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Railways: Investment

Volume 707: debated on Thursday 12 February 2009

Statement

My Lords, with permission, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Transport on investment in new trains.

“With permission, Mr Speaker, I would like to make a Statement about new investment in our rail network.

The House will understand that, because of the significant and sensitive commercial nature of this announcement, it was necessary to make the information available to the markets in advance of informing the House.

Britain's rail network has been a remarkable success story over the past 10 years. There are more passengers using our trains than at any time since the Second World War—over a billion last year. We have taken decisive action to remedy the failings of privatisation and put in place a stable structure for the long term. We have delivered, to time and on budget, the United Kingdom's first high-speed railway line and, as I announced to the House last month, we have set up a new company, High Speed 2, which has already started work on planning for new high-speed rail services to the West Midlands, the north of England and Scotland.

In order to ensure that our railways remain resilient during the economic downturn and are well placed to support future economic growth, I am determined that we take the necessary steps now to invest in this critical part of Britain's infrastructure.

Our priority is to deal with overcrowding and to increase capacity to meet future demand. That is why we are investing over £20 billion in enhanced rail capacity and new and improved trains to accommodate these record passenger numbers.

Britain's £5.8 billion first high-speed line is now open, and from December this year commuters will be able to use high-speed rail services between London and Kent. Work has already started on the £16 billion Crossrail project, which will link Docklands, the City, the West End and Heathrow. We are upgrading the Thameslink service, bringing more frequent and longer trains to commuters on this critical route. Passengers on the west coast main line are now starting to see the benefits of an £8.8 billion upgrade, which has reduced journey times and delivered more frequent services.

I would like to inform the House today of what we are doing to invest in the next generation of long-distance trains and to make the United Kingdom a centre of excellence for European rail manufacturing.

This morning, I announced to the London Stock Exchange that a British-led consortium of John Laing, Hitachi and Barclays has been chosen as the preferred bidder for the contract to re-equip the east coast and Great Western main lines with new express trains. The high-speed trains that operate on these routes are up to 30 years old. While they have served passengers well, they now need to be replaced by more reliable, more efficient and greener trains which can carry more passengers. They will have longer coaches, allowing up to 20 per cent more seats on each train. Faster acceleration will allow journey times between London and major centres to be cut significantly, so a train leaving London will arrive in Leeds or Bristol 10 minutes sooner, Edinburgh 12 minutes sooner and Cardiff 15 minutes sooner.

Faster journey times mean that more frequent trains can be fitted on to the network, and improved reliability will mean that passengers face less disruption to their journeys. Moreover, the new trains will be up to 17 per cent lighter than their existing counterparts, increasing fuel efficiency. Modern braking systems will further drive down energy consumption.

This contract, worth some £7.5 billion, is the biggest single investment in intercity trains in a generation. It involves the construction and maintenance of up to 1,400 new vehicles. The first of these new trains will enter service in 2013 and, over the following years, they will provide high-quality journeys to passengers between London and destinations across the United Kingdom, including Leeds, Newcastle, Edinburgh, Cambridge, Bristol, the Thames Valley and south Wales.

The trains will also be able to run on both electrified and non-electrified lines. This means that through trains will be able to run from the electrified to the nonelectrified parts of the network. That is why I have announced, in parallel to the introduction of these trains, that we are developing plans for the electrification of the Great Western and Midland main lines. This will allow us to deliver the widest possible range of high-quality services for passengers.

This announcement is good news for UK jobs, as well as good news for rail passengers. As part of the contract, the winning consortium has agreed to make a significant inward investment into the United Kingdom in order to construct a new state-of-the-art train assembly and manufacturing facility. I expect that nearly three-quarters of the value of this order will be spent in the UK, benefiting the UK economy and providing UK jobs.

The exact location of the new factory remains subject to further negotiation by the company, but it has confirmed to me that it will be in the east Midlands, Yorkshire or the north-east. In addition, new maintenance depots will be built at Bristol, Reading, Doncaster, Leeds and in west London, with upgrades to existing depots throughout Great Britain. This means that new manufacturing jobs will be created and maintained in these regions, and many more jobs will be safeguarded across the country in the supply chain.

In all, I estimate that in the order of 12,500 long-term jobs will be created or safeguarded as a result of this announcement today.

