Railways

11:37:00

The Minister of State, Department for Transport (Lord Adonis)
rose to move, That this House takes note of the prospects for the future of the United Kingdom’s railways.

The noble Lord said: My Lords, in rising to move that this House takes note of the prospects for the United Kingdom’s railways, I want first to pay tribute to all who work on and for the railways, including the British Transport Police. They do a great job of service for the British public, often at unsocial hours; we owe them a debt of gratitude and they are rightly proud of their work and their industry.

The history of the railways was, until the turn of this century, one of extraordinary innovation and dynamism by the Victorians, followed by a century of gradual and then precipitate decline and stagnation. Like all simplifications, this is an oversimplification. The Victorians made their mistakes, not least their failure to build effective north-south and east-west links across London, which has bedevilled commuters and the national economy ever since and is only now being put right by Crossrail and the Thameslink upgrade. There were also notable successes in the 20th century, such as the electrification of southern England’s commuter network. Certainly, however, the 50 years between the Government of the grandfather of the noble Earl, Lord Attlee, in the 1940s and that of John Major in the 1990s was a period of decline and underinvestment which many thought would never be reversed in the face of the seemingly relentless rise of the car and the truck. This year marks the 50th anniversary of the opening both of Britain’s first motorway and of Gatwick airport. Road traffic has increased 15-fold since 1950. For all British Rail’s commendable marketing efforts in the 1970s, it is fair to say that the last half century was the age of the car and the plane, not the age of the train. The botched rail privatisation of the mid-1990s, followed by the Hatfield rail crash and the collapse of the privatised Railtrack, was in many ways the nadir for the industry.

The 20th century decline of rail was of course an international phenomenon, but the relative decline was greater in Britain than in much of western Europe—although less than in the United States—because of slower rates of innovation and investment.

While most of western Europe went straight from steam to electric traction for intercity and commuter services in the 1950s and 1960s, Britain only partially electrified; and while France, followed by most of its neighbours, built high-speed lines from the 1980s, we sat on the sidelines. We did build the Channel Tunnel after a century of dithering, an historic achievement of the Government of the noble Baroness, Lady Thatcher. However, as President Mitterrand noted at its opening in 1994, the Eurostar trains would speed through France at 186 miles an hour but then slow to half that to enable passengers to enjoy the beauty of the Kent countryside, not to mention the glory of the south London suburbs.

Since the late 1990s, a renaissance of the railways has taken place. Passenger numbers and freight volumes have grown at a remarkable rate. Passenger numbers are more than 50 per cent higher. There were 1.2 billion passenger journeys last year, higher than at any time since 1946. Freight traffic is up by 40 per cent in the past decade. The number of services, and service quality, have also improved steadily. Almost exactly a year ago, St Pancras re-opened as the terminus for High Speed 1, the quintessential marriage of Victorian railway grandeur and 21st century high-speed technology. It is a moment that will surely come to be seen as the start of a new era in Britain’s railways.

There is plenty in all this for the railway romantic, but it is important to appreciate the hard-headed economic, environmental and technological factors which are driving this upsurge in rail, and which I am confident will take it a long way further in the decades ahead. In an age of growing traffic congestion, environmental concern and rising carbon emissions on the one hand, and steadily faster, more efficient, and more environmentally friendly trains on the other, the terms of trade in transport are changing fundamentally. The railways are coming back, not only because we like them but because we need them. Nothing exemplifies this better than one of the lesser reported ballot results in the United States on the day of Barack Obama’s election a fortnight ago. The people of California voted yes to a referendum proposal, backed by Governor Schwarzenegger, for a $10 billion bond to start building America’s first high-speed rail line between Los Angeles and San Francisco, with the aim of reducing the 350 mile rail journey time to a mere two hours and 40 minutes on trains travelling up to 220 miles an hour.

The go-ahead for the Californian scheme followed a robust campaign which focused on the strong transport and environmental benefits of high-speed rail. Proponents argued that it would alleviate the need to spend an estimated $100 billion on new freeway and airport capacity over the next 20 years. So after decades when rail was virtually derided as a mode of passenger transport in the United States, California looks set to follow most of western Europe, China and Japan in pioneering high-speed intercity rail.

Beyond High Speed 1, we have not so far opted to join this international movement. However, I highlight the terms of reference of the Network Strategy Group I chair, set up by my right honourable friend the Transport Secretary last month, which include examining the need for new lines over the next 20 to 30 years, alongside the case for a rolling programme of further network electrification. Next week I go to Japan to see at first hand its high-speed network and its ambitions for a generation of still higher-speed Maglev trains. We hope to be in a position to indicate conclusions and a way forward on electrification and new lines by next summer.

I also point to the other modernisation programmes in train, including the £16 billion Crossrail project, which will take 24 trains an hour through central London on a line which connects Heathrow and the west of the capital, through the business and commercial heart of the City, into Docklands and to Essex beyond. In addition, the Thameslink project will take up to 24 trains an hour from Bedfordshire, Hertfordshire and the north of London through central London to Brighton and other destinations in the south. These are both transformational projects which will improve radically the network at its most congested and economically vital heart. We are also pioneering the next generation of express trains, which will take over from the ageing diesel 125 fleet and provide greater express capacity on the electrified network too.

The intercity express programme will provide a new generation of express trains capable of running by both diesel and electric traction, and switching between the two as needed, at speeds of up to 125 mph. This will offer greater capacity, flexibility, speed and reliability to existing intercity services. The introduction of the next generation of in-cab signalling towards the end of the next decade is also likely to have a significant positive effect on capacity and reliability.

Nor are we neglecting the interests of rail freight, a vital area of current and future growth. The planned £200 million investment in the strategic rail freight network will be capable of handling more and longer trains, carrying greater loads, and offering better connections with the UK’s international gateways and main transport hubs.

As Minister for Transport, it is my job to be relentlessly on the side of the passenger. I am well aware that despite these welcome prospects for the medium-term and long-term future, passengers have real concerns about the railway here and now, and I fully accept our duty to bring about improvements month by month.

Today’s commuters and other travellers care about the number of services available, performance and reliability, safety, capacity and overcrowding, and ticketing and fares. The £15 billion programme of investment in the network over the next five years, set out in last year’s rail White Paper, is focused on concrete improvements in each of these respects. Let me take each in turn.

In respect of the number of services, significant improvements will be evident from 14 December this year, when the new timetable is introduced. This will be particularly evident on the West Coast Main Line, where the £8.8 billion modernisation programme is drawing to a close. The standard London to Birmingham journey time will, from 14 December, be reduced to 82 minutes. The fastest services to Manchester will be just over two hours, and four hours 10 minutes to Glasgow. There will be a shuttle-style service every 20 minutes to Birmingham and Manchester, a further step-change improvement. In the early 1990s, there was not even a proper hourly service between London and Manchester.

Across the network as a whole, the number of train services will increase on 14 December by more than 5 per cent to 104,500 a week—the highest on the network since Beeching. This includes a 9.8 per cent increase in Sunday services, and a 6.5 per cent increase on Saturdays, as we seek to offer a reliable seven-day-a-week railway in place of the patchy weekend timetables of the past. From December 2009, the new domestic services on High Speed 1 will offer significant improvements for passengers from the Kent coast and Ashford into the Thames Gateway, east London and central London.

On reliability and punctuality, the latest figures show that in the past year more than 90 per cent of trains arrived punctually under the public performance measure—that is, within 10 minutes of booked time for intercity services and Five minutes for suburban services. That compares with 75 per cent seven years ago. In the last four-week period for which figures are available, 14 September to 11 October, 91.7 per cent of passenger trains arrived punctually. But we need to see these figures continue to improve. We have set a higher benchmark for the future and, where performance is unsatisfactory, we are ready to take immediate action to improve services for passengers. That is why, for example, we insisted upon a remedial plan to improve reliability on First Great Western, where there was a serious breakdown of performance earlier this year. We also secured a package of passenger benefits worth £29 million, including discounted tickets and extra rolling stock on the crowded Cardiff to Portsmouth route.

To increase capacity further, we are working with the train operating companies and rolling stock companies to procure an extra 1,300 rail carriages by 2014; 423 of these are already on order, to be delivered between 2009 and 2011—92 for southern services, 217 for London Midland, eight for Chiltern, and 106 extra Pendolino carriages. I feel as though, during the past six weeks, I have answered Questions for Written Answer from the noble Lord, Lord Bradshaw, in respect of every single one of the remaining 877 carriages, and I continue to assure him and the House that new orders will be placed soon and we believe that we are absolutely on course to meet our commitments. These 1,300 extra carriages will enable more trains, longer trains and more modern trains to be available in areas where there is greatest demand over the next five years. In addition, in order to increase capacity, Reading and Birmingham New Street, the two busiest stations outside London, will be redeveloped, along with the refurbishment of 150 mid-sized stations.

In respect of passenger safety, the Secure Stations Scheme is improving station security. Launched in 1998, the scheme accredits individual stations which work with the British Transport Police and partners to improve station security. Funding for the British Transport Police has more than doubled in the past six years to £271 million a year. There are now 2,800 BTP officers and 262 community support officers in the force, and the number of offences reported by the BTP fell by 12 per cent between 2006-07 and 2007-08. More than half of all stations, and more than 3,000 trains, are now equipped with CCTV surveillance systems, and more than 500 stations now have cameras that are centrally monitored. This means that not only will passengers be safe but they will feel safer, which is vital to building passenger confidence and tackling social exclusion.

In terms of ticketing and fares, we believe that the RPI plus 1 formula in respect of annual increases in controlled fares provides a fair balance between, on the one hand, the interests of the passenger and, on the other, those of the taxpayer, who provides the £4 billion in annual subsidy to the industry. Thanks to recent reforms, operators have introduced common names and standard terms for fares, and we are asking the industry to back the new structure with a “price promise” that will give passengers confidence that they have been sold the right ticket at the best price.

However, we need to do more to simplify the ticketing system and to enable passengers to buy tickets quickly and simply. I am sure I am not the only person who has missed a train at Victoria queuing for a ticket in a gated station and who has found it difficult to navigate the internet ticketing obstacle course. I am working on these issues with Passenger Focus, the passenger watchdog, which does an excellent job on behalf of passengers. I expect to have more to say about this in the new year.

It is also important that we make it easier for passengers to switch between different forms of transport. Better facilities for cyclists is one issue, and the recently published specification for the new South Central franchise sets out significant improvements for cyclists at South Central stations. Better interchange arrangements between rail, cars, buses and coaches are also necessary. Several of our train operating companies are also bus and coach operators and are seeking to integrate rail, coach and bus travel in novel ways. The new East Midlands Parkway station, opening next year, will be a significant step forward in this respect. There is great potential for the marketing of tickets and journeys which are part bus or coach and part train to meet the needs of passengers better. An expansion of park-and-ride facilities will also benefit car owners who wish to switch to rail for part of their journey.

