Skip to main content

Railways: Investment

Volume 722: debated on Thursday 25 November 2010


My Lords, with the leave of the House, I should like to repeat the Statement made by my right honourable friend the Secretary of State in another place. The Statement is as follows.

“With permission, Mr Speaker, I wish to make a Statement on the Government’s plans for investment in rail infrastructure and rolling stock. These plans build on the announcement by my right honourable friend the Chancellor of the Exchequer on the outcome of the spending review. As we have consistently said, tackling the deficit is our top priority. By taking tough decisions on current spending, we are able to secure our future growth by making vital infrastructure investments.

Over the next four years, we will provide £14 billion of funding to Network Rail to support capital maintenance and infrastructure investment, and £750 million for high speed rail. We will also fund the Crossrail project, the Tube upgrade programme, light rail projects in Birmingham, Tyneside, Nottingham and Sheffield, and provide additional funding to franchisees for extra rolling stock. I can also confirm today that we will fund and deliver the Thameslink programme in its entirety, virtually doubling the number of north/south trains running through central London at peak times. This huge investment will link Sussex, Kent and Surrey, through central London, with Hertfordshire, Bedfordshire and Cambridgeshire.

The original programme for the rebuilding of London Bridge station, to increase through-running as part of this project, was always ambitious, with substantial risks around delivery and operation of existing services during construction. To reduce these risks, we have reprofiled the delivery of the programme to achieve completion in 2018. This will enable Network Rail to make the further efficiencies in the design and delivery of the programme that we require to ensure value for money. Passengers will start to benefit from incremental improvements on the Thameslink route from 2011.

As part of the Thameslink programme, we will procure a new fleet of trains, with up to 1,200 new carriages. This is in addition to 600 new carriages which will be provided for the Crossrail project. Together with the Tube upgrades, these projects represent a step change in rail capacity in London, providing a significant boost to economic growth potential in the capital. New Thameslink and Crossrail rolling stock will enable the redeployment of hundreds of serviceable electric carriages currently used on Thameslink services. These carriages belong to rolling-stock leasing companies, but we expect that they will be available at competitive leasing prices for use elsewhere, thus justifying further electrification of the network.

As a first step, I can announce today that Network Rail will electrify commuter services on the Great Western main line from London to Didcot, Oxford and Newbury over the next six years. Electric trains will speed up journeys, improve reliability and reduce the impact on the environment on these busy routes.

The Chancellor also announced on 20 October the electrification of the lines between Liverpool, Manchester, Preston and Blackpool, an investment of up to £300 million. I expect work in the north-west to begin next year and to be completed at around the same time as work on the Thames Valley commuter lines in 2016. Some sections will be completed well ahead of this, notably Manchester to Newton-le-Willows in late 2013, allowing new electric trains to operate between Manchester and Scotland. As with Thameslink, we will require Network Rail to keep a tight rein on costs.

The redeployment of electric rolling stock to these routes will, in turn, free up hundreds of diesel units for train operators to lease as they become available in the period after 2015. This will be welcome news to passengers. The Public Accounts Committee recently found that many services are unacceptably overcrowded, and I understand the frustrations of rail travellers who have to travel on packed trains. More investment is clearly needed. That is why I argued for additional rail investment in the spending review, and it is also why I have taken the difficult decision to allow regulated fares to rise by 3 per cent above inflation for the three years from 2012 in order to help us to pay for these investments.

In January 2008, the previous Government published a plan to bring 1,300 additional carriages into service by March 2014. This plan was never deliverable. In total, only 206 of those 1,300 carriages had entered service by May this year. My predecessors quoted a grand total of rail carriages, but never referred publicly to the fact that delivery of that total was subject to so many caveats and qualifications as to render it effectively meaningless. According to their published plan, the 1,300 carriages were not final and were subject to,

“value for money, affordability … linkages with other interventions or with other rail projects … infrastructure constraints … supply chain constraints”,

and even “credibility”. It went on to say in the document that,

“the final outcome could well be different”.