As honourable and right honourable Members will be aware, Japan is one of the most advanced nations in the world in high-speed rail and new rail technology. Its trains have extraordinarily high levels of reliability and speed. Meanwhile, the rail industry is expanding right across Europe, with countries such as France, the Netherlands, Germany and Italy investing in high-speed rail and new train fleets, as well as significant new opportunities in the countries of central and eastern Europe.

By bringing together UK and Japanese technology, design and manufacturing capability, we will give the UK a still stronger bridgehead into the fast-developing European and international rail markets in the same way as the entrance of Toyota, Honda and Nissan into the UK have done with the automotive industry. This will mean that the UK continues to develop as a centre of excellence in train manufacturing, enabling the country to become a key player as what was once a domestic rail industry now becomes increasingly an international one.

The Government's investment in the UK rail industry means that, in addition to this announcement, orders for a further 2,200 train carriages worth over £2.5 billion are already confirmed or in the pipeline. Today, I can confirm as well that the department is in advanced discussions with National Express East Anglia to provide 120 new carriages to renew and expand the train fleet operating on the West Anglia route between Liverpool Street and Stansted Airport. The preferred bidder for these trains is Bombardier Transportation UK Ltd, which plans to assemble these new carriages in Derby, safeguarding jobs there.

A further order worth £400 million—as part of the fiscal stimulus package announced by my right honourable friend the Chancellor of the Exchequer—will be awarded shortly. Once again, Bombardier is well placed to win this order. There is another £2 billion order for 1,200 carriages for Thameslink, for which a preferred bidder will be announced later in the year.

These orders demonstrate that this Government are prepared to invest, even in difficult economic times, in improving our national infrastructure.

This announcement is real good news: good news to workers that up to 12,500 jobs will be created and safeguarded; good news for the economy that we are putting the UK back at the forefront of international manufacturing industry; good news for the regions that the Government are supporting significant inward investment; and good news for passengers that we are taking the steps necessary to improve their rail journeys”.

I commend this Statement to the House.

My Lords, I am grateful to the Minister for repeating the Secretary of State's Statement in response to yesterday's announcement of our rail review by my honourable friend Theresa Villiers. We welcome the announcement of new investment but I have a few points to make and some pertinent questions.

The third paragraph of the Statement excited me somewhat. The remarkable success of the UK rail industry did not start in 1997; it started after privatisation in 1994. The Statement says:

“We have taken decisive action to remedy the failings of privatisation and put in place a stable structure”.

I accept that privatisation was difficult, and the initial solution was never going to be perfect, but it worked. Why else was there the success that the noble Lord's Statement refers to? However, the only strategic action by the Government that I can recall was to create the Strategic Rail Authority and then abolish it within three years.

The Statement rightly referred to the CTRL, now known as HS 1. The CTRL was announced in this House by, I think, my noble friend Lord Caithness, so it was started and planned by a Conservative Government.

The Statement refers to £20 billion of investment. That is very welcome, but can the Minister provide a spreadsheet to all noble Lords taking part, together with a copy for the Library, so that we all know how that £20 billion is made up?

The Statement indicates that faster journey times mean that more frequent trains can be fitted on to the network, resulting in more capacity. That must be correct but is it not true that the biggest problem is signalling constraints and the unreliability of the signalling system? What can be done to improve that?

We really need to know what we are talking about with the IEP. Apparently, these are lightweight, high-capacity, dual-powered trains of high efficiency. Indeed, I understand from the industry that the IEP has been “specced” to within an inch of its life by the DfT, no doubt with the benefit of large numbers of external consultants. I also understand that this new stock will be very similar to the Javelin trains now being tested for the HS 1. Presumably the diesel engines, generators, motors, the highly sophisticated control gear and the bogies will all come from Japan. Then the new UK factory will build the carriage body and fit the important major components to it. This build process is key to our correct understanding of the Statement. If my assumptions are wrong I am sure that the Minister will correct me because he would not want the House to be misled.

There is some concern about the future of the Bombardier works. What are its prospects? He mentioned a small order, but what is the long-term viability of the Bombardier works? There is confusion about how much rolling stock is on order, particularly the 1,300 carriages that we keep hearing about. Will the Minister be able to provide all noble Lords and, again, the Library with a comprehensive spreadsheet showing what is planned to be on order with Treasury approval, what is on order and what has recently been delivered? All noble Lords would find that very helpful. I hope that I have left plenty of meat on this bone for other noble Lords to pick on, and I look forward to the Minister's reply.

