programme that they can organise and work towards. I speak to many manufacturers in my constituency. In Oldham, they have contracts with Transport for London and the German Government, but they say consistently that it is very difficult to get a contract with the UK Government. Part of the reason why the Elizabeth Tower is shrouded in steel from all over the world, apart from Britain, is that it is easier for other countries to get contracts from our Government.
The hon. Gentleman is making a very strong case for investment and economic growth in the regions. I agree completely that this is about long-termism. The Minister obviously heard my comments earlier. Part of the reason why the Great Eastern main line taskforce has been pretty robust in our representations is that we have been working with businesses and local enterprise partnerships. We are giving businesses the opportunity to put the long-term case to the Government. Does the hon. Gentleman feel that other regions should replicate that?
I agree with that approach. It is important that we have an economic view and can demonstrate the wider economic advantage and growth. Transport for the North is working to that end, and has built very good partnerships. It generally has a good relationship with the Government, although there are constant demands for the Government to plan further ahead and be more committed to finding resources. That partnership approach is extremely important.
This has been a good debate. I welcome the Select Committee’s report, because it is important that we shine a light on these issues. As a north-west MP, I thank the Committee members for this piece of work. MPs outside London will, for a period, continue to ask politely for our fair share. We have been doing that for quite a long time now, but the noise will get louder. If the Government are determined to look beyond Brexit and build a Britain that can thrive, they will have to put their hand in their pocket and ensure that every region in the UK gets its fair share.
It is a pleasure to serve under your chairmanship, Mr Evans, and to sum up the debate on behalf of the Scottish National party. At a momentous political time, such as we have experienced this week, it is easy to forget about the many Government portfolios that require attention and scrutiny. Brexit may be dominating the headlines and the levers of government, but it should not be used as an excuse to sweep all other policy issues under the rug. It has therefore been helpful to hear hon. Members’ contributions, which I shall refer to throughout my speech.
A common theme in this debate, the Transport Committee’s report and wider political reporting is a clear concern about the Department for Transport’s handling of the rail network. The report highlights concerns about the boom and bust investment cycles, and the failure to give the industry sufficient confidence to invest in its workforce, skills and innovation. Other evidence gathered by the Committee cast doubt on the Rail Minister’s understanding of how and where emerging technology, such as battery-powered trains, is being developed. Perhaps it is forgivable for a Minister not to have a comprehensive understanding of absolutely everything covered by their Department, but it will not reassure those asking serious questions of the Department for Transport and Network Rail.
[Andrew Rosindell in the Chair]
Certainly, the headlines will not comfort the UK Government. With news outlets talking about meltdown, appalling services and chaos, it is clear that the rail network in England is failing at the most fundamental level. Of particular interest to me—this was mentioned throughout the debate—is the disparity in transport expenditure across the UK. Unsurprisingly, the Committee’s report noted that there is a massive disparity between rail investment in London and other parts of England. Although we should consider the difficulties in accurately breaking down regional funding, we cannot ignore the problematic London-centric nature of funding in the UK. Figures from the House of Commons Library show that railway spending per capita in England was up to 10 times higher in London than in other English regions. If I were a resident of the east midlands or of Yorkshire, I would ask serious questions about the levels of funding in my area.
Transport bodies in London and the UK Government will attempt to rationalise—or even justify—those disparities, but the Department for Transport’s introduction of a rebalancing toolkit is a clear acknowledgment of the problem. Thankfully, in Scotland we have the Scottish Government to act in our interests. It will come as no surprise that SNP MPs support the Scottish Government’s call for Network Rail to be fully devolved. Research commissioned by Abellio in 2018 found that just 30% of people support the current arrangement, with a majority supporting the full devolution of Network Rail. I also welcome the proposals from Reform Scotland and the former Labour Transport Minister, Tom Harris, for Network Rail to be fully accountable to the Scottish Government. That is a common-sense approach.
I would argue that it is completely logical to devolve those powers fully, given the Scottish Government’s existing transport responsibilities. That case has been repeatedly made to the UK Government and has been repeatedly ignored. Indeed, the Secretary of State for Transport said on record that he does not believe that
“the Scottish Government are capable of overseeing it properly.”—[Official Report, 16 May 2018; Vol. 641, c. 291.]
That is certainly a bold claim in the light of his Department’s well-documented failings.
Passengers can become frustrated when their rail service does not operate as expected. In Scotland, people often become angry at ScotRail and the Scottish Government for problems that arise from Network Rail’s infrastructure—a UK Government responsibility— and given the tangle of responsibilities between devolved and reserved matters, that is an understandable confusion. The devolution of Network Rail’s activities in Scotland would therefore improve accountability and allow the Scottish Government to build on the action that has already been taken to improve services.