In other words, not so much a plan as a press release. So let me set the record straight: I can confirm today that an additional 650 carriages will have been delivered to the network between 6 May 2010 and March 2014. This is in addition to the Thameslink and Crossrail carriages I have already mentioned.

But it is not just about rolling stock. Network Rail has already started work on station improvements, with funding confirmed for developments at Reading, Birmingham, London King’s Cross and Gatwick Airport. Investments on the east coast main line, the Midland main line, improvements in Yorkshire on trans-Pennine routes around Manchester, and in south Wales will improve the line speed, reliability and capacity of services.

Beyond these investments, there are far-reaching decisions to be made about intercity services. In February 2009, the Intercity Express Programme, launched by the previous Government, identified the Agility Trains consortium as the preferred bidder to build a new fleet of intercity trains. Then, this February, my predecessor invited Sir Andrew Foster, former head of the Audit Commission, to provide an independent assessment of the programme. Sir Andrew presented his report to me at the end of June, recommending further work on the Agility Trains proposal and a detailed study of the alternatives. I can now tell the House that we have narrowed down the options from the four Sir Andrew identified to two. I have ruled out the option of requiring passengers to change from electric to diesel trains at a point in their journeys, recognising the value to passengers of preserving through-journeys. I have also ruled out the option of a wholesale refurbishment of the existing Intercity 125 fleet, some of which dates back to the 1970s.

The remaining options are, on the one hand, a revised lower-cost Agility Trains proposal that envisages a mixed fleet of some all-electric trains and some electric trains equipped with underfloor diesel engines, and on the other hand, a fleet of new all-electric trains that could be coupled to new diesel locomotives where the overhead electric power lines end. Both of these options would allow us to preserve through-journeys between London and those parts of the rail network which are not electrified. Both of them would deliver faster journey times. For example, we expect to see time savings of at least 15 minutes for the journey between Cardiff and London, bringing it to below two hours.

This is a major decision that will affect intercity rail travel for decades to come, and we must get it right. To address the outstanding issues on choice of train type and further electrification on the Great Western main line, additional work will be required within the department, with Agility Trains and with the Welsh Assembly Government on the business case for electrification into Wales. When this work and discussions with the Welsh Assembly Government and with my right honourable friend the Secretary of State for Wales have been concluded, I expect to announce a final decision on the Intercity Express Programme and on further Great Western electrification in the new year.

The package I have announced today has been possible only because this Government have been prepared to take tough decisions in order to protect investment in Britain’s future. This is a commitment to our railways which will benefit Britain for generations to come. I commend the Statement to the House”.

My Lords, I am grateful to the noble Earl for repeating this important Statement on investment in a crucial mode of transport in this country—the railway. I find a little tendentious the Government taking pride in investment decisions as if the groundwork had not been laid in the past. I hope the noble Earl is not suggesting, for instance, that there was a decision to be taken about continued investment in Crossrail or that Thameslink might have been abandoned, given the vital nature of both developments and the existing investment in these crucial services to the capital. When one is talking about long-term investment and the necessity for a Government to build upon the work of their predecessors—where often such investments are bound to span beyond the lifetime of any particular Administration—I hope the noble Earl will appreciate, as will the House, that tendentious criticism is ill placed. It is better that one should emphasise how the needs of the nation are being served.

I fear that an aspect of this approach may be reflected in the fact that the Statement contains some less attractive news as well as the confirmation of certain projects. Let me deal first with the projects which are being confirmed, both of which are subject to delay—Crossrail by one year and Thameslink by two. The adduced reason for this is that London Bridge station is subject to major reconversion, redevelopment and change. Whoever doubted that? The idea that the difficulties with London Bridge are a ready explanation for additional delay will not wash. What reflects the delay, of course, is the extent to which the Government are prepared to commit resources.