My Lords, the noble Lord did so in a very mealy-mouthed fashion, if I may say so. This is the sort of sensible, countercyclical investment that we want. I am not saying that any investment is good, but if you are investing in long-term assets for the future of the country, we all hope that these will be put to full use in the future. I am also grateful for the announcement about the other train orders, which I understand are still in the pipeline and will secure the future of the Bombardier works which, together with the work it has from London Underground, should see it well suited for the future.

It is slightly dangerous to say that this will make us the centre of European rail excellence because there are such huge differences between the type of trains we can use here and those that are used on the continent. But I am not saying that we cannot find other markets for the products that we buy.

I noted in paragraph 10 of the Statement that the east coast and the great western main lines will be re-equipped. I wonder what the Midland main line will be equipped with if, as expected, the electrification of that line is announced. Are the trains from the east coast going there? What will happen? With reference to the high speed trains being up to 30 years old, it was coincidental that I asked the Minister yesterday in a Written Question whether consideration had been given to further use of these trains that are among the most popular in the railways in Britain, certainly since the war.

I thought that the time savings in paragraph 12 were very modest. If the Minister were to look back to a British Rail timetable of the mid-1980s, he would find that those time savings were there then. Since privatisation the timetable has been padded out for various reasons, and trains have been slowed down. I would hope to go even faster, which requires some proper strategic thinking about railway timetables, stopping patterns and maintaining high speed once it has been achieved. If trains keep stopping they use a lot of energy and lose a lot speed. Will the maximum speed of the new trains be 125 or 140 miles per hour? I assume that the trains will run on the existing signalling system, plus such modification as is made in the mean time.

In paragraph 16 I challenge the mention of bimodal trains. That should be at the back of the programme, as it were. If we are to electrify the Midland main line and the great western main line, there will be less and less use for a bimodal train. As far as I can tell there is nothing to prevent these new trains being hauled by a locomotive to the peripheral destinations, say Aberdeen or Penzance, although I imagine the people there do not like being described as being on the periphery.

I do not endorse the comments of the noble Earl, Lord Attlee, but now that the project is in the hands of Hitachi, Barclays and John Laing, will the department let the project go? I caution him against the fact that if you keep going back to alter a huge contract, the cost goes up and up. The contractors will take you to the cleaners.

I broadly welcome the Statement. I certainly welcome what was said about the other trains that are coming, and I am sure that almost everybody in the railway community will be very happy that such a large investment in addition to what has already been invested will be made available.

My Lords, I greatly welcome the remarks of the noble Lord, Lord Bradshaw. He speaks with all the authority of a former rail manager, and I know that his remarks will have a wide resonance outside the House. I note the remarks of the noble Earl, Lord Attlee. I am not sure that it is particularly fruitful to have a debate about the history of privatisation, but I simply note that he himself described it as “difficult”. I regard that as the understatement of the day in your Lordships’ House. It was not the issue of the regulation of the industry which was one of the biggest that we had to sort out. I accept that it took us some time to sort it out because, to use his phraseology, it was in a very “difficult” state when we inherited it. He did not mention the collapse of Railtrack and the privatisation of the track authority which was one of the major problems with privatisation that took us some years to overcome.

I shall move on rapidly to the area of consensus—sorry, before doing so I must immediately refer to Aberdeen and Penzance otherwise I will subject to great criticism by my noble friends who come from those areas. Let me say immediately that I do not regard them as peripheral. Her Majesty’s Government regard Aberdeen and Penzance as integral parts of the United Kingdom, and we believe that they deserve a first-rate intercity train service. We intend to see that they continue to receive one. Indeed, part of the virtue of the super express train is its bimodal capacity, which will allow it to run to destinations off the electrified network, providing a first-class service to those destinations.

It is not only Aberdeen and Penzance. With the most ambitious electrification programme we could carry through in the next 10 to 15 years a significant part of the great western main line that is well short of Penzance will still be non-electrified. It is not simply a question of the ultimate destinations. Diversionary routes are also important. The noble Lord, Lord Bradshaw, has probably forgotten more about the east coast main line than I will ever know, but some of the routes to that and the west coast main line are non-electrified. The resilience of the network suffers considerably. Passengers know only too well of the inconvenience of weekend trains being cancelled and replaced by buses because it is not possible for electric trains to run on the non-electrified parts of the network. The bimodal trains will make it possible for trains on diversionary routes to use the alternative diesel capacity. I hope that that will bring us a lot closer to the seven day a week totally reliable network, which the nation expects and which the super express train will make it easier to deliver.