There has been significant Scottish Government investment in the ScotRail franchise for the benefit of rail users. There will be a 23% increase in seating capacity and more than 200 new services across Scotland by the end of 2019. The Scottish Government will continue to invest £1 billion in public transport every year. According to the latest figures, that support means ScotRail’s performance measure has been higher than the UK average. Importantly, the Scottish Government will use powers from the Scotland Act 2016 to allow a public sector bid for all franchises in Scotland. The facilitation of such bids ensures that the Scottish National party will deliver what was promised: a robust public sector bid for the ScotRail franchise.
In closing, I believe that the Transport Committee’s report should form part of a wider review of the rail network, and the SNP welcomes the long overdue acceptance by the UK Government that a review is necessary. The Department for Transport must commit to implementing any future recommendations. I hope that the Minister can assure me that the UK Government are serious about their decentralisation agenda. If they are, I would be grateful to him if he outlined what discussions he plans to have with his Scottish Government counterpart, particularly in the light of polling that shows widespread support for the devolution of Network Rail.
The debate has been excellent. I pay tribute to my hon. Friend the Member for Nottingham South (Lilian Greenwood) and to all members of the Select Committee for the excellent work done to pull the report together. We all really value the detail that the report brings to the fore. I certainly concur with all that my hon. Friend and other hon. Members have said about how important it is to get our infrastructure right and for the governance of our rail structure to be in the right place.
Clearly, there are lots of question marks over the current system, and that was really brought to the fore as a result of control period 5, where costs ran away with themselves and we saw the rescheduling of work. In fact, £3 billion-worth of renewals—let alone enhancement programmes—will be pushed into the next control period. We clearly need better governance of our system.
As hon. Members will recall, it was most astounding when the Government cancelled crucial electrification programmes as Parliament rose for the summer recess of 2017. The Oxenholme to Windermere line subsequently had a heritage railway running on it that summer just so trains could travel to the Lake district at the peak of the season—a vital part of the tourism industry. The Kettering to Sheffield stretch—the midland main line—was subject to a de-electrification announcement. Other programmes were cancelled, such as the Cardiff to Swansea line—it is absolutely vital to Swansea’s economy that power is put into those lines—and, of course, we have heard much about the transpennine route, which has been further downgraded since, meaning a downgrade of a downgrade. The crucial part of that line, between Huddersfield and Stalybridge, will not see electrification. The route will therefore not be fit for future freight, which is vital; journey times will be compromised; and reliability will be downgraded. That is crucial, especially in the light of the pain people experienced last summer on those lines. I urge the Minister to complete the whole transpennine upgrade and control period 6 programme, as has been advised by Transport for the North. That will be a game-changer for the northern economy.
The only thing that has been guaranteed is more capacity in the rolling stock, but of course, with dirty diesel bi-mode trains. It is time that we moved to using cleaner forms of transport. The Transport Committee certainly drew out the importance of that, and of the whole electrification programme and the digital rail opportunities that it would bring, which my hon. Friend the Member for Cambridge (Daniel Zeichner) also highlighted.
We have seen the reality of where lumpy, boom-and-bust scheduling leads: additional costs to the rail industry. Skills and jobs have been lost as a result of those peaks and troughs in the way that rail work has been scheduled. The Railway Industry Association highlighted in particular that a 30% saving could be made if costs and the scheduling of work were smooth. That benefits passengers with regard to the price that they pay for travel, as my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) brought to our attention. It is absolutely crucial, therefore, that lessons are learned and that there is a smoothing of scheduling as we move into control period 6. Our proposals for the railway would see a longer-term smoothing of scheduled work, which would fit in with the growth of the economy—as so many hon. Members have highlighted, our transport system interweaves with future economic opportunity.
We have heard about the inequality and the regional disparity across our network. If we are serious about communities outside London—the further north we head, the less spending there seems to be on our railway, which is reflected by the number of people who are able to use it—it is absolutely crucial that we get the rebalancing toolkit right, and that we ensure that it is mandatory and fully utilised, to the advantage of all communities across our country. The northern powerhouse and the links between Leeds, Manchester and Sheffield present a real opportunity to boost the economy of the north, and everything that will swing from that would be such an improvement of people’s lives and social mobility, which is why we want proper rebalancing as we move forward. Hon. Members have drawn attention to that, not least my hon. Friend the Member for Oldham West and Royton (Jim McMahon) in his powerful contribution.
As we bring the programmes together, we need to ensure that we bring track and train together and move the silos of discussions into one integrated place, because not doing that and the changing of mind on programmes led to the catastrophic failure in the timetable that so many passengers faced in the summer. We have read the Glaister report on the impact of what happened, but we must learn lessons, and attitudes at the heart of Government must change. There must be greater accountability and the Secretary of State must take full responsibility as we move forward to enhance our railway system.