This is also true in areas where much greater disappointment will be felt. The limited commitment to the Great Western mainline development leaves adrift any commitment to electrification in Wales. In fact, the commitment to electrification does not go beyond Oxford in these proposals, and so south-west England will also be disappointed with this limited position.

It has been suggested that the Secretary of State for Wales is so concerned for her constituents with regard to the potential high-speed rail line that she is prepared to resign if it is not readjusted. She has her constituents’ interests properly at heart and, as Secretary of State for Wales, she has also the interests of a nation at heart. It would therefore behove her to think about the implications of the limited service and investment in rail in Wales in these proposals as well as her own constituency.

This gives me the opportunity to emphasise the fact—which is true with regard to the high-speed rail link, but perhaps more pronounced, as with all other rail investments—that we have to appreciate that delays cost heavily not only on the resources of the nation but also upon private citizens. If we are not clear about important routes, private citizens will sustain the costs of planning blight. I have no doubt about the difficulties involved in planning the route of the high-speed rail link and the noble Earl will know that we were committed to that development. I hope that when the Statement is made in the new year a similar commitment will be reaffirmed by this Government. I hope also that it will be recognised that it is important to define that route clearly and quickly. Whatever problems there may be for rural England—I do not underestimate the issues for an area of outstanding natural beauty such as the Chilterns—one must also recognise that uncertainty about the route going to Britain’s second city, Birmingham, has colossal implications for planning blight in that area and costs to citizens and businesses. After all, given that the high-speed rail link is predicated on the economic benefits that it will bring to the nation, we should be careful to minimise the cost. We shall scrutinise critically the new year announcement in those terms.

Tendentious reference was made to the 1,300 carriages planned by the previous Government—we also had £1.2 billion of investment scheduled for that. The noble Earl has reiterated the Statement, so I know where its origins lie—namely, with the Secretary of State. If it is contended that the previous Government had submitted a piece of paper rather than a plan, such conjecture is subject to parliamentary scrutiny and freedom of information. It is quite clear that the Permanent Secretary at the department thinks that the plans that were laid for 1,300 carriages were clear and were to be developed. Where does the figure of 650 come from? Well, I am not the leading mathematician in the House, but even I can work out that it is exactly half of a number which the noble Earl pretends had been plucked out of thin air. It had not been plucked out of thin air; it was part of a departmental plan for 1,300 carriages to which we were committed and of which this Government are prepared to commit only to precisely half. We will look at that with critical scrutiny as well.

Of course, we welcome the constructive parts of the Statement; for example, with regard to electrification in the area around Manchester and Liverpool. We recognise that these projects cost significant sums of money and we know that there are limits on public expenditure. There was anxiety on all sides that the Government’s commitment to reducing the fiscal deficit might lead to an abandonment of future investment in vital infrastructure. I therefore commend the Government on having made a Statement today which meets some clear objectives in those terms. However, it has been expressed in terms that scarcely bear any scrutiny that would be satisfactory to this House.

My Lords, I am very grateful for the measured response of the noble Lord, Lord Davies. We will take on the baton of improving rail services for our people. I accept that a lot of the groundwork was done by the previous Government. I am also proud of the fact that we have avoided the trap of cutting infrastructure investment—the noble Lord touched on that. He referred to some of the slight delays, which I explained in the Statement.

It is important to remember that we have retained the full scope of the Thameslink programme; that is, 24 trains per hour in each direction. I am sure that the noble Lord understands that the decision on electrification to Wales is dependent on the IEP project decision. He needs to understand that all these schemes are interdependent; they are a jigsaw. Today’s announcement on the Thameslink project and its beneficial consequences is just one part of that process.

The noble Lord referred to the HS2 route. My right honourable friend the Secretary of State is well aware of the difficulties, but he is extremely persuasive. Some people underestimate some of the mitigating measures that can be put in place. The noble Lord referred also to carriage numbers, and I am sure that he will table numerous written parliamentary Questions to drill down that issue. I look forward to answering them.