As I used to say when at the Department for Education and Skills, “No Complacency” is my middle name, and I am certainly not complacent about the state of the railways. A lot more needs to be done, month by month, to improve the service for passengers and freight operators, and to improve the system’s efficiency and value for money for both passengers and the taxpayer. It is particularly important that Network Rail continues to improve the condition in which it keeps the track, the way in which it conducts maintenance and renewal work so as to cause minimum disruption to passengers, and the efficiency of its operation.

The Office of Rail Regulation has highlighted the scope for considerable efficiency savings in Network Rail’s operations in the next five years as the company seeks to achieve best international standards in track maintenance and renewal, which the ORR believes it is still some way short of. The memory of the West Coast Main Line breakdown last Christmas and new year has certainly not been forgotten by passengers or by the Government. Network Rail, for all the improvements of recent years, still has a big job on its hands, which I know it fully accepts. That is all the more important as we enter a period of greater economic uncertainty, when value for money is ever more crucial for hard-pressed passengers and taxpayers.

I end, as I began, by emphasising the strongly positive climate which now exists for rail in Britain. Decline is a thing of the past. A spirit of optimism is abroad and there is a lot to be optimistic about. The great Victorian railway pioneer, Isambard Kingdom Brunel, vowed to create a railway on which, in his words,

“we shall be able to take our coffee and write whilst going noiselessly and smoothly at 45 miles per hour”.

I know that all too many passengers wish that they could sit down to enjoy their coffee and write, but I am sure that even Brunel would be impressed by the railway technology of the 21st century and all it has to offer this generation and the next at speeds rather greater than 45 miles per hour. I beg to move.

Moved, That this House takes note of the prospects for the future of the United Kingdom’s railways. —(Lord Adonis.)

11:55:00

Lord Lyell
My Lords, after that wonderful speech by the Minister, delivered at considerably more than 45 miles per hour, I adjusted the focal length of my glasses and looked around to discover that I am one of the only amateurs taking part in the debate. Together with the noble Lord, Lord Berkeley, my career goes back to 1952, when we both studied at that wonderful college beside the Thames, Eton. His professionalism in his new career in your Lordships’ House and outside bears testimony to all the work that he has done.

I declare an interest as a noble Lord who probably does more mileage on the railways of the United Kingdom than any other. I hesitate to say “United Kingdom”, but I refer back to my career in Northern Ireland, which the United Kingdom covers. Today, I shall desist from worrying about what went on between Belfast and Londonderry, let alone the integrated system to Dublin, and I shall concentrate on Great Britain, especially Scotland. I travel 450 miles twice a week between Dundee and London on the east coast main line. I would like to thank all the personnel who have worked on that line over the many years that I have travelled from Scotland to London. The Minister mentioned the British Transport Police, who on several occasions this year have been able to assist me in various aspects of my travels to and from your Lordships’ House.

Perhaps I might split my remarks between passenger and freight. On the passenger side, your Lordships may be aware that north of Edinburgh the east coast main line, which continues to Aberdeen, is not electrified. I am a veteran of the high-speed train known as the 125. I am particularly gratified to hear the Minister say that those trains are being looked at, as some of the accoutrements and furnishings go back, to my mind, to the early 1980s. I have to take medicaments because of the draughts when the doors jam open. From everything that the noble Lord has said, however, it seems that progress is being made on that line.

Those of us who use the east coast main line are impressed with the electric service and I suspect that the noble Lord, Lord Rosser, is as well. The noble Lord, Lord Berkeley, and I may remember our elementary mathematics: 125 miles per hour is, I believe, 225 kilometres per hour. To achieve those speeds, to which the Minister referred, one needs a certain amount of infrastructure. One hears about, across the Channel, the TGV system in France and, to a great extent, the neue Bahn in Germany.

I have one point about the east coast main line. The Minister mentioned Isambard Kingdom Brunel. Perhaps he would let me know in writing, or someone may enlighten me during the debate, who is responsible for repairing the old Great Northern Railway line that goes from King’s Cross to York, which I believe is 188 miles. The layout on that line, apart from some tunnels and one or two viaducts crossing the Chilterns, is perfect. It is a testimony to what can be done on the east coast main line with the 225s, which would not require the enormous infrastructure changes and earthworks that are required in France, Germany, Italy or elsewhere for high-speed trains.

I have some experience of travelling in Europe. Germany is rather like France, Italy and some parts of Spain. I have some personal knowledge of travelling in the Alps, particularly in Switzerland. Switzerland has an excellent integrated system for passenger trains. It has elapsed-time, fixed-interval trains so that you know that you will be able to make your connection. It is beautifully adjusted. Switzerland, Austria, France and Italy cover the Alps. Perhaps the Minister might be able to confirm that I have some of this right. I have a friend in Switzerland, former Federal Councillor Ogi. He was responsible for driving through the new alpine transport system. He had serious difficulties—political, personal and others—with many people in Switzerland when preparing two enormous transalpine, or subalpine, tunnels. The one that goes into the Rhone valley is complete. The second, the Gotthard tunnel, will be open, I think, within the next four years. Perhaps the Minister can confirm that I have that partly right. Those tunnels will significantly reduce the road transport, pollution and other problems associated with moving freight across Europe.

The Minister mentioned both sides of this aspect in Great Britain. Can he confirm that large parts of the track infrastructure and, for all I know, the laid track of the old Great Central line that used to go from Marylebone to Manchester would be suitable for extensive freight transport? The noble Lord, Lord Berkeley, knows a lot about this and may be able to fill me in later. My noble friend Lord Henley reminded me that north of Leeds there is the old Midland line from Settle to Carlisle. I call it Ais Gill because it goes over it. I understand that that line still has excellent double-line infrastructure and track for freight. The passenger traffic is not great, but it can be. I hope that the Minister will be able to confirm that where we have existing track and infrastructure it will still be available.

Will the Minister write to me to confirm that the loading gauge for tunnels and track—the width and all that—will be suitable for all the improvements in transport that he and all of us wish to see? Across the Channel, the loading gauge—the height, the width and, for all I know, the weight—even on the older lines, certainly in the Alps, is greater than we have in Great Britain.

From a humble position, I thank the Minister for his great exposition of the current position. I look forward to hearing what he has to say in future and to hearing the other speakers in this debate who are the real professionals on this.

12:04:00

Lord Bradshaw
My Lords, I, too, start by thanking the Minister for his optimistic view of the future. I hope that he will be able to carry it into effect. He certainly has my best wishes and, I imagine, those of most Members of the House. I will dedicate what I have to say to the memory of my friend in another place, Robert Adley, who first brought me into the political arena as the adviser to the Transport Select Committee of the House of Commons in 1993. I speak from a professional, not a romantic, point of view and not from a particularly political point of view. The Government inherited a terrible mess and the Conservatives would do well to reflect on the advice given by the noble Lord, Lord Forsyth, who is not in his place, about how the Government should efficiently run business, and on what they did to the railway. They wasted vast sums of money, created an awful bureaucracy and almost ruined our railways after Hatfield.

However, the charge that I make against the Government is that there are fundamental flaws in the current system. Leaving aside the collapse of Railtrack, which obviously occupied a good deal of their early time, and John Prescott, who forced through the upgrading of the links to the Continent, we still await the delivery of Thameslink 2000—that was its title—and Crossrail. Those will happen in future, but I remind the Minister that the Government have been in office for 11 years. He spoke about the renaissance of the railways, but the reasons why we have a much busier railway are that the economy has grown substantially, there has been an enormous increase in road congestion, people are living further away from where they work, so there are more commuters, and there is genuine concern about the price of oil and the environment. The increase is certainly not because we have adequate rolling stock, it is not because we have opened a lot of new lines, it is not because we have opened many new stations—British Rail had a much better record—and it is not because we have had electrification, because we have had no electrification. The only bit from St Pancras to the Channel Tunnel was probably built by the French.

Engineering costs have gone through the roof, whether the cost of track, signalling or rolling stock. Rolling stock provision has been stultified. Will the Minister confirm on the record his Written Answer of 29 October that 1,300 new vehicles will be delivered during control period 4? There is a lot of suspicion in the industry that some double-counting is going on and that not all the vehicles will be new; some will be vehicles transferred from place to place. Enterprise has been almost killed off, except in the case of freight, where the noble Lord, Lord Berkeley, and the people with whom he works have made enormous efforts to put the freight business, which was shamefully neglected by BR, back on its feet.

The bureaucracy that surrounds our railway has multiplied tremendously. As an example, I have here the Office of Rail Regulation’s determination of Network Rail's output for the next control period. It has about 465 pages and is a heavy document, as it is printed on good paper. It encapsulates the work of armies of consultants. They are people who were never employed on the railway before and I guess that many of them do not know much about how railways work.

I imagine that the specification for the replacement high-speed train, to which the Minister referred, is a very big document. Of course, it was possible simply to go to the rolling stock industry to say, “We want a high-speed train”, and see what the industry had to deliver, rather than convening committees to design one, which has all the properties of committees designing a horse and arriving at a camel. The question of whether we need a diesel high-speed train needs re-examining. I believe that if we are to have an electrified railway, we want an electric high-speed train. If a train needs to be moved across the periphery of the railway, a locomotive can be simply attached to the front to take it to its destination.

Perhaps the Minister would also look at the size of some of the invitations to tender, which can amount to cartloads of paper. Again, we never had that before privatisation. The Government give the impression of action, but in answer to many things they pass the blame to Network Rail, the train operators and the ORR. The Minister could perhaps initiate the practice of having a notice on his desk that says, “The buck stops here. You will get answers here. We will not shove them off to other people”. This morning, on the “Today” programme, a critical item about the Criminal Injuries Compensation Authority said that people did not get compensation quickly because the papers are just passed from one official to the next. No one was doing anything wrong; people ticked boxes but they did not ensure that action was taken.

In October, the National Audit Office published a report on letting rail franchises. It was a self-satisfied report, which said that everyone had ticked the right boxes and had done what they should. On 26 October, I wrote to the chief executive and asked him eight questions. Do franchise terms reflect the long life of assets and ensure that these are obtained on the best possible terms to the taxpayer? What is the cost of letting franchises? What about end-of-franchise behaviour? How is past performance rewarded in a franchise? Has the department been sufficiently imaginative in designing reward systems? Is the department really planning the 1,300 new vehicles to which I have referred? Does the report recommend that the department must increase or improve the calibre of its staff, particularly engineers? Put simply, where are these people to come from? There is no surfeit of qualified engineers. I agree with the report that PTEs should be more involved. I also agree that bidders should be much more imaginative in making bids, not simply trying to adhere strictly to the absolute word specified in the franchise.