I want to draw out one or two other points in the Select Committee report that are crucial as we look to the future of rail. First, we must ensure that we prioritise cleaner technologies in our rail enhancement programmes. We have real opportunities, but we are falling behind other nations. We must ensure that we put the environmental impact of our transport system at the heart of decision making. Transport accounts for 29% of carbon use in our country, so it will be the game-changer as we move towards ensuring a reduction in emissions. It is absolutely imperative that we have carbon budgeting across our transport system. That issue was raised in the report, but the Government response was dismissive, so it is crucial that we continue to press the issue.
Secondly, I am deeply concerned about the skills needed to deliver all that is contained within this excellent report. I ask the Chair of the Select Committee and the Minister to reflect on skills. Not only with Brexit, but with an ageing demographic across the rail industry workforce, we face real issues and challenges: we are on a cliff-edge of skills. I ask the Minister exactly what is being done to ensure that we have the opportunity to expand our railway, as we know we must.
We have heard this afternoon from hon. Members from across the regions. The opportunities for our railways are there to be grasped, whether it is putting in the full Crossrail programme for the north, or investment in the eastern region, as the right hon. Member for Witham (Priti Patel) highlighted, or making greater transport connections into Heathrow, or, although not represented today, implementing the peninsula programme in the south-west. We must ensure good connectivity, which is absolutely vital, and sustained investment work all joined together.
I think these are really exciting times for the future of rail, as we move forward. Certainly I look forward—it may be very soon—to my hon. Friend the Member for Middlesbrough (Andy McDonald) becoming the next Secretary of State for Transport. We have spent so much time with the industry. We have done the work. We do know what is needed. We will radically change the way that our rail system operates, for the benefit of all those who use it.
I thank the Transport Committee once more for its work and its ongoing focus in holding the Government to account over the way that rail is advanced in our country. Governance is absolutely crucial if we are to ensure that we have value for money, deliver for passengers and ultimately have a system that makes our economy strong yet again.
It is a pleasure to serve under your chairmanship, Mr Rosindell. I pay tribute to the hon. Member for Nottingham South (Lilian Greenwood) for her work as Chair of the Transport Committee and for her work in producing this report. I also thank her and other members of the Committee for the broader work that they do. I look forward to working with all of them over the months ahead.
I echo the words the hon. Lady started with on the importance of the rail industry to the UK economy. The Government fully recognise the importance of our nation’s infrastructure, and at its heart is our rail network. That is why we are investing record levels of rail funding—around £48 billion in the next control period between 2019 and 2024—in modernising our railway and giving passengers the reliable and punctual services they deserve. Our investment in vital railway works is aimed at what will improve performance for passengers and ensure safety and reliability. The operation, maintenance and renewal of the railway will help ensure smooth operation of the network. Our investment across the country, such as the £2.9 billion transpennine route upgrade, which I will talk about later; the ambitious works at Derby to modernise and improve the points and track there, completed on schedule in October; and the wider commitments, including dedicated funding for further improvements for freight and accessibility in the next investment period—all demonstrate how we are meeting the needs of passengers and freight users on our network.
The hon. Member for Brentford and Isleworth (Ruth Cadbury) mentioned fares. I am happy to point out that we are in the sixth year of capping regulated fare rises in line with inflation, and we are introducing new railcards so that anyone up to the age of 30 will have access to discounted rail fares. Our franchises support the introduction of record levels of private investment in the railway, including brand-new trains across the network.
The Labour party talks regularly about how the benefits of nationalisation will be cost-free, but the benefits of privatisation have brought investment, and nothing is more obvious than the arrival of the new rolling stock. We will see 7,000 new carriages enter service on our network over the next couple of years. The hon. Member for Oldham West and Royton (Jim McMahon) mentioned Pacer trains, and they will go this year as part of the renewal of rolling stock. It is worth pointing out that the rail franchise that dominated the north, including his and my area, was let in 2004 and expired only in 2016, and it was a no-growth franchise.
Yes, I will grant the Minister that. Does he not recognise that the private sector is not investing in rolling stock? It leases the rolling stock off companies and so the amount paid has a massive premium—about a third more, as found out by Merseyrail, which has now purchased its own rolling stock.
How individual operating companies wish to own and run their rolling stock is up to them, but the point is that private investment and the private sector, whether it pays for a lease or for ownership, is delivering, and the public sector did not, which is why we have the long-standing Pacer trains on our network. The no-growth franchise was a significant feature. I am sure that those who let that now think that that was a mistake, because of course we have had significant growth in the north and we are playing catch-up.
It is fair to say that we had a difficult year on our rail network in 2018, as many colleagues here have said. We all know that performance declined, never more so than around the introduction of the timetable in May. But it is also fair to say that we have seen a doubling of passengers across our rail network over the past 20 or so years, which shows it is a ringing success, demonstrating the success of the public and private sectors working together to deliver significant and sustained improvement.
