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Transport for the North: Funding

Volume 691: debated on Wednesday 17 March 2021

Motion made, and Question proposed, That this House do now adjourn.—(Leo Docherty.)

I thank Mr Speaker for granting this debate this evening. I sought it after the Prime Minister’s response to me in the House at Prime Minister’s Question Time on 24 February, when I asked him:

“Is the 40% cut to Transport for the North’s budget part of the Prime Minister’s plans for levelling up the north?”

He responded:

“There has been no such cut, and we intend to invest massively in Northern Powerhouse Rail, and in railways in the north and across the entire country.”—[Official Report, 24 February 2021; Vol. 689, c. 911.]

That statement was simply incorrect, and I therefore welcome the opportunity this evening to set out the facts.

As background, in April 2018, Transport for the North became England’s first statutory sub-national transport body. Its role was to provide strategic advice on road and rail investment, helping to shape projects, although decisions are still made ultimately in London; to co-manage the north’s rail franchises through the Rail North partnership; to co-client large-scale projects, such as Northern Powerhouse Rail, and to develop and implement an integrated and smart travel ticketing project across the north.

On 4 January this year, Transport for the North received a funding letter from the Department for Transport. This letter was not good news. First, it stated that Transport for the North’s core funding allocation for 2021-22 would be £6 million, a £4 million reduction on the current allocation of £10 million. That was the basis of my question to the Prime Minister. Secondly, in that letter, £33 million of funding for integrated and smart travel, a London-style Oyster card for the north, was also cut by the Government, delaying the roll-out of contactless technology in the north.

Why do these cuts to core funding matter? Throughout the early discussions about what Transport for the North was supposed to do, the point was made repeatedly that it would be a strategic body, responsible for setting priorities for the region. That is precisely what the core funding is meant to support. For an organisation at this stage of its life even to keep the same level of funding would be seen as a cut, but with a 40% cut to its core funding, the Government are undermining the original aspirations for TfN. At the most recent Transport questions, the Minister—I am glad that he has joined us on the Treasury Bench—keenly pointed out that Transport for the North had been set up under a Conservative Government. Why are the Government now clipping its wings just as it is getting ready to fly?

Aside from the cut to TfN’s core funding and the smart ticketing project, the lack of any Government commitment to work with the organisation on the development of its northern transport charter, which will determine the organisation’s future role, including its own allocated pot of funding, is worrying. Together with the cuts to funding, it raises serious doubt about this Government’s commitment to the north, to devolving real power and to genuinely levelling up. My clear question to the Minister tonight is, has Transport for the North’s core funding been cut—yes or no?

Since my exchange with the Prime Minister on 24 February, I have written to him twice, on 25 February and 11 March, to request that he corrects his statement. He has yet to do so, and I have received no substantive reply to my letters. I have also tabled written parliamentary questions asking when he will reply to my letters and have been told that it will be “in due course”. I tabled other written parliamentary questions just today, asking again when I will get the courtesy of a response. I also raised a point of order on 25 February; following the courtesies of the House, I informed the Prime Minister that I was doing so. With the matter still unresolved, I was advised to apply for this Adjournment debate, which was kindly granted by Mr Speaker. This is the very first time in 16 years as a Member of Parliament—having been in the House with five different Prime Ministers—that I have needed to take such a prolonged course of action to try to correct the record.

It now appears that the Prime Minister has on two other occasions in recent weeks made statements in the House that are inadvertently misleading and then failed, or refused, to correct the record. On 22 February, it was over personal protective equipment contracts being on the record. On 10 March, it was the incorrect claim that Labour had voted against a nurses’ pay rise.

Mr Speaker made a clear statement to the House on 11 March. He said:

“All Members should correct the record if they make an inaccurate statement to the House. They can do so by raising a point of order or in debate, or, in the case of Ministers, they can make a statement or issue a written ministerial statement. The Government’s own ministerial code could not be clearer about what is expected of Ministers. It says:

‘It is of paramount importance that Ministers give accurate and truthful information to Parliament, correcting any inadvertent error at the earliest opportunity’.