I have mentioned the defensiveness of the Civil Service versus the train operators, which are almost afraid to make robust representation to the department. I have personal experience of this. When I first came to this place, I was on the Strategic Rail Authority. Three times, Sir Alastair Morton, who was then the chairman of the Strategic Rail Authority, had telephone calls from the Under-Secretary protesting that I had asked questions about transport in this House. The Civil Service is very defensive and tries to crush anyone who raises pertinent questions.

Network Rail’s advertisement for a new chairman bears looking at. It states, for example, that it is looking for someone for two or three days a month and that no particular knowledge of the railway is necessary. Yet this is the most important job in railways. It is not a job for a retired general or bank manager when he can find time to spare from the golf course. It is a serious job.

I believe that only two courses of action are open to us: either we take the whole railway back into public ownership under a reconstituted railways board or we radically reform the whole of the franchising process and, in doing so, encourage challenge on the part of the Government and empowerment on the part of the operators. Those who win new franchises or gain extensions to their existing arrangements will do so on the basis that quality of service continues to rise, that they are willing to invest real money in the system, that fares are kept level with the RPI and that there is an enormous increase in the provision of car and cycle parking. The Minister referred to this when talking about East Midlands Parkway, but more needs to be done because so many car parks are full after eight o’clock in the morning. We need long, rolling franchises; that is, if the operator does well, the franchise does not come to an end. We need to stimulate the rolling stock market, if necessary by the Government taking finance leases on rolling stock if the roscos will not do so. We also need some vertical integration, although I realise that doing that, as well as giving any directions to Network Rail, requires primary legislation.

I turn to the question of the high-speed line to the north. I have done some work with former railway colleagues on an alternative: what could be achieved by upgrading the existing east coast main line rather than building an entirely new one. A great deal of value could be realised for much less money if that were done. I invite the Minister to meet me and my colleagues soon so that we can explain to him what could be done with the east coast main line to make it a very much better railway. Upgrading could offer, for example, a journey time of three hours 15 minutes to Edinburgh, the provision of a separate line for freight almost all the way and an all-round better service.

I do not agree with the Conservative policy so far expounded to build a high-speed line by taking money away from the rest of the railway. We will end up in the same situation as the French: a third-class railway operating underneath the TGVs. We do not need that; we need a good railway system that serves everybody. We should be starting on electrification, about which my noble friend Lord Wallace will say more. However, I draw the Minister’s attention to the perilous situation of the Bombardier works at Derby. It is the only works in this country that is building diesel trains. If the works close, which Bombardier is threatening if it does not get orders, they will not reopen and we will then have to pay a king’s ransom to buy trains abroad. The Minister mentioned Birmingham. The only thing I want to say is that a lot of the money is being spent on a new station at the top of the city and very little is being done about capacity. There are good schemes, but they need some impetus.

Lastly, I want to recount a couple of things about the situation in Wales. First, last Saturday when the train to Holyhead left Cardiff Central near the Millennium Stadium on a rugby international day, fisticuffs broke out because people could not get on the train and lots of people were left on the platform. When passengers ask, “Can’t you put some more rolling stock on?”, the simple answer is that there is no more rolling stock and you cannot rob one part of Wales for another. The second point that I want to draw the Minister’s attention to is the desperate need to redouble the line between Swindon and Kemble. That sounds a little esoteric, but in fact the only link between south Wales and London is via the Severn Tunnel. If that tunnel were to fail—it is old and full of water—there would be no credible way of connecting south Wales with London. A bit of a push from the department would have persuaded the ORR. The ORR had more representations on this than on anything else, yet it is not included in the schemes to be funded in CP4. It could be included either by extending the franchise or by finding some method of incentivising the train operating company.

In conclusion, we want a busier, larger and more efficient railway with a lot fewer hangers-on and buck-passers.

12:20:00

Lord Faulkner of Worcester
My Lords, I am delighted to join others in congratulating the Minister not only on the brilliance of his historical analysis of the railway but on encouraging us to have this debate at all. It is, I think, the first time in my nine years in this House that the Government have initiated a debate on the future of the railway, and it is a measure of his self-confidence and that of the Government in the railway compared with a few years ago.

I should say at the outset that I am particularly pleased that the Minister paid tribute to the British Transport Police. I have spoken up for that body on a number of occasions in this House and I have long wanted its role to be expanded. I shall probably talk to him on another occasion about the role that it could play in policing Britain’s airports; that debate is for another day.

I declare a number of non-commercial interests in the railway. I am proud to be the president of the Cotswold Line Promotion Group, which is campaigning for the reinstatement of the double track on the line from Oxford to Worcester and was rewarded with success in the recent ORR determination. I am treasurer of the All-Party Group on Rail, and I chair the Railway Heritage Committee. I am an advisory board member of Greengauge 21, which is campaigning for the new high-speed line from London to Scotland, I am a trustee of the National Museum of Science and Industry, and I sit on the advisory boards of the National Railway Museum and its outpost, Locomotion, in county Durham.

This is a great time to be associated with the railway, as all three speakers so far in this debate have made clear. As the Minister told us, the number of passengers carried is at its highest level since 1946, the punctuality and performance figures for most train operators are steadily getting better—even the worst performing have improved—and research into customer satisfaction shows that that, too, is higher.

I should like the Minister to consider one measure that could significantly increase off-peak business on the railway, prove extremely popular with those who would benefit, and build on the success of the free bus travel that was introduced earlier this year for the over-60s. The Government should encourage local authorities to say that the travel card, which the over-60s receive for bus travel, can double as a senior citizens’ railcard, not with a view to making rail travel free for seniors but to save them the £24 annual cost of the railcard. The railway would then benefit from some of the travelling that seniors are undertaking now. Although the card is growing in popularity, only about 10 per cent of us who are over 60 have one. There is therefore scope for increasing rail travel among seniors.

I have commented before in your Lordships’ House on how great the contrast is between the time when I worked at the British Railways Board from the late 1970s to the early 1990s, when cost-cutting and retrenchment were the main imperatives, and today. I still remember with a shudder how a senior civil servant from the Department for Transport arrived at the BRB as a board member and announced to his stunned colleagues that he had been appointed “to preside over the orderly rundown of the railway”. Despite that mood, it was possible throughout the 1970s and 1980s to resist repeated suggestions to reduce the size of the network. Thank goodness that we did so. If we had not done that, we would have lost routes such as the route from Settle to Carlisle, to which the noble Lord, Lord Lyell, referred—an attempt was made for many years to close that line—and scores of others that now are essential passenger and freight lines, and we would not have had a network capable of handling the increased traffic on the railway today.

As the debate is about the future, I will not spend too long down memory lane, but I cannot resist making the point that if the Treasury had allowed the publicly owned railway the same amount of financial support as today’s railway receives, we would have created many years ago the finest railway in Europe. The levels of support that the old British Railways Board received were tiny compared with what the railway receives today.

There are many challenges for my noble friend and he has his chance to secure his place in railway history. He starts with the latest ORR determination, to which the noble Lord, Lord Bradshaw, referred. It is a reasonable way forward. As noble Lords can imagine, on the Cotswold line we are delighted with the decision on redoubling and we hope that my noble friend, as a former committee member of the CLPG, will come and celebrate with us on a suitable occasion very soon. However, as the noble Lord, Lord Bradshaw, said, he will have to cope with those who have lost out in the determination, such as the good people of Kemble, the reinstatement of whose track to Swindon was not included in the document. Their local government representative in Gloucestershire, when I met him on Monday, asked me to pass on his unhappiness to my noble friend today, and I do so.

The other point to bear in mind about the ORR determination is that the forecasts on which it is based are about half the level of growth that is currently being experienced. So the problems of overcrowding in the future will be considerably greater if this growth continues and if capacity is not increased. One way to increase capacity is to reopen stretches of line which should never have been closed, such as that from Uckfield to Lewes in Sussex, to give an alternative route to Brighton from London, and at least the Oxford to Milton Keynes section of the east-west line which used to go on to Cambridge. That would become an even better proposition if Chiltern Railways’ very imaginative plans for a new Oxford to London via Bicester service come to fruition.

I hope we shall hear some good news from my noble friend next year about electrification. There needs to be a combination of filling in the gaps, such as from Preston to Manchester, from Leeds to York, up the midland main line north of Bedford and, indeed, from Aberdeen to Edinburgh, as the noble Lord, Lord Lyell, said. There needs to be an imaginative approach to the big projects, such as the Great Western main lines out of Paddington to South Wales, Bristol and the west of England, and the north to west lines from Leeds to Sheffield and down to Birmingham and Bristol.

I sense that the mood has changed in the Department for Transport. There were some encouraging comments earlier in the year from the former Secretary of State, Ruth Kelly, but I stress that if we are going to commit ourselves to electrification it will be for control period 5—that is, after 2014—and the work must start soon.

The case for electrifying an expanding railway is absolutely unanswerable. It makes so much more sense to use a fuel which can be derived from a variety of sources rather than rely on a single type of fossil fuel. Electric trains are lighter and use less energy than diesel trains and, with regenerative braking, which has recently been introduced on the west coast main line, there can be energy savings as well. In the case of the west coast main line new trains, there are energy savings of up to 18 per cent.

Unlike the noble Lord, Lord Bradshaw, I am strongly in favour of high speed 2, the new railway line which starts in London, goes to Heathrow Airport, up to Birmingham and on to Scotland with branches to Manchester and Leeds. That would produce journey times of 40 minutes from London to Birmingham, one hour 25 minutes to Manchester, one hour 20 minutes to Leeds and two and three-quarter hours to Edinburgh and Glasgow.

I sense that there is a growing political consensus in favour of this, which must be linked to a decision to abandon airport expansion in the south-east of England, particularly the third runway at Heathrow. My noble friend will recall that at Oral Questions on 10 November I welcomed the Conservative Party’s conversion to this way of thinking. In reply to me he said that the number of internal flights that could be saved was,

“fewer than 3 per cent”.—[Official Report, 10/11/08; col. 431.]

He said that because the Conservatives’ plan appeared to be only for a high-speed line to Manchester and Leeds.

That is a fair point, but I want to see a new line to Scotland that reduces journey times to less than there hours. With that in place, it would not just be the Manchester and Leeds/Bradford journeys that would be made by train rather than plane, but those to Glasgow and Edinburgh as well. If you add to those the trips to destinations in continental Europe that could be reached easily by high-speed train—Frankfurt, Amsterdam and Cologne, for example, as well as Paris and Brussels—you could have a future where most short-haul journeys of up to, say, 500 miles were undertaken by train.

