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Railways: Passenger Demand

Volume 703: debated on Tuesday 1 July 2008

asked Her Majesty’s Government:

Whether they intend to review the Passenger Demand Forecasting Handbook, in the light of increases in demand for rail services.

My Lords, responsibility for maintaining the Passenger Demand Forecasting Handbook lies with the Passenger Demand Forecasting Council, of which the Department for Transport is a member. A major update of the handbook is currently being undertaken and we are working collaboratively with the forecasting council to ensure that relevant findings from government-led research are captured within the revised draft.

My Lords, I thank the Minister for that reply. The Passenger Demand Forecasting Handbook, which is the basis on which railway investments are made, was developed 20 or 30 years ago when the railways were in decline. It takes no account of oil shortages, rising congestion, pollution or climate change. Will the Minister assure the House that all these factors will be properly evaluated and taken into consideration?

My Lords, I do not entirely agree with the noble Lord’s description of what the handbook takes into account. It is a rather large document—650 pages, when I looked at it—and something of a holy grail for the rail industry’s investment plans. We are currently embarked on a review to update the handbook so that it provides the most up-to-date and timely information for forecasting passenger growth. Such variations as there have been in recent times tend to work themselves out over a three or four-year cycle. The handbook is in good order for the task for which it has been designed.

My Lords, will my noble friend confirm that at least one train operator has recorded a 16 per cent increase in passenger numbers in the past six months? The evidence is that that is because of the high price of oil and people are turning from road to rail. Given that the Government’s forecasts of passenger traffic are still based on $57 a barrel for oil and it is now over $140, is it not time that the new forecasts took into account the much higher price of oil that most people believe is likely to be with us for a long time?

My Lords, the noble Lord makes a timely point but I think that the general industry view is that it is too soon to know whether higher fuel prices will encourage people to switch from road to rail. There is no real evidence so far. Road and rail journeys are not perfect substitutes and, in view of how commuter traffic works, individuals discouraged from driving their cars may not necessarily make the equivalent journey shift to rail. I recognise in part the statistics to which the noble Lord refers, but the latest quarterly edition of National Rail Trends reported a 4.4 per cent increase in passenger kilometres and a 4.8 per cent increase in passenger journeys this quarter compared with 2006-07.

My Lords, passenger rail usage is clearly linked to price. On regulated services the price of tickets will rise automatically with inflation, but incomes will not. Is this desirable or undesirable?

My Lords, fare elasticity clearly has a bearing on these things, but we have had a policy of ensuring that regulated fares increase over time by RPI plus 1 per cent. Some 50 per cent of fares on the networks are regulated and some 80 per cent are either regulated or discounted. That may account for the fact that in the past 10 years we have had a 40 per cent increase in the number of passengers travelling on the network and we project a further 30 per cent growth in the next 10 years. I would argue that that is a success story.

My Lords, given the very encouraging figures that my noble friend is giving for future demand for rail travel, will the Government give every support to Network Rail in its plans to build new high-speed lines to the north and also its proposals for electrification of more of the network?

My Lords, the noble Lord is obviously referring to recent comments by the Secretary of State about high speed. We are working with Network Rail to examine options for further growth in the longer term. That might include the new high-speed lines to which the noble Lord referred and also the capacity for increased electrification.

My Lords, on these Benches we are deeply concerned that the change in circumstances affects the forecasting. For instance, the new railway station at Alloa in Scotland was forecast to have 12,000 passengers a month but the figure in the first month was actually 35,000. The forecast seemed to be totally awry. What are the Government going to do about this?

My Lords, I will feed the noble Lord’s up-to-date information into our forecasts to make sure that they are timely and accurate. Apart from that, we keep a careful account of the projected increases, and the figures I gave earlier are a clear indication of our confidence in the projections to date. Of course we have to have flexibility. That is why we announced last year a £10 billion expenditure increase to take account of the capacity demands that we expect to see until 2014.

My Lords, the noble Lord has already half answered my question. What processes are triggered when the handbook predicts traffic growth in excess of the capacity of the line to which it is applied?

My Lords, the Government have to take account of these things and one of the reasons why we have had a successful rail strategy in the past few years is that we have anticipated some of that growth. We are delighted that more people are using the rail network now than at any time since 1946 and that the numbers are rising every year. We are planning for that growth and investing in new capacity and the public are clearly responding. They are increasingly using the rail network and see it as a safe, comfortable and environmentally friendly way of travelling about our great nation.

My Lords, have not the biggest increases in rail traffic in recent years occurred where services have increased, new rolling stock has been provided and there are more and better trains? In that respect, does the Minister understand that it will not increase so much on dead-end lines with dead-end services such as that between Preston and Colne in east Lancashire? In particular, do the Government support the reinstatement of the Todmorden curve to allow fast services from Burnley to Manchester?

My Lords, the noble Lord has an enviable record in making that case and I congratulate him. We are neither for nor against the reopening of lines. If an effective business case for particular lines can be made and supported and it is economical then there is a good case to reopen them. As he knows, I have my own sympathies in that direction. However, we have to marry that with the demands for increased capacity on the network as a whole. His point about increasing the quality of rolling stock is extremely good, as it will make using the trains a much more attractive option.