The Speaker cannot be dragged into arguments about whether a statement is inaccurate or not. This is a matter of political debate. All Members of this House are honourable. They must take responsibility for correcting the record if a mistake has been made. It is not dishonourable to make a mistake, but to seek to avoid admitting one is a different matter.”—[Official Report, 11 March 2021; Vol. 690, c. 1001.]

Further to the passage quoted by Mr Speaker, paragraph 1.3 c. of the ministerial code goes on to say:

“Ministers who knowingly mislead Parliament will be expected to offer their resignation to the Prime Minister”.

The fact that the Prime Minister is responsible for enforcement of the ministerial code raises the question of what happens when the Prime Minister may be in breach of the ministerial code and the issue of the accountability of that Prime Minister. We all know the culture of institutions that investigate themselves and usually conclude, “There’s nothing to see here”; it is one that we have seen many times in recent decades. We saw it over Hillsborough, with what the Right Rev. James Jones called the

“patronising disposition of unaccountable power”,

and I have encountered the same problem in campaigning for an independent public inquiry into the NHS infected blood scandal.

The Prime Minister’s cavalier attitude in inadvertently misleading the House and then not correcting the record reflects his strained relationship with his wide-ranging brief as Prime Minister and his attitude to accountability. This does not just disrespect Members of this House; I think it shows contempt for constituents, who send us here. It is a worrying shift to the “alternative facts” culture that we saw in the Trump White House, and is unhealthy for a modern democracy. In the case of Transport for the North, it is the road, bus and rail users in northern England to whom promises have been made who are most disadvantaged if and when there is no accountability for broken promises, moved goalposts or factual inaccuracies.

Let me turn to why what the Prime Minister says about transport investment in the north matters so much to me as a Hull MP. My constituents in Hull North face the daily reality of poor transport links and infrastructure in the north, especially east of Leeds, and the long-standing disparity during the years of the northern powerhouse, as yet unaddressed, between levels of public and private investment in the south-east and the rest of the country. On transport especially, Hull people get a poor deal as fare payers and as taxpayers.

By the time the northern powerhouse was launched in 2014, there appeared to be a growing acceptance of the need to rebalance the economy in several ways, including over investment in transport and other creaking infrastructure across northern England. “Rebalancing the economy” has now become “levelling up the north” in the everyday terminology used, but it means the same, and this broad political consensus is that levelling up the north is not just vital for the north, but would also be a win-win for the wider UK economy. It would boost the north’s productivity, general economic activity and the north’s contribution to GDP growth. It would also take pressure off the congested, overheated infrastructure of the south-east, with the economic inefficiency and constrained productivity and growth that that spawns.

We know that in the digital age, not so much economic activity needs to cluster in the south-east, a point proven again during the covid crisis. More employees can work from home than before, and not so many homes and workplaces need to be in or around the M25. However, levelling up is only meaningful when we start to see action on the ground—physical evidence that transport schemes are under way in this decade, far beyond just the moving of transport civil servants to Leeds, as announced in recent days.

So what has been happening in Hull in terms of transport investment? The first significant development after the launch of the northern powerhouse was, sadly, Tory Ministers in November 2016 blocking Hull’s privately financed scheme to electrify the rail lines into Hull. In recent years, Hull has seen a downgrading of our rail services, even in relation to towns like Scarborough, which, unlike Hull, now enjoys a direct rail link to Manchester airport. The city of Hull currently faces a further downgrading of cross-Pennine rail services and even slower services. Certainly, it has been my suspicion that we will see commercial space travel before we get the high-speed electrified rail line between Hull and Liverpool that the Hull and Humber chamber of commerce and many others have long pressed for. Delivering on the previous promises of a high-speed northern rail powerhouse, Crossrail for the north or HS3—it has been called all those things in recent years—is a minimum requirement if Ministers are serious about levelling up: a fully electrified rail line between Hull and Liverpool.