Well over one-third of the flights currently using Heathrow, around 200,000, are to short-haul destinations in the UK and Europe. Paris remains Heathrow’s top destination, with more than 50 flights on a typical day. It is those flights that are clogging up the airport’s runways, and most of those journeys could be made more easily and in a more environmentally friendly way by high-speed railway. The Conservatives are right to abandon the third runway, and I shall say so next week if the government announcement is made on the subject. I hope it is possible that we can achieve some sort of cross-party consensus on the need for the high-speed line as well, provided that they will look at the requirement for it to go on beyond Leeds and Manchester.

The ability of high-speed rail to capture these markets from air is not in doubt. Eurostar now has more than 70 per cent of the market between London and Paris and more than 60 per cent of the market between London and Brussels. The air service between Paris and Brussels has ceased since the train journey was reduced to about an hour. Rail used to hold only 22 per cent of the combined Paris-Marseilles air/rail traffic before TGV Mediterranean went into service in 2001, but in five years the market share for rail has risen to 69 per cent and easyJet has abandoned its Paris-Marseilles flights altogether. In the UK the improvement on the west coast route, without a new line, has led to rail taking 20 per cent of passengers from the airlines and increasing its share of the market to 60 per cent.

The tipping point, traditionally, has been a journey of three hours, but that threshold has recently been increased to around four and a half hours for business travel. The French railway SNCF has found that on journeys shorter than that, where its trains compete with airlines, its share of the market rises rapidly to more than 50 per cent. That is backed up by other European rail companies, which are capturing more than 60 per cent of the business market from airlines on four-hour journeys. Comparative figures about the time a journey takes, however, paint only a partial picture. What is more important than the journey time, particularly to business travellers, is how productively the time can be used, and it is here that rail can have a big advantage. I suspect that is why I see many more of your Lordships and Members of another place on the trains from Edinburgh and Glasgow—and even Dundee—to London than I used to.

Finally, I shall refer to some other railways that have not yet featured in this debate—the heritage sector. It is responsible for 13 million passenger journeys a year, has a turnover of £60 million a year and contributes £150 million directly and indirectly to the nation’s economy. I have three points to make. First, I thank officials at the Department for Transport for the support they give to my colleagues and me on the Railway Heritage Committee. We take seriously the responsibilities that have been given to us by Parliament to,

“secure the preservation of evidence which is significant to the nation’s railway history”.

The department has recently concluded a major programme of consultation on how the RHC’s scope can be updated and expanded to take account of recent changes in the structure of the industry. An order is now likely to come before the House early in the new year. There is no need for me to say more about this now, other than to say thank you.

Secondly, I thank my noble friend for the interest he has taken in the threat facing one of the oldest and most special industrial light railways in the south of England, the Sittingbourne and Kemsley. I would not want at this stage unnecessarily to antagonise the Finnish owners of the land on which the railway sits as negotiations are continuing but I hope that, from the avalanche of representations that it has received, the company called M-real now appreciates that we in Britain are deeply attached to our railways and we will not sit by and let their rails be ripped up just to satisfy the profit hunger of property companies.

The third matter will be the subject of a further letter that my noble friend will receive from me next week. It concerns the Birmingham Railway Museum Trust, which is based at the old GWR depot at Tyseley. It is an educational charity that provides a main-line vintage train experience and an equipped workshop serving the heritage railway movement. It has particular problems with its landlord and with rent. The work that the trust does in teaching young people engineering skills is very valuable.

I endorse what other speakers have said, including my noble friend. These are great times for the railway. There are some huge challenges ahead and some great opportunities, particularly for him as the most enthusiastic Transport Minister we have ever had in this House who clearly wants to leave his mark on the railway. Public opinion will be very much on his side if he can use his time in office to grow the railway and enhance its popularity. I wish him well in that, particularly in his role as chair of the network strategy group, because that could produce a new railway for the new century.

12:36:00

The Earl of Glasgow
My Lords, it is a great pleasure to be following the noble Lord, Lord Faulkner of Worcester, for once; normally in these railway debates he follows me. I agree with a lot of what he says, although I am not quite so optimistic as he is on the state of the railways. In fact, when considering the present and future state of the railways in Britain, some of us feel close to despair.

Successive Governments have allowed our network to get into an undeveloped state, mainly through lack of investment. This is particularly shaming when the network is compared with the standard of most other European countries. Why have successive Ministers of Transport not given us hope that things really are going to get better in the future? After his introduction to this debate I am hoping that the Minister today will be the one to do so, but we must still await results.

Surely it is evident to everyone by now that the railways are the only possible solution to our transport problems. Trains are the only relatively carbon-free means of transport, unless you count the bicycle. They are not subject to congestion, except sometimes when trying to enter one of London’s termini during the rush hour. They are the safest method of travel, for short distances anyway. They are the fastest way of getting from A to B for any journey of 200 miles or so, and if we had high-speed trains they would be the fastest over 500 miles. More important to those of us who value quality of life, however, they are, or should be, the most civilised and stress-free form of travel. Congestion on the roads and at airports have forced more people to travel by rail—not, I suspect, because like me they are seeking a better quality of life, but because the frustration and aggravation of finding places to park their car have proved too much for them.

We are told that in the past 10 years train travel has increased by 50 per cent. To most passengers, and I believe the majority of these are daily commuters, the journey is still an ordeal. Although some improvements have been made by the train operators in the past few years, rail journeys are still unreliable and usually uncomfortable. Overcrowding on some train services is still a disgrace. Worst of all, they are getting more  and more expensive. The fares here are considerably higher than those for comparable journeys on the Continent. Those adverts telling you that you can get a return fare from London to Scotland for something like £45 are particularly irritating and misleading. What must you do for such a cheap fare? Take a particularly slow train at a time when no one else wants to travel and book a year in advance? Travel by train should be a convenience, not a complicated item of advance planning.

The Government assure us that they are in the process of improving the existing network, and to a limited extent I believe that they are. Better signalling is being installed to allow more trains to travel on any one line. Longer carriages and longer platforms should help ease overcrowding, although I am still rather shocked by how long it will be before we get these new carriages. There will be a mile or so of extra track here and there to relieve bottlenecks, and improvements to stations such as Reading and Birmingham New Street. God, Birmingham New Street is a dreary station. Can we not get Richard Rogers or Norman Foster or someone like that to look into it?

All this is good news in itself, but it is nothing like enough. Even in the immediate short term, there is a lot more to do. We need a more regular and frequent service in many rural areas, whose people must otherwise rely on usually unreliable privatised bus services. We need safer rural stations, which the Minister has alluded to, where, for instance, women returning from the city on dark nights can feel assured that they will not get mugged. We need safer car parks at these stations and enough parking spaces. But even if they were to be acted upon, these short-term improvements, although welcome, are mere window dressing in comparison with the fast-approaching future threat to the railways. Something must be done urgently; the problem is that we are running out of capacity.

With passenger numbers increasing, we are told, by more than 8 per cent a year—it could be more—we need more railways, and that means more railway lines. Various bodies, as well as Network Rail, have identified the most pressing routes for new lines but as I understand it, as yet there are no plans for any new lines, let alone a high-speed rail line from London to Scotland, the one that the noble Lord, Lord Faulkner, and I are so keen on. The Government are not even going to consider that idea until 2014, although the Minister suggested that there may be a decision before then. I do hope so.

A high-speed train going at 185 mph or more would not only help to solve the capacity problems on the existing lines but make polluting internal plane travel unnecessary. The fastest train I can get from Glasgow to London takes four and three-quarter hours. If there were a train that took three hours, I would no longer need to take the aeroplane which, including checking in and out of airports, takes about three hours.

Nearly every other European country has high-speed trains. Spain, for instance, has a train from Madrid to Malaga and from Madrid to Barcelona that takes two and a half hours, and both are longer distances than from London to Glasgow. All we have in this country is the 80 miles from St Pancras to the tunnel, and if it were not for the French and the tunnel, we would probably not even have that. For goodness’ sake, we were the country that invented the railways.

Even if we did get the go-ahead in 2014, the earliest we could expect to see high-speed rail from London to Glasgow in operation would be 2025, and I think that that date is optimistic. By then, God knows what the state of our existing railway network will be. Anarchy may have broken out on the roads and Ryanair might be flying passengers from Stansted to Bristol.

Time is running out. Let us hope it is not already too late. The Government must show some vision. A larger as well as an improved network is essential for the future. It is not an option. And the money for it has to be found somewhere.

12:43:00

Lord Rosser
My Lords, I, too, thank my noble friend for providing the opportunity to discuss the current and future prospects of the railway industry. I declare some interests: an involvement in Rail Freight Group visits, as set out in the register, and as a member of the All-Party Group on Rail.

We have had, as has been said, more than a decade of unprecedented growth in passenger and freight traffic. Passenger kilometres, as the Minister reminded us, are greater than at any time since 1946, on a network that is nearly half the size that it was then. Ninety per cent of passenger trains reach their destination on time. Rail is the safest mode of travel in Britain measured in terms of passenger kilometres. Over the past five years, Network Rail has improved the efficiency of operating, maintaining and renewing the network by nearly 30 per cent.

According to the Office of Rail Regulation in its latest report, when Network Rail took ownership of the rail infrastructure from Railtrack in 2002, it faced a network where costs had spiralled and delays were far above the levels of a few years before, when the railways were publicly owned—hardly an advert for the benefits it was claimed that privatisation would bring to the railway industry. Since 2002, Network Rail has achieved a great deal in rectifying the problems it inherited. However, the Office of Rail Regulation will be expecting Network Rail to achieve a further 21 per cent improvement in operating, maintenance and renewals efficiency by 2013-14. Even that 21 per cent is only two-thirds of what the Office of Rail Regulation considers to be a reasonable view of the current efficiency gap between Network Rail and other infrastructure managers, including those in other countries with highly developed railway networks.

As we know, passenger and freight traffic is expected to continue to increase significantly, with Network Rail needing to deliver projects across the network to handle passenger demand growth of some 22 per cent and a 30 per cent growth in freight over the next few years.

Considerable investment has, of course, already been made in the industry, not least by the Government, and further major projects have been given the go-ahead, such as Crossrail, Thameslink and major improvements at Reading and Birmingham New Street. There will also be many smaller scale schemes, including 500 longer platforms to accommodate longer trains. The scale of the enhancement programme in the five-year control period commencing 1 April next year will be more than twice the level in the current control period. But since it takes some time to develop and give the go-ahead for major projects, I hope that active consideration is being given to further major investment, not least to the electrification of existing routes and the construction of more new high-speed lines following the full opening of the new line to the Channel Tunnel. High-speed lines should not just be for people trying to flee the country or get into the country.