I accept that passenger numbers have increased, but the truth is that the summer delays and the autumn cancellations were not a surprise. The timetabling was agreed by Northern. It designed it, crafted it and failed to implement it properly. The delays in the autumn were down to autumnal weather, which obviously takes everybody by surprise. It is not as though it happens every year when leaves come off the trees and fall on tracks. The basic management is poor, and surely not fit for purpose.
The Minister is incredibly generous in giving way, and I thank him. Delays are the scourge of commuters on the country’s train network, and of course they all get upset when trains are cancelled or delayed. Is there more the Minister can do to hold franchisee companies to account, with respect to how they communicate with customers and give compensation to rail users?
My right hon. Friend makes a powerful point. She gave a powerful speech, which recognised how transport investment, alongside other investments, can drive an economy. The work that she and colleagues have done on producing a business case has been highly effective. She asked whether I would work with her and of course I will, as I will work with all colleagues, to maximise the benefits of the rail investment we are putting in. As to communication, rail companies can do more. We should be looking at all digital and other means of communicating with customers to keep them informed. There are mechanisms through the franchise agreement for keeping the companies accountable. However, I also regularly meet the Rail Delivery Group, and through those and other regular meetings, with individual operating companies, I have already highlighted the issue of communication with their customers. I will continue to do so, but my right hon. Friend is right that there must be improvement on that.
I was saying a few things about how our network has played a role in the increasing economic growth of the past few years, and how that combination of the public and private sectors, working together, has delivered improvement. That includes private sector skills driving investment for passengers and rail freight. However, that success has also resulted in challenges. We have been open about facing such challenges, including in our programme of infrastructure works in the current investment period, and in the rail structures we inherited. That was very clear and it is why we have taken action and changed our approach. The work of the Select Committee has been very helpful in that respect.
In March 2018 we published our new approach to rail enhancements, called the “Rail Network Enhancements Pipeline: A New Approach for Rail Enhancements”. We have a knack of creating very difficult-to-say acronyms. In September the Secretary of State announced that he had appointed Keith Williams, a respected industry figure. He has expertise in driving customer service excellence, and therefore he is incredibly valuable as we seek to reform the rail industry to become more passenger-focused, and to lead a root and branch review of the railway. The Government’s new approach to enhancements has, as Members will be aware, been a key focus for the Transport Committee. The Williams review is a really exciting moment for our industry. The structures that we have had have helped to turn around decades of decline. We have gone from many years of decline to rapid growth. As many people now use the rail network as did in the 1920s—with all the challenges that come with that, which I shall come on to. The structure has helped to achieve the growth, but it is not clear to me that it will help us take things forward for the next stage. That is what Mr Williams has been asked to consider, and it is an interesting prospect.
The approach being taken learns lessons from CP5, responding to the recommendations of the Bowe review. It is quite profound. We are replacing a once-in-five-years plan with a rolling pipeline of investment, which was a key recommendation of the Committee. I can entirely see why both the review and the Committee made that recommendation. We will be able to respond flexibly to changes in circumstances, and emerging priorities. Unlike in CP5 where certainty—I know we have talked about it—often turned out to be frankly illusory, the supply chain can be confident that once we have made a decision we will stick to it. Those concerned will know exactly how far the commitment extends, for funding and delivery. I completely agree with the principle of transparency to help people plan accordingly. We shall be transparent about the progress of individual schemes as they move through the pipeline, and throughout the control period, but the point is that we are not simply making one announcement at the start of a cycle.
The RNEP has five stages, through which enhancement schemes move from concept to delivery, with increasing levels of detail and development required at each stage. We call them “determine”, “develop”, “design”, “deliver” and “deploy”. A theme runs through them, from “determine”, where the opportunity is identified, to “deliver”, where the solution is provided. Not all projects will progress through all the stages. Each stage is preceded by a decision point, where we will decide whether the scheme is ready to advance to the next stage, whether more work is needed, or whether there is a better way of achieving things. We commit to progress only to the next stage—not all the way to completion.
I completely understand the point that just because something enters the enhancements pipeline that does not mean it will reach the end. That depends on its progressing through the gateways. However, I should be grateful if the Minister set out clearly which parts of the enhancements pipeline will be transparent to the House and the wider industry. Will we know what things are in all the stages, or will we know only about the latter stages, once something has been committed to delivery? It would help us if we could be clear on that point.
My intention is that we should be as transparent as we can without giving a running commentary on schemes that also present challenges in the managing of expectation. I intend to be transparent about progress as they move through the pipeline—in the phrase I just used—and that suggests each stage of the process.