East-west connectivity across the north is as important as the north-south link to London. Just a few spur links to HS2, especially the cut-down version that would be more distant from the Humber sub-region, do not amount to levelling up the north. Transport for the North research shows that Northern Powerhouse Rail, once delivered, would contribute £14.4 billion in annual gross value added to the UK economy and create up to 74,000 new jobs in the north by 2060. With the challenges of Brexit and “building back better” after covid, this economic boost is now perhaps even more important for the whole country, not just the north, than was the case a few years ago. As just one example, the boost it could give to the steel industry alone is vital for places like Scunthorpe. The importance of boosting capacity for passengers and freight across the north is only underlined by the new freeport status of both the Humber and Liverpool.

A few years ago, it was estimated that the north needed £100 billion-worth of investment to catch up with London and the south-east. Before the 2019 general election, that scale of investment was promised by the Prime Minister within a five-year Parliament. So far, that level of transport investment remains a promise. Funding for the Northern Powerhouse Rail project appears to remain at the level provided for 2020-21, but the fact that Transport for the North was told by Whitehall to delay submission of its business plan until after the Government’s integrated rail plan, itself delayed yet again, shows again that Transport for the North does not have the devolved powers and clout that, for example, Transport for London enjoys. The Department for Transport still controls funding for Northern Powerhouse Rail. Although a statutory body, Transport for the North is only an advisory body—Whitehall still decides. This is why we want straight talking from the Prime Minister, just as we are famed for in Yorkshire.

In Hull, we have worked hard through the austerity decade to make our own luck, with Siemens and the energy estuary, a growing tech sector, city of culture status and exciting projects like the Hull lagoon and Maritime Hull. However, when it comes to transport investment, we are tired of being promised jam tomorrow, but having jams today. We have had advances such as cutting the Humber bridge tolls and the Mary Murdoch connection across the A63, and we are finally seeing Pacer trains gone, although we still have the polluting diesel rolling stock. But every step forward has been hard won, usually delayed for years and tiny in scale compared with the investment we see elsewhere in the country, especially in Greater London. Meanwhile, Hull Trains, the open access rail operator that has provided Hull’s main direct rail link to London—a service built up successfully over the past 20 years to meet demand, amid all the franchise and infrastructure problems on the east coast main line—has not received any of the Government support that others in the rail industry have had during the covid crisis.

Other levelling-up funding streams, from the new towns fund to the levelling-up fund and the community renewal fund, do not point to a scale of investment that will be transformational even for the most favoured areas, and certainly not on the scale that London docklands has enjoyed since the 1980s or that London and the south-east have seen—including, among many examples, the £19 billion spent on Crossrail over the last 12 years of construction. If levelling up is to mean anything, it must be a whole-north approach, and the funding, the city deals and the devolution must be instruments for economic regeneration in the national interest, not for political gerrymandering.

In conclusion, I hope that I have shown why statements made by the Prime Minister about transport in the north matter to people who live in Hull and should matter to people across the whole United Kingdom. We need improvements to start happening visibly in the 2020s, rather than just hearing more about the Prime Minister’s latest fantasy project, such as a bridge or tunnel to Northern Ireland.

When I am in London, I frequently pass the £500 million shiny new Crossrail station at Canary Wharf, built with private investment and complete with its own lush roof garden. The site is surrounded by all the other fruits of 40 years of ongoing London docklands regeneration work from both public and private investment. There cannot be a greater contrast than with my own battle over the past three years to get the botched, on-the-cheap waiting room and toilet improvements at Hull’s Paragon station, managed by TransPennine, which unfortunately seems not to even be able to sort that out. If we really are to be one nation, levelled up and facing the future, those two symbolic locations must stop being such a tale of two cities. That is why Transport for the North needs to be properly funded.

Let me start by saying that delivering high-quality, world-class transport infrastructure in northern England and following through on our commitments to level up remain a top priority for the Government. Transport for the North shares that ambition, and I am surprised and disappointed that its latest funding settlement has provoked such a great deal of consternation. Let me assure Members across the House that Transport for the North’s funding settlement is appropriate and fair and enables it to continue to carry out its statutory functions, which is what it was established to do. Given the level of scrutiny that its funding settlement has received, I think it would be helpful if I laid out all the facts here today, so that we can finally move on and focus on what is really important to people in the north: delivering for the north.