With the present economic downturn, it is quite likely that the recent growth in passenger and freight traffic will slow down or even go into reverse. I want to raise a few points about that later. However, such a development is likely to be relatively short-lived and ought not to colour judgments over future long-term investment in the rail industry, since all the indications are that current growth trends will continue and the capacity problems which we already have on some routes and in some locations will intensify and become more widespread if major investment does not continue. The population of our nation is, after all, expected to continue to grow, and with it the demand for travel for leisure and non-leisure purposes. That demand will have to be met in part by rail travel in view of the justified hostility to building more and more roads; the costs, particularly to business, of road traffic congestion; the enhanced contribution that rail can make compared with road and air travel in reducing emissions; and the contribution that rail, particularly electrified lines, makes in reducing our dependency on fuel from countries of, shall we say, uncertain friendliness.

The relatively recent reduction in journey times and associated increase in train frequencies on the west coast main line, which is not a high-speed line as such, has resulted in a significant increase in passenger traffic, once again illustrating the point that reducing journey times increases rail patronage. The Minister has said that service frequencies on the principal routes on the west coast main line are shortly to be further enhanced.

The approach that we have taken up to now has been to increase the speed of conventional trains on the InterCity routes to 125 mph using conventional signalling. This has produced significant improvements and has no doubt been influenced by considerations of costs and a feeling that since most of our major centres of population are within 200 miles of each other, 125 mph trains provide good enough journey times.

While high-speed electric lines use more electricity than lower-speed lines, the cost of building a new high-speed line is not that much more than building a conventional line. The reality is that continuing growth in demand for rail will need new lines to relieve the most congested routes or expensive and potentially disruptive programmes to increase capacity on existing congested routes or, most likely, a mixture of both. However, if we want to maximise the number of people who switch from travel by car, we need high-speed lines with significantly reduced journey times for our principal trunk routes. Such lines, provided there is a sensible fares policy, would also increase the amount of leisure travel by those who would not have travelled at all.

With passenger demand for weekend travel continuing to grow there is an increasing need for the railways to be open for business longer, with a consequential need to find more efficient ways of managing the infrastructure to avoid lengthy and extended line closures or delays which add considerably to journey times, to the detriment of both passenger and freight traffic.

Other transport modes are continuing to reduce their emissions through the use of new technology, and rail also will need to address the issue of improving its environmental performance if it is to maintain its environmental advantage. Is the Minister satisfied that there is sufficient investment in research and development by and for the railway industry, both now and projected for the future? In 2006, the then chief executive of the Association of Train Operating Companies said:

“Technology, which has come to the aid of productivity in many industries, has done little for the railway”.
 

Does the Minister agree with that point of view? If the industry wants to take full advantage of the opportunities that it now has, a comprehensive research and development programme will be vital to address rather more than just the two issues that I have just mentioned related to better management of the infrastructure to avoid closures and delays and the need to maintain the environmental advantage of rail.

Does the Minister believe that the current arrangements for the provision of rolling stock through the rolling stock leasing companies are sufficiently flexible in terms of availability of rolling stock and charging to enable quick responses to increased passenger traffic on particular routes, or specific services on particular routes, by the provision of additional coaches and better-quality rolling stock to meet that demand? As has already been said, we seem to have issues with overcrowded trains on some routes or some specific services which seem to continue for a long time and to be incapable of quick or early resolution even when the constraining factor is not platform lengths that preclude an additional carriage on a train.

Many of my comments have been related to Network Rail. However, it is obvious that the train operators, too, have a key role to play in securing increased patronage at a time when customer expectations for reliability, safety, comfort, standards of service and value for money are also increasing. According to the most recent survey by the railway watchdog, Passenger Focus, the percentage of passengers nationally satisfied with their journey overall was 80 per cent, which reflects on the performance of both Network Rail and the train operators. However, the specific satisfaction rates which scored least well were those over which the train operators would appear to have had the most control. These related to toilet facilities, availability of staff on trains, how well the train company dealt with delays, and the value for money of your ticket. The national satisfaction rates for those four items were 35 per cent, 38 per cent, 34 per cent and 40 per cent respectively. There would seem to be some scope for the train operators to raise their game in certain areas, which will be essential if the industry is to maximise the opportunities that it now has.

I should like to raise one or two points about the current position of the railway industry and the impact of an economic downturn. If there is a significant economic downturn, as seems to be widely predicted, it will be the first occasion since the railway industry has been in the private sector, and to that extent we could be entering unknown territory. One of the Government’s objectives is to achieve a further reduction in the level of taxpayer subsidy after the substantial increase in taxpayer support that followed the decision to move the industry into the private sector. The Office of Rail Regulation has made it clear to Network Rail that it must achieve more with the financial resources at its disposal. Likewise, the terms on which train operators have decided to bid for and have secured franchises have been based on financial projections based on assumptions that they will either sustain or increase passenger numbers. In some cases the company running the franchise will have agreed to pay money to the Department for Transport over a period of years in return for the right to run services over what will be deemed the more lucrative routes. In others, the amount that the company said that it required from the department to run services will have reflected a projection in its bid about future passenger levels and thus income.

What will be the position if the train operating companies say that they cannot achieve the anticipated level of passengers because of a downturn in the economy and as a result either cannot pay the Department for Transport the amounts required under the franchise or, for the same reason, need a higher level of subsidy? If he was satisfied that it was all attributable to the effects of a downturn in the economy, would the Minister accept either a reduction in payment from the train operator concerned or pay a higher subsidy to the train operator as appropriate? Or would he say that that was a risk for the train operator to bear and that if the train operator subsequently went bankrupt or withdrew from the franchise, the Government would take over the operation of the services until another operator could be found? Or do the franchise agreements already stipulate that the department will have to accept a reduced payment from the operator or increase the level of subsidy where it is deemed that the reasons why the projected increases in passenger growth and income could not be achieved were outside the operator’s control? Alternatively, will a train operator be told that any financial shortfall will have to be made up by further fare increases and reductions in services, with the burden thus falling on rail users? I hope that my noble friend will give some indication of the department’s likely approach, since it is inconceivable that contingency plans for dealing with such problems are not already in place.

I conclude by again welcoming the Government’s continuing active support which has resulted in a growing and thriving railway industry. The approach by this Government is in marked contrast to the negative, defeatist attitude of the previous Administration, who had no time for the railways.

12:57:00

Lord Berkeley
My Lords, it gives me great pleasure to participate in a very knowledgeable debate. I declare interests as chairman of the Rail Freight Group and a board member of the European Rail Freight Association. I am also secretary of the All-Party Parliamentary Rail Group.

Many noble Lords have spoken about the success and growth of passenger and freight traffic. My figure for the growth of freight is 60 per cent in 10 years. That is because service quality has improved and performance in passenger and freight services is probably the best in Europe, after Switzerland. The noble Lord, Lord Lyell, was very kind about me. It is clear that he knows a lot about Switzerland. They do run a very good train service there.

His and other noble Lords’ comments focused on the problems of capacity. There is a shortage of capacity at the moment, and there will be a much greater shortage in the future. Forecasts that we did with the Freight Transport Association in the summer indicate that, in 20 years, there will be a shortfall of paths on the west coast main line, the east coast main line, the great eastern and many others of somewhere between 100 and 200 freight trains a day, assuming that there is no increase in passenger trains—which is not a very sensible assumption, except for the fact that nobody can say how many extra passenger trains there will be. You can go on making trains longer; you can extend platforms; you can build extra tracks; and you can build new freight lines—as the noble Lord, Lord Lyell suggested. All of those things can help and some of them can be done quite quickly—for example, having four tracks instead of two, although high-speed lines would take longer—but we need to start thinking about it now. I know that the Minister is doing so, and it is very welcome, but we need decisions quite soon because the problem will begin to hurt in the next few years. On the midland main line, for example, I understand that the new service to Corby, which is in all the timetables to start in December, does not have approval for an access right to a path. If it gets approval from a regulator, freight will have to wait and go some other way. The problems have started now.

Freight terminals are equally important. If there are no terminals, there is no freight. I am very pleased by the work that the Minister and my noble friend Lady Andrews have done to include rail freight as well as big railways in the scope of the Planning Bill.

I have just one last reflection on the difference between the UK and our nearest neighbour. Many noble Lords have talked with affection about high speed lines. They are great fun and get you around very fast. They are different here—they would be, because we are a much smaller country and the capacity problem is much greater. But the significance difference that I see between here and somewhere like France is that at the moment our whole network is in a pretty good state, whereas the French railway network, apart from the TGV line, is in a pretty appalling state. I have travelled outside the Paris region by bus because the track was unable to take a train. So we must be careful when we start making comparisons with other countries and hold on to what have been some very good investments by Network Rail in the past few years.

I welcomed my noble friend’s robust statement about how the Government cannot interfere in Network Rail. I declare an interest as one of the 100-odd members of the board who are trying to review corporate governance to see whether we can improve it, if it needs improving. I also welcome the work that the Rail Regulator has done in his latest review, to which others have referred. He said that track access charges would come down 35 per cent. That is fantastic, but it would not have happened if the costs had not come down, because there is a direct relationship between the two. I agree with what my noble friend Lord Rosser said—that there are further savings to be made—and I hope that the regulator continues with this.

It is interesting that in Scotland, the new line that Transport Scotland proposes between Edinburgh and the Borders is intended to be operated by an infrastructure manager that is not Network Rail, so that the performance and cost can be benchmarked between them. That is going to be very interesting. It might assist our Rail Regulator in seeing whether efficiencies can come from that. I personally have no appetite for major changes to structure, but small tweaking is necessary, so let us build on the success to date and concentrate on investment and more efficiency.

I have three issues to raise in this debate: on passengers, on rolling stock and on the dear old Channel Tunnel rail link. On passengers, I have an interest in Cornwall, where I am a harbour commissioner in the port of Fowey and have a house. I travel by train as much as I can around there. I add my comments to those of other noble Lords who have referred to the lack of capacity in the rolling stock on some of those services. Devon and Cornwall are seriously important tourist destinations for the UK and a lot of tourists, as well as local people, want to go by rail. However, being squashed into a pacer is a bit like cattle being squashed into a truck on the way to the slaughterhouse, which is not the way to encourage tourists to leave their car wherever they are staying. I urge my noble friend to look at the south-west as well as other parts of the country to see whether, certainly in the summertime, more rolling stock could not be found for local services and for some of the services that come cross-country and from the First Great Western line to that area. I know that the Minister’s department has said that some of the cross-country trains can be increased by turning them into 125s, but some of the other trains have been taken away, so it is only a marginal increase. I hope that he will be able to look at that and do something for the tourist industry in that area.