Yes, exactly. What form it will take I do not know, but as schemes progress through, from “determine” to “develop” and so on, we will be transparent about it.
The objective is to secure value for the taxpayer by progressing schemes only when we have an appropriate understanding of how much they will cost, how long they will take, and the benefits that will be delivered. That is in great contrast to CP5, where that did not happen.
As the Minister will know, the Great Eastern main line taskforce is currently working to that very pipeline, for the next business case. Funding will be incredibly important for any project that enters the pipeline. I want to ask the Minister something on which I have previously pressed the Secretary of State. Will there be an opportunity to look at cross-Government funding that covers, for example, money from other budgets, such as local government and the Department for Business, Energy and Industrial Strategy? As the Minister knows, the GEML case made in 2014, which will be made again, looked across at the economic benefits of rail investment, and considered economic growth, too. That effectively means that we must look at new funding mechanisms that go across the Treasury, the Ministry of Housing, Communities and Local Government, the Department for Transport and the Department for Business, Energy and Industrial Strategy, so that we bring the economic benefits that many colleagues have spoken about in the debate.
My right hon. Friend is as wise as ever. Once a Treasury Minister, always a Treasury Minister, I suspect. The point about bringing things together was, I think, at the heart of such things as the national productivity investment fund, which is about making sure we have, and control, the levers to drive economic productivity—productivity being at the heart of the UK’s future economic success. I see rail working alongside Departments to open up opportunity—commercial, residential, trade and so on. I see that future of collaboration as the way we will take forward some of our projects across the network.
One simple way, of course, is to ask the Minister concerned. I will find out exactly where we are with the Ely junction and respond to the hon. Gentleman. Significant works are planned around Ely, but there are a number of junctions around Ely—I have reviewed a map of them in the past few weeks—and I will need to remind myself specifically which one that might be.
Let me go back to the changes to CP6 from CP5, which create a direct contrast. I think it is fair to say that in CP5 we overcommitted to projects at too early a stage, meaning that later we had to change the scope or cancel altogether, increasing the uncertainty and the impact on the industry’s ability to plan for investment and delivery. The RNEP sets out the Secretary of State’s four priorities for rail enhancements across the country, and we will not progress any enhancement that cannot clearly demonstrate how it meets at least one of them. It is important that those priorities remain applicable to the whole country so that the network can be improved fairly and as a whole.
I welcome the fact that the Transport Committee’s report shared a similar approach to our own in promoting engagement with third-party proposals for rail schemes. On 20 March last year the Department published its guidance for market-led proposals and launched a call for ideas for the same. That call for ideas ran between 31 May and 31 July last year. We received 30 responses. DFT officials have assessed all of them and will now work with promoters to move their schemes forward, although I stress that they will still be market-led. We will be transparent about schemes as and when they progress into the pipeline.
The question was whether this has stalled. No, it has not. We certainly want to see new entrants into the market and ideas being brought forward. I am absolutely clear that not all ideas to drive forward our network will come from SW1—that would be silly.
I thank the Minister for confirming that 30 proposals were received by the Department. I know that he does not want to raise expectations or to give us too much information, but will he at least confirm how many of the proposals are being progressed? Of those 30, how many are the Department taking forward? When might we expect to hear more about which those are, and where in the country they might relate to?
I cannot remember off the top of my head. I looked at the schemes but cannot remember the answer. I will have to write to the hon. Lady with the details.
We spent a bit of time discussing electrification. The hon. Lady expressed some concern and asked whether we had ruled out electrification. Clearly the answer is no. Our railway infrastructure investment in CP6, however, is about securing positive outcomes, not necessarily specific outputs or inputs. We want to secure benefits for rail users and to do so in the best way possible, rather than simply building more railway for its own sake. Passengers expect high-quality rail services, and we are committed to electrification where it will deliver passenger benefits and value for money.
We will also take advantage of state-of-the-art new technology to improve journeys. The hon. Member for Cambridge (Daniel Zeichner) talked about digital rail. Certainly, technology has a role to play. It is one of the exciting opportunities in the sector. We are already progressing a number of digital rail schemes, using the £450 million secured under the autumn statement 2016 to begin the roll-out of that vital technology. I agree with his points.
Our new approach is designed to provide the maximum possible certainty of investment and a sustainable pipeline for the supply chain. That will provide benefits balanced for the whole country. I met the Railway Industry Association and understand entirely its point about how unwelcome “boom and bust” is. One former Chancellor and Prime Minister talked about putting an end to boom and bust—I am not sure that he would use that phrase again—so I will be cautious in my language and instead say that we will smooth the pipeline of work so that the industry can plan appropriately—skill up and scale up.