I am surprised that the Minister did not pay the usual courtesies at the beginning of his speech, but I will leave that to one side. I want to ask again the question that I posed in my speech: can the Minister confirm whether the budget for Transport for the North, which was £10 million, has now been reduced to £6 million—yes or no?

No. I will now continue, and as the right hon. Lady did not observe the usual courtesy of only taking 15 minutes, I will not take any further interventions.

On a point of order, Madam Deputy Speaker. I am rather annoyed by that comment, as I was in the Chamber waiting to be called to speak, and the Minister did not even have the courtesy to be on the Front Bench when the debate started.

That is not really a point of order, but it is up to the Member who has the Adjournment debate to take a reasonable amount of time, and I have to say that I have seen Adjournment debates in which the Member in charge has taken considerably longer than the right hon. Lady. I think the Minister does have adequate time to reply.

I will always defer to your guidance, Madam Deputy Speaker. For the record, I was waiting behind the Speaker’s Chair for at least five minutes, but there was a Minister at the Dispatch Box and, due to social distancing, it would have been inappropriate for me to come into the Chamber and on to the Front Bench while the previous Minister was here.

At Prime Minister’s questions on 24 February, the right hon. Lady said:

“Is the 40% cut to Transport for the North’s budget part of the Prime Minister’s plans for levelling up the north?”

In response, the Prime Minister said:

“There has been no such cut, and we intend to invest massively in Northern Powerhouse Rail, and in railways in the north and across the entire country.”—[Official Report, 24 February 2021; Vol. 689, c. 911.]

Transport for the North became a statutory body in April 2018. I was proud to serve as a Government Whip on the statutory instrument Committee that oversaw the process at the time.

Let us first look at the budget that has been available to Transport for the North since it was established. Transport for the North has had a core funding grant of £10 million per year since it was established as a statutory body. That settlement has been used to support core operations, as well as to underpin Transport for the North’s medium-term financial strategy through the maintenance of reserves. The Department and Transport for the North have agreed a minimum reserve of £2 million.

However, this financial year, partly as a consequence of the coronavirus pandemic, Transport for the North underspent its core grant and built up significant reserves. According to its own forecast, its reserves would have grown to an excessive £9.5 million if its funding had remained unchanged this year. Ministers therefore took the decision to adjust Transport for the North’s core settlement this year, allocating £7 million for the current financial year and £6 million for the next. That is a prudent and sensible use of taxpayers’ money that ensures that Transport for the North still has enough to continue to deliver on its statutory functions while making sure that it does not continue to build up unnecessarily large reserves.

To come to the crux of the argument, it is important to note that the core funding grant is just one of several funding streams that make up Transport for the North’s budget. During 2018-19—its first financial year as a statutory body—some £388,000 was available for the Rail North partnership grant. That has risen year on year, with £680,000 available this financial year and a further rise to more than £750,000 anticipated for the next financial.

Likewise, when Transport for the North was established as a statutory body, £15 million was made available for Northern Powerhouse Rail in 2018-19. Again, that amount has risen year on year, with £59 million available this year, rising to £67 million in the next financial year, subject to the usual agreement of programme activity with the Department, as co-client.

In the 2015 spending review, Transport for the North was allocated up to £150 million to support its integrated and smart travel programme. It has utilised only £24 million in the past five years to enable the roll-out of smart ticketing throughout the north. Additionally, it incurred development, business-case and other project costs of around £10 million, but was unable to produce a business case for its ambitious multi-modal projects that was acceptable to all transport operators in the north.

The multi-year funding for Transport for the North’s integrated and smart travel programme was always due to expire at the end of this financial year. We are considering how best to deliver more effectively the roll-out of smart ticketing to improve passenger services throughout the region.

What all that amounts to is that the Prime Minister was right in his assertion that there has been “no such cut”. Taking into account all the funding streams available to Transport for the North, its budget has not been reduced by 40%. To that end, impartial website Fullfact published a piece on 3 March, in reference to the 40% reduction quoted by the right hon. Lady. It stated:

“This much is being removed from Transport for the North’s core funding, though not from its total funding. It will be able to access some extra funding from other programmes to supplement its core funding.”