I turn to something a bit more complicated, called homologation. It is to do with introducing new rolling stock on the railways and is part of the single market in railways—open access and interoperability, which I support vigorously. The problem of getting there, however, is quite serious. It is challenging the private sector industry to spend money on innovation when the costs are really getting quite high. To give your Lordships an example, new wagons have been ordered by Network Rail for its own equipment and have been produced for lower-height and container wagons to get under bridges without gauge enhancement. The cost of compliance with the new standards is looking to be from £50,000 to £100,000, which to a private sector company is quite a lot. We find that they are required to fit spark guards to the wheels, in case the sparks from the brakes set fire to the train above it. Sparks can be caused by cast-iron brakes, as noble Lords will know, but it is very difficult to create sparks from composite brakes. I do not think that anybody has ever achieved that, actually—but they still have to fit spark guards. Furthermore, the wheel profiles are different in the UK and the brake blocks have to be different. If you put the new brake blocks on a wagon of a train that otherwise has UK blocks on them, the new brake blocks will stop the whole train, because they have higher friction. That means that they will wear out so quickly that you have to replace them every other week. It is fine if the whole train is like that, but it does not actually help developing new equipment.

The noise has to be tested on all new wagons and coaches, passenger and freight. For some reason, we do not have anywhere to test them in this country, so they have to go by road to the Czech Republic. That probably costs £10,000 in road charges. I mean, don’t we look stupid? I said to Network Rail, “Why don’t you put a microphone beside the track?” Somebody in a government department said to me, “Actually, you can’t do that in this country because the track is so bad that it wouldn’t come up with the right answer”. I am not sure that I believe that—but the fact remains that having these trains going to the Czech Republic on a road vehicle is stupid, and I hope we can get round that.

This is a big transition issue for the industry, which has to compete on the freight side with road. It is a disincentive to modal shift. I give credit to my noble friend’s officials for their commitment to not only this kind of homologation but another thing that is coming in called TAF TSI. That is a requirement that all train operators, passengers and freight, must introduce IT interface systems between train and infrastructure manager and train and other train in the next five years, or they will not be allowed to run on the network. The good old incumbents on the Continent have come up with the lovely idea that they will introduce all this, develop it and give it to themselves for free and everybody else will get charged an unregulated fee for doing it. Most of the companies in this country, passengers and freight, have not joined this.

Again, my noble friend’s officials are doing very well with the regulator in addressing these issues, but could he do even more with his officials? Not only do these things have to be taken extremely seriously, but our success in this country with the new structure, with the competition and the better service quality and everything, is something that our colleagues on the Continent really want to know about, but they are a little bit uncertain about it, and they need our experiences first-hand from my noble friend and his colleagues rather than from other people who want to tell another story.

My last issue is on the dear old Channel Tunnel rail link, which is now called High Speed 1. We had a big debate here on 13 May, on the Third Reading of the Channel Tunnel Rail Link (Supplementary Provisions) Bill. My comments relate to costs and charges for freight to use the link, for which the consultation is out at the moment. The issue with costs started long before my noble friend was in his post—it probably started before 1997, in fact. The owners of HS1—effectively the Government—have given the contract to Network Rail to operate HS1 for 80 years on a cost-plus basis. I am not a great fan of cost-plus contracts, because people sit back and watch the money roll in. Where is the incentive to reduce the costs when the contract is for 80 years? I do not think it is a very good idea. On the basis that charges relate to costs, I want to see the costs come down so that the charges come down.

In the debate on 13 May, my noble friend said that he was keen for the Government,

“to place incentives on the infrastructure owner continuously to improve the efficiency of operation and we want [to see this] reflected in the relevant subcontracts”.

I think that means he wants to break the contract with Network Rail—I hope he does—and come back with a better one. He continued:

“The Government do not see themselves as the first and best regulatory option”.—[Official Report, 13/05/08; col. 932.].
 

That certainly was not the case at the start. I would say that they were probably the worst regulatory option. I hope my noble friend can now turn that around. I hope that he can inform me of some progress on this, either now or in a letter, because lower costs equal lower charges.

The regulations are quite clear on the principle of charging for freight. Directive 2001/14, Article 8, states:

“The level of charges must not … exclude the use of infrastructure by market segments which can pay at least the cost that is directly incurred as a result of operating the railway service”.
 

To me, that means marginal cost plus a mark-up on what the market can bear, if it can. I do not think that the CTRL people are saying that they should have fixed costs added to this. They published a network statement on Monday—about three years late—which said that the infrastructure managers,

“will calculate freight charges on the basis of the long run incremental cost”.

In other words, “We are doing that, and to hell with whether it is legal”. That needs to be challenged.

Secondly, the document has no basis for calculating the costs. The managers say that the cost is £9.25 per train-kilometre. There is no justification for that: that is what it is, like it or lump it. The cost is £14.80 per train-mile, compared to Network Rail’s £2.50 a mile, as required by the regulator—it is six times the figure. When road freight is the market leader, you cannot just multiply the access charge by six and say “That’s it”. There would be no traffic at all. I hope my noble friend will look at that and see whether we can get some common sense. I believe that the charges are illegal under Directive 2001/14. I do not think, as my noble friend Lord Bassam said, at col. 929 of Hansard, that this is encouraging greater use of the line. To me it certainly is not. I do not think that it puts the Government in a very good position as a regulator because no freight will use the line as it is. There were plans for freight for the Olympics to come up that line. I believe that it is a barrier to trade.

The Government are about to receive a letter—perhaps my noble friend can confirm whether they have already done so—to say that the European Commission is starting infraction proceedings for non-compliance on this network statement. I hope I do not have to do this, but unless my noble friend can give me some answers—I do not expect them today as it is a bit complicated—I shall encourage the Commission in that.

My noble friend spoke warmly of the £200 million strategic freight network for freight, which is really good news and which I welcome. He said that it makes a good connection to hubs and international gateways. The Channel Tunnel is the only international gateway connected by rail, and I do not think that he will see any trains on his strategic freight network going through the tunnel, unless that gets changed.

Enough of that gripe. I apologise to my noble friend for the length of it. What we are all saying in the debate—certainly what I am saying—is that we have had a lot of change but, for me, change never goes fast enough. However, let us look at the significant improvements to passengers and freight and the quality of the network achieved. Service quality and performance have been dramatically improved. Forecasts of growth—I do not know whether they slow down—are a nice challenge. I am sure that my noble friend and his team will meet that challenge and that we will move forward to see the growth and the investment necessary to achieve it.

13:44:00

Lord Wallace of Saltaire
My Lords, the noble Lord, Lord Lyell, said that he thought that he was the only amateur in this debate. I declare myself also an amateur among all these rail professionals. I am very grateful to my noble friend Lord Bradshaw for providing me with some very helpful briefing. However, I live in the north of England and I very much want to make a number of points in a debate about investment, which tends to be dominated by the demands of the south and south-east England.

We all recognise how much we have damaged public transport infrastructure over the past 30 years and the structural reasons for that. I was talking to the Minister informally the other day about the structural bias of transport economics against rail, which I have experienced as an academic on a number of occasions. I hope we are now at least beginning to move away from the structural bias of the Conservatives, particularly under the prime ministership of Margaret Thatcher, against public transport and in favour of private transport. The whole Anglo-Saxon approach to private and public initiatives, which one sees now in the United States as they become aware of their rail and road infrastructure, is desperately in need of change. I have to say to the Minister that it is wonderful to hear that California is beginning to revive its rail network. In 10 days’ time I shall be taking the train from New York to Boston through several states. I have allowed for it to be half an hour late. The last time I went from New York to Washington by train it was nearly an hour late. When the United States actually starts to deal with its east coast main line, we will know that it has begun to catch up with the shift in assumptions about public and private.

I welcome the Minister’s opening speech. I am only sorry that it has taken the Labour Government 11 years to reach the point that we hope we are at. I note the thinness of the Conservative contributions to the debate, and I fear that that also represents the thinness of Conservative policy on public transport. We have seen a whole series of missed Opportunities over the past 20 or 30 years. New road-only bridges have been built over the Humber and the Severn when on the Continent they have been building combined bridges for road and rail. Airports at Manchester and Heathrow have been built without through rail connections in sharp contrast to Schiphol, Charles de Gaulle and Frankfurt. These things are all going to be costly to revise. Privatisation was very badly mishandled with large sums paid to consultants and unnecessarily expensive arrangements for the leasing of rolling stock and for PFI. There was the abandonment of the electrification programme and the odd situation in which we have privatised our railways by allowing state-owned companies of others to buy into them. When I wanted to talk about the Leeds to Skipton railway line I had an interesting conversation with an executive of Netherlands rail the other week—NedRail is a part owner of Northern Rail. The same applies to the state railways of Germany and France.

The revival of rail travel over the past 10 years has been as strong in the north as it has been in the south. There has been a 40 per cent increase in Yorkshire in the past 10 years, and Network Rail is talking about an anticipated rail increase of up to 50 per cent in Yorkshire and across the north of England over the next 10 years. As regards CrossCountry trains, I cannot remember a time, whenever I get on a train from Leeds to Newcastle, York, Sheffield or Birmingham, when people were not standing in the train. As regards the Skipton to Leeds line, which is my local railway line, it is impossible to get on at Saltaire between 8.30 and 9 o’clock in the morning. The Harrogate to Leeds railway line, a marked commuter rail line, still uses Pacers that were cascaded—that lovely term in which stock moves from the south of England to the outer regions of the country. It means that if you try to go from Leeds to Morecambe or Shrewsbury to Aberystwyth, or even Leeds to Harrogate, you still use these funny things, which were disbarred from the south-east many years ago.

Lord Berkeley
My Lords, I remind the noble Lord that we have never had Pacers in the south-east.

Lord Wallace of Saltaire
My Lords, I thank the noble Lord. In that case, no one in the south-east would ever have put up with them.

The revival of freight on the railways is also immensely encouraging, but we are already up against capacity limits. My London-Leeds train the other Friday was held up for some time because there were two freight trains on a double-line section of the east coast main line in front of us. I assure the noble Lord, Lord Lyell, that the Settle-Carlisle line is now heavily used, including at weekends. Now that I have a shared allotment in Saltaire, just alongside the Settle-Carlisle railway line, I see the number of trains that go past us.

The absurdity of privatisation as a basis for higher public investment has been well remarked upon by others in the debate. The case for public investment in rail is now strong. There are four rationales: first, to meet this rising public demand; secondly, to reduce carbon emissions as part of the climate change debate; thirdly, now, to revive the UK economy through long-term public investment, in which public infrastructure investment is clearly important; and fourthly, as an aspect of spatial strategy and regional policy, to assist economic development outside the south-east.