My Lords, those of us who take an interest in these matters will welcome many parts of the Statement that the Minister has just made. The previous Government promised an electrified Great Western main line. That line has never ended at Oxford but goes a considerable distance further west than that. Will he give us some assurance that the Oxford of tomorrow does not become the Bedford of yesterday—namely, a terminus for electric trains—rather than the whole line being electrified?

Without getting into the argument between the two Front Benches on the exact number of new coaches, can the Minister give the House some assurance that he will do what he can to see that those coaches are constructed in the United Kingdom? Furthermore, does he accept that the one downside of his Statement is the proposal to allow train operating companies to increase fares by inflation plus 3 per cent? Is he aware that that was a favourite tactic of British Rail in the days of the nationalised industry under successive Governments? Such increases appear guaranteed to choke off new passenger demand, rather than, as the Government’s stated objective supposedly is, to increase the number of passengers carried on Britain’s railway system.

My Lords, the noble Lord referred to electrification past Oxford. He will have to be patient for our determination on the IEP project, but he will not have to wait too long. He asked where the coaches would be constructed. He will know that EU procurement rules prevent us from guaranteeing that coaches will be built in the UK. Personally, I hope that they will be built in the UK, but we will have to see what happens.

I congratulate the Minister on the Statement, which, over the whole country, will be gladly accepted by most railwaymen. I deplore the sentiments expressed on the other side of the House, as this seems to be a great day for railways.

I have a few questions, however. The Statement refers to electrification in the north-west. It is important that Leeds is also included, because services across the Pennines are much slower than they would be and electrification between the west and east coasts makes an enormous amount of sense. The overcrowding of existing services, particularly around Manchester, is a blot on the record of the previous Government, because the crowding standards there are totally unacceptable.

Will the Minister confirm my arithmetic that something like 2,450 extra carriages are included? Reference is made to investments on the east coast main line and the Midland main line. I should like to know the nature of those improvements, because it is not very clear from the Statement. I was concerned about the Secretary of State ruling out the option of a wholesale refurbishment of the Intercity 125 fleet, some of which dates back to the 1970s. I am reliably informed by people in the rolling stock industry that those vehicles and the Mark IV vehicles on the east coast main line are quite capable of being turned into new vehicles, as has already been done for the Wrexham and Shropshire railway. We ought to be quite certain that we cannot use them, because their owners—the rolling stock companies—may lease them to a large number of open-access operators. I believe that any big increase in open-access operations will undermine the franchising process.

The noble Lord talked about bringing the journey time from Cardiff to London to under two hours, but it was under two hours in the 1980s, so that does not amount to much of an improvement. It is the timetable that needs altering—it has been packed with stops here, there and everywhere, making the journey to south Wales much longer than it need be. While we are on the subject of south Wales, my most anxious concerns are about the Severn Tunnel, which is the only way in and out of south Wales. I know that my noble friend in another place will be seeing the Minister on Monday to talk to her about the urgent necessity of doubling the line from Swindon to Kemble, so that there is a viable route between south Wales and London.

My Lords, my noble friend makes several important points. I shall just touch on some of the more important ones. He talked about the future of the HST 125 trains, the possibility of refurbishing them and the possible undesirable effects of those trains staying in the market. There are uses for that rolling stock in the future. One difficulty about that rolling stock is that its operating costs would be higher, while there might be a reliability question. The noble Lord knows how damaging breakdowns are on the system.

The noble Lord talked about the redoubling of the Swindon to Kemble line. That is a good scheme but it is not in CP4. I am making absolutely no commitment, but it could be a CP5 issue. He also talked about the time saving that arises from electrification. He needs to remember that that route is much more intensively used but that electric trains will give greater acceleration, so there will be a big benefit. However, we will keep the timetabling issues under review and make sure that we are not losing any benefits that we could gain.