I am happy to provide even more clarity on those figures. First, the 40% reduction in Transport for the North’s core funding will not take place until the next financial year. Secondly, looking at its core funding for 2021-22, the Department has agreed that Transport for the North can charge £2.5 million of the costs that previously came from its core budget to the Northern Powerhouse Rail programme, significantly reducing the impact of the reduction in its core expenditure.

The right hon Lady again asked the Prime Minister, in a written question on 1 March, about Transport for the North’s funding settlement, and the Prime Minister responded promptly on 4 March that Transport for the North’s overall funding means that it will have access to over £70 million this coming financial year alone.

For the avoidance of doubt, let me quote what the Prime Minister said in response to the right hon. Lady:

“A reply will be sent in due course. Transport for the North’s overall funding means they will have access to over £70 million this coming financial year alone. We are building on the £29 billion we have invested in transport in the north since 2010 with: the Integrated Rail Plan bringing together HS2, Northern Powerhouse Rail, and our multi-billion-pound rail investment programme; our £5 billion investment into local bus and cycle links, including in the North; our £4.8 billion Levelling Up Fund which will benefit communities across the region; and our £4.2 billion intra-city transport fund, benefitting bus, train, and tram services across our 8 largest city regions. And at Budget, we reaffirmed our commitment to northern infrastructure, with: the launch of the UK Infrastructure Bank, headquartered in Leeds; a new government economic campus in Darlington; investment in offshore wind port infrastructure in Teesside and Humberside; and over £450 million in Towns Fund Deals for towns across the north—investing in infrastructure and culture from Middlesbrough to Bolton, to Rochdale and Scunthorpe.”

I think that more than clarifies and settles the matter of the adjustments to Transport for the North’s funding. The settlement is fair, reasonable and appropriate, and indeed Transport for the North will continue to receive more funding than any other sub-national transport body.

Lately, the subject of Transport for the North’s funding has too often been conflated with investment in northern transport and the Government’s commitment to levelling up more generally, and again I would like to set the record straight. To be clear, Transport for the North is not, and has never been, a delivery body. It is a strategic body, there to provide advice to the Government—something that it is perfectly able to do within its current funding settlement. Therefore, a reduction in Transport for the North’s core funding will not impact on the delivery of the vital infrastructure projects that the north needs. The Government are wholly committed to levelling up all parts of the country, including the north. Therefore, £29 billion has been invested across the north since 2010. There is still a long way to go, but we are on the right track.

I do not have time tonight to list the many schemes and investments that we are progressing across the north, but I will mention a few. The dualling of the A66 has seen its construction time scale halved by the Government’s Project Speed. The planned reopening of the Northumberland line to passenger services will better connect our communities in the north-east. We are embracing our ambition of a zero-carbon future with a planned hydrogen transport hub in the Tees Valley.

Last July, my right hon. Friend the Secretary of State announced an initial £589 million, with more to follow, for the trans-Pennine route upgrade, delivering much-needed rail capacity and reliability between Leeds and Manchester. In addition, I am pleased that the right hon. Lady shares my joy at the new freeport being established on the Humber, alongside two other sites in the north, at Liverpool and Teesside. Furthermore, I am surprised she did not mention that the work on the improvement scheme for the A63 Castle Street in Hull is under way. She mentioned the incredibly beautiful bridge, to which many of her colleagues have paid tribute—the Murdoch’s Connection bridge—that is providing safe and convenient crossings for pedestrians and cyclists. The very fact that we are getting on with these schemes underlines our commitment to levelling up.

I could go on, but the point is that changing Transport for the North’s core funding settlement does not alter the Government’s commitment to the north or to levelling up. Our ambition is to deliver world-class infrastructure in the region and unlock the potential of the northern powerhouse. Opposition Members will continue, I am sure, to play games and try to score points, but this Government will not be distracted from building back better and delivering record investment to the region.

Question put and agreed to.

House adjourned.