Last Friday, we had a debate on a report from the Economic Affairs Committee on immigration, and a number of noble Lords were talking about the threat of a rising population concreting over the south-east. Well, we are doing pretty well at that, with a four-lane M1 and five-lane parts of the M25. If we do not want to concrete over the south-east, we must also think about how to improve communications between the north and the south, and across the north.

I have a number of questions for the Minister. First, have the Government now committed themselves to resuming the rolling electrification scheme? That was not entirely clear from the Minister’s opening speech. Secondly, will the Government also commit to what I suppose one must call a rolling programme of rolling stock and investment in increasing the capacity of carriages on the whole railway network? Thirdly, will the Government ensure that investment in rail improvement benefits the entire United Kingdom, not just the south-east of England?

As the Minister will know, the intensity of rail transport across the north of England—Liverpool to Manchester, to Leeds, to Sheffield, to Newcastle—is an important part of how the north holds itself together. Train times are longer for comparable distances there than in the south-east. The problem of improving city regions around Manchester, Leeds and Liverpool is tied up with improving the quality of regional commuter rail in the Manchester and Leeds regions. It is also an issue for rural rail. The future of Airedale and Wharfedale certainly depends upon what are becoming commuter lines. The Minister will also know of the proposal that Wensleydale be again linked into the national railway system, which depends on the enthusiasm of a number of local rail enthusiasts to keep the line open and investment to link the line up at Northallerton.

The quality of rolling stock is limited and we need more coaches. There are many gaps in electrification across the north that could be filled relatively easily in the early stages of a rolling programme, increasing both freight and passenger capacity. I am told by Network Rail that a number of electrified lines have inadequate loading capacity, so that when National Express wishes to increase the number of direct trains running between London and Skipton, and when Northern Rail wants to increase line frequency, the electricity substations will not bear the load. There are a large number of issues on heavier investment.

I remind the Minister of light rail issues. Manchester and Sheffield both benefit from their existing and developing light rail scheme, but the Treasury blocked Liverpool and Leeds from using light rail schemes to integrate city regions. At the end of September, Network Rail produced a blueprint for investment to improve rail across northern England. It is putting this to the Government and now needs government funding.

We want investment across the whole of Britain, not just across the south-east. Investment in rail is a matter of regional policy and national spatial strategy. Investment in improving and upgrading the east coast main line is not an alternative to a new high-speed line, which will take many years to plan. It could be undertaken now. Some of the schemes are already approved, but not yet funded, as a means of helping to revive our public economy. I hope that, in winding up, the Minister will be able to reassure us that this is indeed what the Department of Transport is planning, and what the Treasury will begin to respond to.

Lord Adonis
My Lords, I took the noble Lord, Lord Bradshaw, to be saying that his proposals for significantly upgrading the east coast main line were an alternative to creating a new line. Did I mishear the noble Lord?

Lord Bradshaw
My Lords, no. I said that a new high-speed line will inevitably take a long time to come to fruition because of planning troubles and the work. However, we could immediately set about upgrading the east coast main line and have an attractive service. That might undermine the benefits of a high-speed line but one must go for the immediate benefits, which are attainable in the very short term.

Lord Wallace of Saltaire
My Lords, I entirely agree with my noble friend. We support the principle of a high-speed line, but the planning system in this country, even after the Planning Bill has been enacted, means that it will take some time to get under way. The plans are all there, but we need investment in upgrading the east coast main line, which could be well under way within two or three years.

13:27:00

Earl Attlee
My Lords, I thank the Minister for introducing the debate today. For myself, I am interested in the long-term future. I do not intend to debate history. The Minister gave us a fair analysis of the history of our rail system. He also paints a picture of success, and he is right. When one looks at the graphs, they mysteriously start going in the right direction shortly after privatisation. Despite the comments of the noble Lord, Lord Bradshaw, something seems to have gone right at that point.

The Minister mentioned the InterCity express project that will be dual powered. Is he not concerned about the extra dead weight that will have to be hauled around the country? Would it not be better to fill in the gaps in electrification, as proposed by the noble Lord, Lord Bradshaw, and others?

The Minister mentioned ticketing problems. I, too, have been caught in exactly the same way at exactly the same station. What can be done in the long term to obviate the antediluvian need to buy a ticket? Does the Minister see a future for greater coverage of the Oyster card system, or perhaps something even better?

The noble Lord, Lord Bradshaw, and many others raised the issue of the 1,300 carriages. Does the Minister accept that he urgently needs to place orders to industry? If he does not, the manufacturers’ subcontractors may not exist.

The noble Lord, Lord Rosser, made some extremely important points regarding revenue risks for the TOCs. If our worst fears were realised, something would have to be done. The TOCs are already competing on how much revenue risk they will take. If the Minister does not manage the downturn correctly, he will significantly increase the costs associated with revenue risk. I deeply regret the final comment of the noble Lord, Lord Rosser, which I did not find particularly helpful.

The nub of the problem is clear: our railway system does not have the capacity to carry even the number of passengers wishing to travel now, let alone the numbers expected in the future. The Government have accepted that demand for rail is set to grow, but seem to fail to appreciate that this trend is not only unavoidable but is welcome and is to be encouraged. When they issued the rail White Paper, the Government believed that it set out the strategic direction of the network. It was claimed:

“The White Paper looks at the potential future challenges for the railway over a 30-year horizon. It identifies three long-term agendas for Government and the rail industry working in partnership: increasing the capacity of the railway, delivering a quality service for passengers, and fulfilling rail’s environmental potential”.
 

At the time, many commentators complained about the paper’s paucity of ideas and its aim, in effect, simply to manage growth and restrict demand and capacity, mainly through increased fares for passengers.

I note the comments of the noble Lord, Lord Adonis, regarding the future and I wish him all the best for his work on his national network strategy group. Where we think that initiatives will make a real and positive difference, we will not hesitate to support them. We still see operational problems with Network Rail and we pray that the new year and Easter engineering fiascos are not repeated with this season’s maintenance programme. The Minister will have to pay close attention to that, and I think that he will do so.

Many in my party believe that we need a fundamental review of the structure and governance of Network Rail to ensure that it is responsive to industry, customers and passengers. We need to encourage train operators and the private sector more generally to make long-term investments. To do that they need certainty, and to deliver it a Conservative Government would review the length of franchises. Common sense suggests that franchises deliver certainty and facilitate greater levels of investment as the costs can be recouped. It is not just a matter of the capital cost of setting up the franchise but of staff training costs and, in particular, bid costs, which are very high indeed. The new southern franchise is just five-and-a-half years. Does this really make sense? We will look at franchise length, and if a longer rail franchise makes sense in terms of what the operator needs to be able to deliver, we shall have no qualms in offering it. These types of arrangements would give operators the certainty they need to deliver the investment, capacity and performance for which passengers are crying out. However, with these longer franchises, with review periods built in, would come more effective remedies to deal with an operator that fails its customers. The Minister touched on some of the actions he has had to take with regard to a below standard TOC.

The Conservative Party has a transport team down the Corridor led by Theresa Villiers, which has been considering all these matters very carefully. It has a vision. It does not think that it is good enough for our people to have to stand on intercity journeys, nor that it is right to use short-haul aviation when we could provide a far better rail alternative given that short-haul aviation incurs high embarkation and disembarkation costs and constitutes poor use of business users’ time. Air travel does not take travellers to the heart of the city, where they generally want to be, and worst of all, short-haul is relatively more polluting than long-haul aviation, and far more so than train by orders of magnitude.

We understand the problems of the noble Lord, Lord Berkeley, and the rail freight industry. It is very hard to find extra train paths because our rail system is already running at over capacity. We do not think that it is enough to undertake some big projects, such as redeveloping Reading and Birmingham New Street stations, welcome though they are—the Minister touched on those projects in his opening comments—as we know that we will still run out of capacity if we succeed in increasing the GDP per capita in the long term. We want to bring millions of citizens in Birmingham, Manchester and Leeds closer to the centre of the UK and closer to Europe, a point made by the noble Lord, Lord Faulkner.

Lord Wallace of Saltaire
My Lords, I apologise for intervening, but is the noble Earl implying that London is the centre of the UK when he says that he wants to bring Birmingham closer to the centre of the UK?

Earl Attlee
My Lords, many noble Lords referred to the concentration of the economy in the south-east. That is what we want to avoid.

These citizens need to be connected, not just electronically but physically, if they are to reach their full potential. My honourable friends do not want them to be isolated or limited in their economic activity. Their vision is high-speed rail and I hope that, over the coming months, I can encourage the Minister to share that. I am grateful for the comments of the noble Lord, Lord Faulkner of Worcester. We disagree on some of the detail but I strongly accept the vast majority of his arguments. We on these Benches have been committed to high-speed rail for some time. The planning and tendering process will take five years, and construction a further 10; it will not be quick. However, HSR will be the age of the train yet again.

Lord Faulkner of Worcester
My Lords, I am grateful to the noble Earl for that comment. Can he confirm that his party is willing to take on board the point that I made; namely, that if the plans for high-speed rail are confined just to a line from London to Leeds and Bradford, but that the benefit would flow from having a line to Scotland, the transfer of traffic from air to rail will not be achievable?

Earl Attlee
My Lords, I fear that the noble Lord is asking me to comment in a little bit too much detail about HSR beyond Manchester.

As noble Lords would expect, I do not agree with the objections to our thinking expressed by the noble Lord, Lord Bradshaw. It is not “either/or”, our national rail system and HSR need to be enhanced. The Government have repeatedly failed to take steps to preserve disused lines, despite many warnings from the noble Lord, Lord Faulkner, the Transport Committee and Network Rail. The Government are “keeping an open mind” on whether they should safeguard this capital stock. Perhaps the Minister could explain why the Government will not immediately adopt the Conservative proposal to impose a two-year moratorium on the sale of disused lines in order to prevent the elimination of future developments.

The Government’s continued hesitancy to consider a high-speed rail link is a continuation of a transport policy that not only fails to deliver current targets but would be completely unable to meet the needs of the future. Our railways have a proud heritage and could have a bright future, helping us to meet our climate change and economic development objectives. The next few years will be vital. We need to be imaginative about the changes that may be required to deliver this bright future. We need to harness the ambition and creative thinking that exist within the industry so that it can deliver for us all. This debate has gone one way: high-speed rail.

13:38:00

Lord Adonis
My Lords, I have always made it a principle of action in my time in politics not to exaggerate differences or to pretend that there are differences where they do not exist. I pay tribute to the noble Earl, Lord Attlee, and his party for their marked change of tone on rail over recent months. They have become a great deal more positive about the industry and I strongly welcome that. I hope that over the months ahead it will be possible to build a consensus on a programme of improvement in the rail industry over the next 15, 20 and 25 years with the party opposite and with colleagues in the Liberal Democrats. I sense that we are converging.