However, I suggest that the industry should look at a £48 billion budget pipeline over the next five years and think, “Fantastic!” This Government are buying rail like no other Government in British history. We live in a bumper time for our railways, in terms of rolling stock investment, enhancements, new lines and maintenance. I would imagine—this is what we see—that a lot of people look at this and think, “I want to get some of the great work being done by the UK Government.”
Another aspect of technology to promote is how it can deliver outcomes. That includes the introduction of new bi-modal trains, which reduce disruption to passengers resulting from heavy infrastructure works. The new bi-modal trains are being delivered into service with Great Western, LNER and TransPennine, bringing modern traction technologies on to Britain’s railways.
We continue to promote the use of new technology across rail. Recent franchise competitions have included requirements for bidders to develop innovative solutions around rolling stock technology that will, among other things, reduce emissions on the network. I am keen to take forward the decarbonisation agenda, which the hon. Member for Nottingham South mentioned, and it remains an absolute priority. I will work with the industry and will publish that report—it cannot happen soon enough. I am talking about publication of the decarbon- isation report and about working with different types of traction, such as hydrogen-powered trains, which I have read about. I look at the opportunities that they present to improve air quality radically, and I think, “We want some of that in the UK.” It will certainly be a priority.
The Minister is being characteristically generous in taking interventions. I welcome the news that the decarbonisation report will be published. Will he clarify whether he has received that report from Malcolm Brown, the former CEO of Angel Trains? Will the Minister tell us a little about what is in it, or when he will share that information with us?
We have received a further draft within the past few days. It is not the absolutely final version of the report, but I understand that we are very near it. I hope to read it, but I think that I should read it when it is finished, rather than in draft form—to be fair to Mr Brown. As soon as we have more information, I will keep the hon. Lady posted.
Regional spend has been a concern in this debate and more broadly. The hon. Member for Kingston upon Hull North (Diana Johnson) kindly said that I was definitely listening—to confirm, I am definitely listening, and definitely Yorkshire. The Government are clear that there should be a balance of rail investment across the whole network, to the benefit of the whole country. The Government and the Select Committee alike agree that capital spending in one part of the network can deliver benefits further afield.
I must stress, however, that the Department for Transport does not allocate funding on the basis of per head of population. Our railway is a network, with spending in a particular area benefiting users up and down the country.
Does the Minister agree that part of the problem with how schemes are assessed is that heavy consideration is given to economic return or gross value added? A mile of track in London will therefore always deliver more economic return than a mile of track in Manchester, Wales, Scotland or anywhere else, simply because of that economic assessment. Surely, to rebalance the UK, there has to be a levelling up in addition to that economic criterion.
I understand the hon. Gentleman’s point, and if that were the only consideration I can see how it could lead to inappropriate decisions, but that is not entirely the case. For example, the transpennine rail upgrade, which will be the biggest enhancement on our network over the next five years, would simply not be happening if we accepted his point. But I understand where he is coming from: we have to balance not only economic return and national efficiency, but the possible role in rebalancing our national geography. The lack of investment in some parts could easily be seen as a factor in economic performance.
Our decisions follow a rigorous and fair appraisal process that ensures spending goes to the projects and programmes where it is needed, delivering value for money for taxpayers and passengers. Sometimes that means that spending appears higher in some areas than in others. We cited various figures, but the numbers quoted are frequently from the IPPR. I have some reservations about the IPPR reporting, because it simply adds up future spending regardless of how far it extends. For example, its analysis includes 16 years of planned expenditure on HS2, where the most costly sections—because of land prices—are in London, but only five years of planned spending on maintenance for the other parts of our network. It includes locally funded spending by TfL, but not local, equivalently funded spending in other cities, which will result in a poor sample.
We look at data in a number of different ways. Investment in Birmingham, for example, could benefit users in Penzance, Edinburgh—anywhere across our network—and, of course, the west midlands. We look at two measures: where the investment is made and where the benefits will be felt. The numbers quoted so far on where spending is taking place largely have not taken into account where benefits are felt. However, spending figures going forward, as shown by the national infrastructure and construction pipeline, show that the Government expect to spend £248 per person in the north, compared with £236 in the south. There is an element of the phasing of schemes driving the individual spend in an area.
The rebalancing toolkit has been considered, which we have developed to support authors of strategic cases to assess how a programme or project fits with the objective of spreading growth around the country. I was asked whether it is being used. It is being used in the development of the transpennine rail upgrades and the Northern Powerhouse Rail business cases. The rebalancing toolkit is designed to help with the basic planning. It includes a checklist of questions to consider and potential evidence that can be used to help describe the rebalancing case for a project or programme in its strategic case. It is an ingredient. Does it need to be used in every single case? Given the amount of money we spend and the amount of time it takes us to plan our projects, I do not think it should be mandatory everywhere, but certainly it is an ingredient in making the right decisions. The toolkit’s objective is to make decision making more consistent by improving the focus, quality and transparency of the rebalancing evidence in the business case.