I shall deal with a few of the specific points. The noble Earl rightly said that there are a number of big rail orders out at the moment. There are the high-level output specification orders intended to secure 1,300 additional carriages, the super-express trains that I have announced today and the forthcoming Thameslink order. I would be very happy to provide him and other noble Lords who are interested with a spreadsheet detailing the orders that are currently placed or forthcoming and the timeframe in which they will be delivered so that it is easier to understand the procurement process as it will take place over the next five years.

In due course, we would like to be able to introduce in-cab signalling, as already happens on high-speed trains and which would increase the potential for faster trains and greater capacity on the network, but it will be some years before that is possible. The noble Earl referred to the specification for the super-express trains and said that he thought that it was too bureaucratic. I should stress to the House that the specification was carried through in very close collaboration with the industry. I held press conferences today with the Association of Train Operating Companies and Network Rail to explain to the proposals to the media. They both strongly applauded the decisions that have been taken and stressed how involved they had been in the making of those decisions. It is absolutely right that we work in close partnership with the people who are going to be running the trains and with the network operator, and we have done so.

The noble Lord, Lord Bradshaw, mentioned Bombardier. It has forward orders to build in excess of 2,000 rail carriages between 2009 and 2014, and the Stansted order is in addition to that. As the noble Lord observed, there are a number of significant orders coming down the pipeline, of which the most significant by far is the Thameslink order, which is worth in excess of £2 billion. Bombardier is competing for that order.

In summary, this is a good news Statement for the rail industry, rail passengers and British jobs.

My Lords, the Minister has not responded to my question about the materials management process, the shipping of components from Japan to the UK.

My Lords, I apologise. Seventy per cent of the value of this contract will be spent in the United Kingdom, which will give the noble Earl an indication of how significant the UK contribution will be. It is difficult to go through all the parts of the process of procuring and maintaining because it is very complex. Manufacturing is not one single process and the process of supplying components is very complex. It will include UK suppliers of components and high-value work, not simply low-value assembly work. Part of the reason why we are entering this contract naming this consortium as our preferred bidder is that we want to take advantage of Japanese technology, which is of a very high order, in rail technology.

My Lords, that would be an oversimplification. Exactly what will be carried out where will not be clear until we have completed the process of negotiating contracts and the consortium is able to spell out its plans in greater detail.

My Lords, I cannot find any more adjectives than the noble Lord, Lord Bradshaw, warmly to welcome what has been said today and the personal commitment of my noble friend and our mutual friend the Secretary of State to the rail industry and the future of rail. Most noble Lords probably remember only too well the 1950s and 1960s when there was nothing but decline. Above all, this is a statement of confidence in the future of rail, and I welcome that as well as all the detail.

This is clearly about providing services, but it is also about providing jobs. That is warmly welcomed. The Minister mentioned 12,500 jobs. He will know that historically a lot of these jobs have been in the Midlands in places such as Crewe and Derby. The Statement refers to 12,500 jobs being created and safeguarded. Can the Minister tell the House what proportion of those jobs he anticipates will be new jobs? If he cannot answer that now, it would be nice to hear some details later. Can he give any indication of the timescale? He has told us when he expects the new services to be provided, but does he have any information about the timescale of when we might see these new jobs—he said that a proportion of them will be new jobs—becoming available?

I am grateful to my noble friend for his remarks. As he rightly said, this is sensible countercyclical investment and underlines our confidence in the future of rail and our commitment to the future of the rail industry as it goes through a period of, as we see it, continued growth. I cannot give my noble friend a precise breakdown of the new and safeguarded jobs because there is not one. A lot of the suppliers in the rail industry are existing suppliers that will take on new orders as a result of this work, but a significant proportion of the jobs will be new. To make the obvious point, Hitachi does not have a manufacturing facility in the UK, so it will be creating new jobs to establish that manufacturing facility. As my noble friend also rightly said, the Midlands, particularly the East Midlands, is a strong centre for rail manufacture and is one of the three possible sites for the new manufacturing facility.

New jobs will be created very soon and will ramp up rapidly in 2011, 2012 and 2013 with production running for several years thereafter. We will see the jobs effect of this announcement soon, and it will be wholly beneficial to the regions concerned.