My Lords, the Statement is couched almost entirely in terms of the impact on passenger traffic on the railways. Can the Minister comment on the Government’s policy for increasing the use of the railways for freight and on what the relevance of the Statement might be to that?

My Lords, we are very keen to move as much freight as possible on to the railway system. The Thameslink project is not relevant to freight but the High Speed 2 project is, because the west coast main line will run out of capacity and, if we do not build High Speed 2, we will not be able to put more freight on to the west coast main line.

My Lords, first, I thank the Minister very much for repeating the Statement. I also thank him for the tone of his replies, particularly in his reference to the previous Administration. As he knows, I had a very minor part in the Department for Transport in that Administration and I welcome what he said. I am aware that, when a Statement is repeated from the Commons, we tend to hear rather more strident language than we normally would in this Chamber. I also endorse much of what the noble Lord, Lord Bradshaw, said. He is too modest. When the journey time between London and Cardiff was under two hours, it was when he was running the western region of British Railways. Indeed, that journey time is not that great an aspiration.

I obviously welcome the continued commitment to High Speed 2, to the electrification programme in the north-west and to the Great Western main line as far as Newbury and Oxford. I should declare an unpaid interest as a member of the First Great Western advisory board. I want to press the noble Lord a little bit about what the mechanism will be for reviewing the possibility of going further west than Didcot. Is there a possibility, for example, that electrification will reach Bristol and is it the case that electrification to Cardiff and Swansea is dependent on the Welsh Government making some significant financial contribution?

My worry about the Statement, which I would like the Minister to address, is the question of overcrowding. He will be aware that the figures from the Office of Rail Regulation show that services in London and the south-east are already seriously overcrowded, particularly on First Great Western, where they worsened from 6.5 per cent of passengers in excess of capacity in 2008 to 8.2 per cent in 2009. The consequence of the cascading of electrified stock from the existing Thameslink service to the new electrified services to Newbury and Oxford is that there will be a delay of four years. I am fearful that overcrowding will increase during those four years.

I hope that the point made by my noble friend Lord Snape about the fare increases pricing people off the railway will not come to pass. Like the Minister, I am anxious to see the railway used to the maximum extent. It would be disastrous if we went back to the sort of policy that existed in the 1970s and 1980s, when the response to passenger demand was simply to put up the fares to choke it off. Will the Minister comment on overcrowding as well?

My Lords, with regard to the noble Lord’s kind words about the difference between this place and another place, I could not possibly comment. The noble Lord talked about electrification out to Bristol. That is an important point. As I said, it is closely linked to the IEP solution and the development of the business case. He talked about a possible contribution from the Welsh Assembly Government. I think that he is thinking along the correct lines. I will talk to the officials and reflect on his points about overcrowding. The decision regarding fares was difficult, but we have to get some more income to pay for the improvements. However, it is certainly not a mechanism to choke off demand and passengers. We want people to travel by rail; we do not want them to travel by car.

My Lords, is the Minister aware that the government Statement that he has made is important and will be widely welcomed throughout the country, not just in London but in many other parts as well? Is it not sensible, even in these times of austerity, that plans for capital investment should go ahead and be sustained? In the past, it has been the case that capital projects have been cut back. That is one of the most significant parts of the Statement. I underline the importance of the high-speed service to Birmingham; it is important not just to Birmingham but to commerce, industry and business in the whole of the West Midlands. I hope that he will take it that there is a great deal of support for that new service.

My Lords, it is an important Statement. I also look forward to making further welcome Statements about the development of our railway system. My noble friend is right about capital investment; we are spending for future growth. He talked about the benefits of High Speed 2 for the Midlands, but it would also give benefits much further north.