Let me answer some questions asked by colleagues. The transpennine rail upgrade offers the fantastic prospect of the north being the centrepiece of the next spending period. It is a £2.9 billion first phase of a scheme. Electrification will be a part of the proposals. It is phased to deliver the best benefits to passengers over the period. Freight will most certainly be considered; that is why we are also taking forward options for the development of the Skipton to Colne reconnection. It should be viewed as a phased activity.
The advice we have received from Network Rail is that if we spend any more money on that network during this period, with the amount of interventions required to deliver the schemes we will bring the northern rail network to a halt for just about every weekend over the next five years. We have taken the view that it would be an unacceptable price to pay, which would have a huge detrimental economic impact. We have listened to the industry experts and that is the advice they are giving us, so we are delivering this major project in phases. The criteria are about delivering the best benefits to passengers early, but our ambitions are not reduced at all.
The wider considerations are taken into account. This is part of a broader plan. As the business case is created, it looks at economic benefits and environmental benefits. It is a wider case.
The hon. Member for Brentford and Isleworth asked about devolution. It is being considered as part of the Williams review, but the principle of devolution is a sound one. The suggestion that the Secretary of State is not supportive of Crossrail and the London Mayor is not correct. For example, TfL has run into some financial difficulties over the Crossrail cost overruns. We are helping it with a £2.1 billion credit facility, which it will pay back—it is a loan, not a grant. That is an important indication of how we are supportive of Crossrail and the London Mayor.
I would like to return to the transpennine route. From meetings with officials, my understanding is that the challenge is not in the tunnel but across three bridges. For that reason, the electrification programme has not been advanced between Huddersfield and Stalybridge, which is the real game-changer. The challenge is also to make the necessary upgrades to accommodate future freight. Will the Minister assess the advice from Transport for the North to ensure that the proper full upgrade is brought to the line? It would have a significant impact on reliability and will drive efficiencies in the system.
I am very keen for that line to be upgraded and will ensure that all the opportunities to progress it are considered. I want to make it absolutely clear that there is no loss of ambition, but at the same time we must be very careful when industry experts tell us that if we do any more we will bring the network to a halt for just about every weekend in five years. That is the advice from senior levels in Network Rail. On getting on with it, that cannot happen soon enough as far as I am concerned.
We still have 42 minutes left, but I do not anticipate that we will take that long. On the transpennine electrification, I accept the Minister’s point that we do not want excessive disruption, but will he accept that it is better to do the right thing, which will lead to cost-effective operations, environmental benefits and reliability benefits in the longer term, even if that sometimes means that delivery of the scheme will take longer? Will he commit to talk to Rail North about how the maximum benefits can be achieved in the long term, rather than a short-term approach that could bake in disbenefits over a very long period?
I will continue to talk with all the different bodies across the north to maximise the benefits. We are not taking a short-term approach; a short-term approach would be to get on and do it right away. We are taking the approach to deliver it in phases to maximise the benefits. At each stage we are also future-proofing it. That principle is already being implemented.
The hon. Member for Bradford South (Judith Cummins) talked about Northern Powerhouse Rail. I am also very keen for Bradford to be well served by that. Indeed, Transport for the North is developing the proposals for Northern Powerhouse Rail. That is great—it will be from the north, for the north. I went to Transport for the North’s last board meeting, at which I was going to receive the strategic outline business case. Transport for the North had to pull that business case at the last moment, but I will go up to its next board meeting; I do not criticise it in the slightest for that. The hon. Member for Nottingham South just mentioned the principle of getting things right for the longer term, and in pulling the business case, Transport for the North was making sure that it does that.
Northern Powerhouse Rail is a very exciting project. The only point I made when I said I would come back for the next board meeting was that I wanted Transport for the North to get on with the project promptly. Northern Powerhouse Rail and HS2 are linked in lots of ways, and any delays to Northern Powerhouse Rail could compromise other projects, so I urged speedy progress.
Colleagues mentioned HS2. I take the opportunity to confirm that HS2 remains a critical project for the Government.
In the light of the comments by the Chief Secretary to the Treasury, what representations has the Department for Transport made to reassert the case for HS2? Is the Minister confident that if there were a value-for-money review, the project would make it through?
I could answer that in a few ways. First, it is clearly right that the Treasury takes a view on managing the efficiency and delivery of public projects, because so much money is involved. We are spending half a billion pounds a week more on capital projects than the last Labour Government. We are catching up on investment.
What representations do we make? Of course there is regular dialogue between Ministers from all Departments, and certainly between the Department for Transport and the Treasury at both official and ministerial level. The Government remain entirely committed to HS2, which is part of the rebalancing of our national network. We need capacity on the network, and HS2 will deliver it.