My Lords, I endorse the welcome given to the announcement by my noble friend Lord Attlee, but I have a couple of questions about the Great Western route, on which I have been a frequent traveller for 35 years or so in the course of my parliamentary duties. The Minister spoke about electrification. Will there also be improvements to the track? He did not respond to the question asked by the noble Lord, Lord Bradshaw, about whether trains will be 140 miles an hour or 125 miles an hour but, particularly if the answer is 140 miles an hour, the track will also need attention. Over the time that I have been travelling, it has got much more difficult to write on the train, which reflects the state of the track. The greater speed and electrification perhaps give an opportunity for improvements in that direction.

On the frequency of services and pressure, it is my impression that the real pressure on the Great Western, for instance, in the Bristol area where I come from—I do not regard Penzance as peripheral as the Liberal Democrats apparently do—the real pressure is on local trains rather than long-distance trains, which this announcement is about, particularly local trains in peak hours because there is more and more local commuting by train, which is desirable in itself, but not when the carriages are very full.

My Lords, I am grateful for the noble Lord’s broad welcome for the Statement. The trains will go up to 125 miles an hour, not 140 miles an hour. I am sorry that I did not answer that point earlier. The noble Lord is right that improvements can be made to the track. Significant improvements are already in the offing because of a big investment that will take place at Reading, a key bottleneck on the Great Western main line, including a substantial rebuilding of the station. There will also be improvements at the eastern end of the line as part of the electrification that will be necessary to extend the Crossrail line to Maidenhead. However, if there were to be substantial electrification, it would also involve track work, so we would expect to see upgrading of the track capability.

My Lords, I intervene only to ask the Minister if he can give me an assurance. In my experience serving on the Merits Committee—this is something that the noble Lord, Lord Hunt raised—there was a steady stream of statutory instruments allowing dispensation for not reaching the standards for disability access in screens, announcements, loos and other things to make them disability friendly. Can he assure us that that stream of government acknowledgements that we are not meeting the targets that we have set will stop with the new trains? If not, it is about time that we did.

My Lords, of course we intend that the trains will be compliant with the Disability Discrimination Act. Indeed, taking up the point made by the noble Lord, Lord Bradshaw, to which I did not reply, about what might happen with the existing 125s, part of the reason why they need to be replaced is that they are not sufficiently compliant. Significant modifications, which would be very expensive, would be necessary to make them compliant beyond the deadline of 2020 set for them to be so compliant. It is not impossible that such changes could be made, but they would require significant investment which train operating companies would need to be prepared to entertain. I hope that we will not be seeing the steady stream of requests for exemptions from modifications that the noble Lord mentioned.

My Lords, I declare an interest as a victim of Great Western’s sometimes aspirational timetabling. Can the Minister tell us when the electrification improvement begin, and when will it end?

My Lords, I cannot, because we are still analysing the business case for electrification of the Great Western main line. Until we have done that, we cannot indicate timescales.

My Lords, I join others in welcoming the Statement and am especially pleased that we have long-term investment and the opportunity to create much-needed jobs in future. In his capacity as the Minister responsible for the rail network, perhaps my noble friend can slow the pace down from high-speed to slower paces and consider the preservation and heritage railways. If we are looking to create jobs in the short term, perhaps we may persuade his department to consider some of the bids made by a range of the heritage and conservation societies for cash to assist in extending their networks.

I think in particular of the Bluebell Railway, which is endeavouring to extend to East Grinstead, which would make a link with the major network. For a relatively modest capital investment, if money were available, that would produce a substantial number of jobs: primarily labour is required to recover disused railways, rather than capital. If we are looking for quick hits using the fiscal stimulus package, I suggest that we consider some of the bids for lottery money in its various capacities. They go through a sieving and examination procedure—this applies not only to railways but in many areas—we could identify opportunities for relatively modest capital investment producing many jobs very quickly. We could do that for the railways.

My Lords, I am a great fan of the Bluebell Railway, and of our other preserved railways, which do a great job in maintaining our railway heritage and in acting as highly successful tourist attractions, but I fear that my responsibilities in respect of the existing network, which has onerous demands on investment, are such that it is not likely that we will be able also to fund improvements to preserved railways. I note my noble friend’s interest and if he can find any spare cash, I will bear his thoughts in mind.