I thank the Minister for his courteous replies, but is he aware that in our Welsh folklore there is the story of the dictionary that, under “Wales”, states: “For ‘Wales’, read ‘England’”? Is there not a danger here that Wales will be short-changed—just as we were, for example, when at the time of the introduction of HSTs we were given only the hand-me-downs from the east coast main line? Why is more work needed in Wales on this matter, not in the north-west? When the Minister refers to the discussions within the Welsh Assembly Government, does that not mean in effect that the aim of the Government is to force the Welsh Assembly Government, at a time when their resources are being limited, to pick up a substantial part of the bill for the electrification of the line to south Wales?

My Lords, we do not intend to short-change Wales. Wales will benefit from the electrification; indeed, Wales would benefit even if we electrified only to Bristol because the journey time to London will be reduced and the journeys will be more reliable.

My Lords, as someone who travels regularly between Cornwall and London, I have to say that the Statement inspires rather less warm feelings in me than it may in those from some other parts of the country. Again, we see a decision delayed. Can the Minister give some indication of what a decision in the new year means in practice? How quickly will we see a decision on the replacement of Great Western intercity rolling stock? I express my deep concern that, while it is great that making passengers change train has been ruled out, changing the locomotive does not inspire great confidence. I hope that we will see a new diesel/electric hybrid able to run all the way through to Penzance.

The noble Lord talks about the difficulties faced by Cornwall and the West Country. I am well aware of the economic difficulties in that part of the country. He talks about the disadvantages of attaching a diesel locomotive to the front of an IEP train. It is an obvious difficulty, which will no doubt be taken into consideration when developing and assessing the business cases.

My Lords, is my noble friend aware that the decision on the Intercity Express Programme will be followed very closely in the north-east of England? The Agility consortium, particularly Hitachi trains, is looking to invest £660 million in a plant at Newton Aycliffe in the north-east, which is of course the home of the railway’s first steam engine and the location of the first railway line between Darlington and Stockton. While recognising that there is a great need to ensure that major capital investment programmes are well researched and offer full value for money, I urge my noble friend to bring that decision forward as quickly as possible. It is crucial for the north-east economy and for manufacturing; it would also be a tremendous boost to the north-east at a time when it is seeing lots of public spending restraint in other areas. Will he focus particularly on the point in his Statement on the revised bid put forward by Hitachi and the Agility consortium? I think that I heard him say that it had been resubmitted and was now lower than the other option. At times of fiscal constraint, that might be a clincher.

My Lords, I am grateful for my noble friend’s contribution on the importance of the IEP to the north-east. That was no doubt very high up in the mind of the previous Administration, quite rightly. My right honourable friend the Secretary of State is fully aware of all these factors and the importance of, as my noble friend put it, a boost to the north-east. My noble friend talked about a lower cost bid. That is welcome as well, but it is important that we select the correct technical solution to the problem of having a bi-mode capability.

My Lords, as one of the small minority of Members of this House who live in the north of England, I congratulate the Government on the large number of measures that are suggested, including electrification in the north-west and improvement to services across the Pennines and in the Yorkshire and Manchester areas, even though the much needed increase in rolling stock is yet again London’s cast-offs, which is what we normally get lumbered with. Nevertheless, it is better than nothing—cattle trucks are better than no trucks at all. Is the Minister aware of the need to reinstate a teeny-weeny bit of track in the Todmorden area, known as the Todmorden curve? That would allow trains going from Burnley over the Copy Pit line to join the old Calder Valley main line between Todmorden and Hebden Bridge to turn right as well as left, and allow us not to improve the rail service from the Burnley and Pendle area to Manchester but actually to introduce one.

My Lords, I am aware of the problem of London’s cast-offs, as the noble Lord put it. However, it is a sensible way of extracting all the capital value from the rolling stock. The noble Lord asked about the Todmorden curve. This was raised by a right reverend Prelate the last time I was asked a question on the railways in the north-west. It amused the House that I knew the answer. The snag is that I have forgotten that answer but I assure noble Lords that it remains the same.