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Railways: London Midland Rail Franchise

Volume 740: debated on Wednesday 31 October 2012

Question

Asked By

To ask Her Majesty’s Government what action they will take regarding the London Midland rail franchise, following recent disruption of its services.

My Lords, London Midland has not yet breached its contractual cancellations benchmark, which is calculated as a rolling annual average. However, if the situation continues and cancellations increase, the department has a range of actions available, which will certainly require robust plans to improve performance and, potentially, further punitive measures. My honourable friend the Transport Minister Norman Baker discussed the matter with London Midland’s managing director last week to apprise him of the department’s concerns.

My Lords, I am not sure that that will be much compensation to the thousands of travellers, particularly in the West Midlands, who have suffered from the cancellation of hundreds of trains in the past few weeks. Can I take the noble Earl to the general obligation contained in the franchise agreement, which is that the operator should undertake its job with a,

“degree of skill, diligence, prudence and foresight”?

The problem with the London Midland service is a shortage of drivers. I would have thought that that is ample evidence for an intervention into the franchise agreement. This company is not fit to run the franchise.

My Lords, I share the noble Lord’s concerns regarding passenger experience. He is right that the problem relates to a shortage of drivers and the ability of London Midland to retain the drivers it has and attract new drivers. It is a competitive market. There is also a considerable lead time for taking on and training new drivers. This is a matter for London Midland. However, there are strong incentives for it to put the situation right.

My Lords, is the Minister aware that since being granted a franchise London Midland has never recruited enough drivers or train crew generally, including conductors? Through the period of the franchise it has relied on its staff working rest days, Sundays and voluntary overtime in order to maintain the service. Without knowing the actual benchmarks to which the Minister referred, can he explain why on one day this year it cancelled no fewer than 100 services because of a lack of train crew? Is it not about time we did something to change this franchisee before all of us in the West Midlands take to our motor cars permanently?

My Lords, it would be premature to terminate the franchise at this point. There are severe penalties for breach of franchise. The noble Lord’s analysis of the problem may be right. However, it is important to understand that all train operating companies rely on rest-day working but only to the extent of about 3% or thereabouts, whereas this operator is now in the region of 6%. A shortage of drivers causes a serious problem for that operator but it is the train operating company’s problem.

My Lords, the short answer is no; the longer answer is that it is a moving annual average. The train operating company has the benefit of earlier good performance. However, if it carries on with the current trajectory, it will be in serious difficulties.

My Lords, it takes at least a year to train a driver. If we try to cut it down, we face the horrors we saw at Ladbroke Grove some years ago when an undertrained driver caused 30 deaths. London Midland has a full number of drivers in training and will bring forward a new timetable in December covering most of its services. Instead of talking about punishments and retribution, could we prevail upon the train company to put all its efforts into using all available media methods to apprise customers of any cancellations as far in advance as it can?

I entirely agree with everything my noble friend says, particularly his point about customers making sure they check with National Rail Enquiries shortly before their journey to give themselves the highest chance of not arriving at the station to find the trains are not running.

My Lords, is it not a fact that this Government and trains do not go together? First of all we had the fiasco over the west coast main line and Virgin. Ministers keep their jobs and some get promoted but, of course, civil servants get suspended. Some 3 million people are unemployed but London Midland still cannot get any drivers. To top it all we have the Chancellor—the Chancellor!—buying a second-class ticket and trying to travel first class. Is it not about time that we sent for Thomas the Tank Engine?

My Lords, first of all, there is no shortage of potential recruits to be train drivers, although a potential train driver needs to have certain attributes. The problem with the west coast line is one of franchising and procurement, but here the problem for the train operating company is in retaining and recruiting sufficient drivers to meet its obligations.

Does not the present problem arise because the drivers were required to work during the Olympics, and now they need leave?

My Lords, my noble friend is more or less right. The problem is that the chickens are coming home to roost because leave was restricted during the Olympics period, so the drivers want to have their leave now. In addition, we are experiencing the problems of the half term, when drivers naturally want to be at home with their families.

Will the noble Earl explain to the rail company involved that recruiting drivers for training is one thing, and getting them through the training is another, yet if the company does not retain them we have the fiasco that we have today? Will he emphasise to the company that part of the process of retaining their drivers is to pay them a comparative salary to those of rail drivers in other organisations?

The noble Lord is basically right. Full driver terms and conditions, including salaries, are confidential to the drivers concerned; however, a glance at the London Midland website states that the company is advertising for qualified drivers at a salary of £42,620, while Chiltern Railways, by comparison, is advertising for qualified drivers and offering £46,344.

My Lords, I have considerable sympathy for the Chancellor. Last weekend, I found myself totally confused by first class, second class, the price of tickets, which line to be on and everything else. When I showed my rail card with an old photograph of me, the ticket inspector said, “Gosh, you look like George Osborne”, which was a bit of a shock. Does not the noble Earl feel that we should try to simplify this plethora of ticket types and rules? It is totally confusing.

My Lords, I agree with the noble Lord that the ticket system is very complicated and no one has fully grasped the nettle, as yet, to put in place a better system.

My Lords, the noble Earl has repeatedly talked about the moving annual average. Does this mean that the rail company concerned is able to claim that it is always an average year in terms of its performance, in that it is worse than last year and better than next year?

My Lords, first, it is important to understand that the TOC has a target of continuously improving performance. Secondly, we need to understand that the penalties for breaching the contractual obligations are actually quite serious; so under the system of measuring performance it is possible for the TOC to have a few bad weeks and not be in breach of contract, but if it continues in that way, it will, under the terms of the franchise, eventually end up in breach of contract and be vulnerable to serious consequences.

My Lords, does the noble Earl agree that it is not just the salary that matters with a job; job satisfaction involves all sorts of other factors such as being respected by your employer, being given decent working hours, being able to expect to work on certain days and not others, and always having something to anticipate that is good? This, I am afraid, is where London Midland has fallen down, and is why it is not retaining its drivers. Can anything be done to encourage it to be good to its workforce?

My Lords, the noble Countess is absolutely right. What actually encourages London Midland to sort this problem out are the provisions of the franchise that contain the necessary penalties.

My Lords, does the noble Earl share the pleasure and delight that I certainly do in the knowledge that his grandfather presided over a wonderful Labour Government, who in 1948 nationalised the railways? Does he agree that in terms of managing the railways, that Labour Government were a huge improvement on this Conservative Government?

I am sure that the whole House will not be surprised to hear that I am very pleased at my grandfather’s achievements. However, there is a difficulty in having one nationalised industry: it is very difficult to determine the appropriate salary for a train driver when you have only one employer. We have several employers of train drivers and our experience is that train drivers are finding out who is the best employer, either in terms of salary or, as pointed out by the noble Countess, in relation to other terms and conditions.

My Lords, do the Government have enough staff in the Department for Transport to micromanage all these franchises, to ensure that each driver is paid the right amount and that there are enough drivers, and then to impose the penalties if they fail? After the west coast main line franchise, possibly it should be recruiting another 50% of its civil servants.

My Lords, I assure the House that my department does not have enough staff to micromanage the franchise. We have no intention of doing that. We receive reports on the cancellations but we do not need to micromanage.

Is my noble friend not concerned that the noble Lord, Lord Grocott, may be suffering from a failing memory if he thinks that the days of nationalised British Rail were better than what we have today?

My noble friend is quite right. As all noble Lords know, since the railways were privatised, we have seen a huge increase in passenger use and freight use.