I am not the Minister with responsibility for HS2, so the day-to-day correspondence does not come across my desk, but the Government are entirely committed to HS2. The Treasury is right to say that we will look at projects to ensure that they come in on budget and on time, and that we do not see project-creep in terms of cost. The Treasury has been sighted, for example, on the way we are re-planning our investment process to ensure that decisions are made in as informed a way as possible so that there are as few surprises as possible.
Let me be absolutely clear to everybody that HS2 is a critically important project. Work is already under way to deliver it. The hon. Gentleman made the point that the appetite for it grows the further north one goes, and I am happy to echo that entirely. HS2 presents fantastic regeneration opportunities, about which I have had conversations with Judith Blake in Leeds, Andy Burnham in Manchester and Andy Street in the West Midlands.
The hon. Gentleman also highlighted the industrial relations issues that blight some parts of our rail network. The Government are keen to see a second person on trains. Indeed, we have said that there will be no blockage from the Government if that is what everybody wants. We can make changes to any agreements. Indeed, we have gone further than that and said that we will provide financial support. I have made those comments to the unions and the company. The dispute is between those two parties, but the Government can play a role in creating an environment to help them get around the table and talk, and I think I have done that. I want to see them get around the table and talk and, as they do so, stop the strikes, which have had a detrimental impact on the economy of the north.
I have not yet addressed the comments by the hon. Member for Inverclyde (Ronnie Cowan) about devolution to Scotland. Rail is devolved to Scotland. The Scottish Government set their own high-level output specification. The statement of funds available is above the Barnett formula for CP6. Off the top of my head, having discussed Scottish rail issues with colleagues in the Adjournment debate on Monday night—that was very late, so I understand that not everyone will have been present—I think it is £4.85 billion. There is significant funding available for the Scottish rail network, and the Scottish Government have control over rail.
This is not just about funding; it is also about control and management. When ScotRail is run by the Scottish Government and Network Rail is run by the UK Government, that can obviously fall between two stools. That is what we seek to address. We want the responsibility to go with the railway.
I just point out that decisions about what happens are taken north of the border. We have a national rail network, which cuts across all the nations of the United Kingdom, but decisions are made north of the border. I have had conversations with the Scottish Transport Minister, and I fully understand where his responsibilities start and mine finish.
We have accepted many of the Transport Committee’s recommendations, and I hope I have made it clear that our new approach through the RNEP is clear, logical and fair, and makes sense. We want that approach to lead to better outcomes for passengers, certainty for the supply chain and the industry, and a much more balanced portfolio of investment. I know that colleagues are hungry for investment. We are catching up on decades of under-investment in our rail network and other modes of transport by Governments of all colours. It is clear that we all agree that rail plays a huge role in our national economy, and that is why we are investing in it at record levels. I look forward to keeping the House and the Committee updated on our progress.
We have had an excellent debate. I thank all those who took part, including my Select Committee colleagues and Members from across the House. I particularly thank the Minister for his willingness to engage so constructively. He can be in no doubt about the strength of feeling across the country—from Essex to Yorkshire, Lancashire, Cambridgeshire and Sussex—about the need for rail investment to be shared more fairly. Members, their constituents and businesses want to hear not only that the Government are listening, but that they will respond. Of course, this is not only about fairness. Failure properly to invest will hold our country and its people back. Effective rail networks and transport networks in general are key to tackling poor productivity.
I am pleased that the Minister has received the rail industry’s decarbonisation report, even if it is only a draft. I look forward very much to hearing what it says and what the Government intend to do in response. I hope he listened to the concerns a number of us raised about the transpennine route upgrade. It is important that the Government deliver on the promise of a wholly electrified line, which would benefit passengers, freight, the economy and the environment.
I welcome the Minister’s comments about the transparency of the enhancements pipeline. We look forward to receiving from the Department more information about which schemes are progressing through the pipeline and further details of the market-led proposals that are in development, which have the potential to improve our rail network and provide much-wanted work for rail companies up and down the country. Of course, enhancement work tends to be quite different from day-to-day maintenance and renewal.
We are in agreement about the level of investment that is going into our network, whether through the money committed in CP6 or through some of the major projects, including HS2. On that we can agree, but I have no doubt that the Committee will continue to scrutinise the work of the Department, to make sure that the investment goes in and to ensure that when new services are developed to benefit from that investment, they are delivered effectively. That has not been the case in the previous year. We all regret the problems with the delivery of the new timetable. There has to be learning from that and we have to move on, particularly so that passengers feel the benefits that they know they have been paying for, for some time. We look forward to future debates, in Westminster Hall and on the Floor of the House, on this matter.
Question put and agreed to.
That this House has considered the Fourth Report of the Transport Committee, Rail infrastructure investment, HC 582, and the Government response, HC 1557.