My noble friend Lord Faulkner was absolutely right to say that this is a great time to be associated with the railways. He was also right to point out that we had some pretty close shaves in the 1980s with policies that would have significantly harmed the rail network to an even greater extent than happened with the changes that did take place. I remember the Alfred Sherman report, which, as my noble friend will recall, proposed concreting over the entire rail network and running buses and coaches over it. This proposal was taken seriously by so-called free-marketeers in the 1980s, even though it seemed to be from the wild west. 

However, a perfectly sensible report was published, commissioned, I think, by the Department of Transport and possibly British Rail. This was the Serpell report, although it, too, proposed options that could have led to significant network cutbacks in the 1980s. I told the noble Lord, Lord Wallace, in our informal conversation before the debate, that I remember Sir David Steel—now the noble Lord, Lord Steel—making a brilliant speech after the publication of the Serpell report regarding the options that it proposed. The inquiry had put passenger usage numbers through a computer and had worked out that the West Highland line could stop at Crianlarich. As the noble Duke, the Duke of Montrose, is clearly aware, Crianlarich is not a great centre of population but a junction. The computer had worked out that if you stopped the line there, you might get the benefits of the traffic flows from both lines going onwards, without the expense of maintaining them. That was the kind of ludicrous planning that took place in the 1980s in some areas, which could have led to significant further cutbacks in the rail network.

As the noble Lord, Lord Wallace, said, we have a more sensible approach to transport planning. I can assure the House that not only is there a commitment in England to no network closures over the five-year period ahead—a commitment given in the rail White Paper last year—but the Scots have no intention whatever of closing the line north of Crianlarich.

Lord Bradshaw
My Lords, perhaps I may interrupt the Minister while he is doing his little historical thing about Serpell, Sherman and others. A report on electrification was also produced in 1983, which was agreed with the Department of Transport, but it was decided that its proposals would be discontinued—or rather we were ordered to discontinue them. If they had gone through, we would now have an electrified railway system for almost the whole country. Professor Alan Walters was the person who persuaded Mrs Thatcher that the report should be binned.

Lord Adonis
My Lords, that, as they say, was before my time. I welcome the fact that we appear to be forging a new consensus on rail that not only puts behind us the language of decline and past proposals for cutbacks but looks for sustained growth in the years ahead. I accept the various invitations for me to visit and to meet. I will be very glad indeed to meet the noble Lord, Lord Bradshaw, to discuss his ideas for improving the east coast main line. I always seek to give speakers a free rein and rarely intervene. I intervened on the noble Lord, Lord Wallace, because I thought that I had detected the noble Lord, Lord Bradshaw, indicating in his opening remarks that the improvement to the line could be in place of the development of a high-speed line. I was keen to understand the policy of his party, but I look forward to discussing that further when we meet.

My noble friend Lord Faulkner never hesitates to invite me to visit the many extremely worthwhile projects with which he is engaged. I look forward to joining him and his colleagues in the Cotswold Line Promotion Group to celebrate the decision to redouble that line, which will significantly enhance its capacity. I will also be happy to meet him and leaders of the railway heritage sector. I join him in paying tribute to the great work that the sector does, not least for the tourism industry. One of our unique contributions to international tourism has been the restoration of closed and disused railway lines. The work of the railway heritage sector is very important indeed.

I sense that the noble Earl, Lord Attlee, and I will need to go together to Victoria to see how long it takes us to buy a ticket. As I said in my opening remarks, I am keen to see what more we can do to ensure that passengers, particularly in gated stations, are able to buy tickets rapidly. I am keen to look at what further steps can be taken in that regard.

Earl Attlee
My Lords, what about the Oyster card system?

Lord Adonis
My Lords, the Oyster card system will be extended at the end of next year to cover commuter services from south London. Therefore, there will be a single Oyster card system covering all metro lines, including Underground and overground lines south of the Thames. The Mayor of London and I are working closely on this. Discussions are taking place with the relevant train operating companies to ensure that the introduction is smooth and that their commercial interests are adequately catered for. This will reduce the number of tickets that need to be bought at stations and will contribute to a better service for passengers at stations.

Earl Attlee
My Lords, I am extremely grateful for that good news. However, the noble Lord introduced the subject of ticketing and I am interested to know his thinking for the future. Will there be some point when we do not need to buy tickets at all and there will be some sort of Oyster card or automatic charging system, whereby there will be no frustrating delays for passengers when they need to buy a ticket for national journeys?

Lord Adonis
My Lords, I think that it will be quite some time before we get to that position, but we can make changes, including better ticketing machines at stations to reduce the need to queue for tickets. However, I am anxious to ensure that, when passengers need to queue, they are not inconvenienced to an unacceptable degree. I intend to look at that further in the period ahead.

Perhaps I may go to the heart of the issues that we face. I want to make two broad points. First, the current condition of the rail industry is reasonable. The noble Lord, Lord Bradshaw, is generally speaking a fair-minded person and he does not seek to paint a bleaker picture where it is not justified. However, he did so in one significant regard. He said that the big increase in rail usership in recent years had nothing whatever to do with improvements in capacity and was all to do with improvements in the economy. That is simply not the case. Because the noble Lord is far too fair-minded not even to mention the evidence against him, he did, in passing, in an intriguing part of his speech, mention the National Audit Office’s recent report on the letting of rail franchises, which was extremely positive about the way in which government policy has changed. He dismissed the report as being far too optimistic. This was the most extensive independent inquiry into the rail franchising system that there has been in recent years. It was extremely positive about the system and the improvements that had been made to the benefit of passengers. I simply suggest that the report was correct in its findings and that it was right to highlight the improvements that there have been.

There have been significant increases in the number of carriages; there are 11,150 carriages compared with 10,400 in 1995, which is a significant improvement in capacity. The noble Lord seemed to have forgotten that entirely when he said that there had been no improvements. The £8.8 billion of investment on the west coast main line, which has all taken place since 1997, is leading to the significant improvements in capacity that I set out in my speech, including the introduction of the new three-times-an-hour service between London and Birmingham and between London and Manchester. In historic terms, that is truly transformational. I see the noble Baroness, Lady Morris of Bolton, paying close attention to me. I know that she is a regular user of that line, as I have been to Bolton with her. Many people are not aware of how significant the improvement will be when the new timetable is fully implemented and at long last we move past the period of investment in the network, which, I well understand, has led to significant inconvenience to passengers in recent years.

Perhaps I may quote the final conclusion of the National Audit Office’s report into the letting of rail franchises between 2005 and 2007. It concludes:

“The Department’s approach to rail franchising produces generally well thought through service specifications and generates keen bidding competition. This approach has resulted in better value for money for the taxpayer on the eight franchises let since the Department took over from the”,
 

Strategic Rail Authority.

“The Department has been able to gain a commitment to some improvements in quality, reliability, accessibility, security and capacity at the same time as negotiating a sharp fall in subsidy. The combined contracted subsidy of £811 million in 2006-07 should turn into a payment to the Department of £326 million by 2011-12”.
 

That is a very positive picture of improved services that are of direct benefit to passengers.

We saw it again recently in the specification that my department issued for the new South Central franchise. This new franchise specification includes provision for: an extra 118 vehicle arrivals into central London, which is an 11 per cent increase; an additional eight arrivals into Brighton, which is a 24 per cent increase in the morning peak period; the lengthening of many suburban trains from eight to 10 carriages and some trains being lengthened to 12 carriages; increased services in the evenings and at weekends, with some later services on Friday and Saturday nights up to half-past midnight; new Sunday services, such as from Southampton to Brighton; regulated fare increases to continue to be capped at RPI plus 1; improved safety with new gating at around 30 stations and secure station accreditation to cover 95 per cent of footfall; around 1,000 additional car parking spaces and 1,500 additional cycle parking spaces; 30 additional ticket machines and help points to be installed at 20 additional stations, and station travel plans to be developed at 30 additional stations; and all trains—I repeat, all trains—to be fitted with CCTV. That is not for the medium and long-term future; it is the precise specification for the new South Central franchise and will lead to very early additional benefits for passengers over and above those that I have already described.

Taking a fair view of the debate, in my opening remarks I fully accepted that there is a great deal more to be done. My noble friend Lord Berkeley rightly picked up on the remarks that I made about Network Rail and the fact that there is a need to see significant sustained improvements in its efficiency—not simply to save money for the taxpayer but also to ensure a much better deal for those who use the rail network, not least the freight operators, to which my noble friend referred and on whose behalf he does an excellent job in your Lordships’ House. Taking the position as it stands, I think that it is clear that things are improving.

A number of specific points were raised. The noble Lord, Lord Wallace, asked me three questions. He asked, first, whether we are committing now to a rolling programme of electrification. The whole purpose of setting up the National Networks Strategy Group is to work through what our commitments will be, and we will be in a position to make commitments next year. We would not have set up the group if we had intended to make commitments in advance of its work. However, my right honourable friend the Secretary of State made it clear that a rolling programme of electrification is one of the key issues that we will be addressing in the strategy group. I think that the noble Lord, Lord Wallace, will clearly detect from the tone that I have adopted throughout this debate that we are very positively minded about the case for further electrification.

However, it is unlikely that any rolling programme of electrification will avoid the need for intercity diesel trains in the next generation. Therefore, the case for the Intercity Express project, which is intended to ensure that we have both diesel and electric traction capacity for the next generation, and the capacity to move between the two with minimum inconvenience to passengers, remains strong, and we will continue with that programme.

Lord Berkeley
My Lords, I am grateful to my noble friend for giving way. Has he considered, as an alternative to humping great big bits of diesel engine around under the wires, fixing a diesel locomotive on the train when it gets to the end of the wires? Very few lines in this country need the power and acceleration provided by electrification, and the trains can go fast when they get to the end of the wires. These are usually slower lines and it is probable that diesel locomotives could do the job very well.

Lord Adonis
My Lords, I understand that the alternative was fully considered when the Government took the decision to proceed with the IEP programme. For reasons of resilience and given the inconvenience that would be caused to service operators and potentially to passengers, it was decided that the bi-mode option was preferable to simply putting new diesel locomotives on to trains that had been pulled by electric traction in the earlier parts of their journeys.

Secondly, the noble Lord, Lord Wallace, asked whether there will be a rolling programme of stock replacement. I have made it clear that there will be such a programme, with a commitment to 1,300 additional carriages over the next five years. He also asked whether we would favour the north as well as the south with our investments. We are indeed doing so. The upgrade of the west coast main line favours the north as much as the south and, as I set out in my opening remarks, is leading to significant improvements in the services that will be available from 14 December to Birmingham, Manchester and further north. The commitment to the 1,300 additional carriages will see significant improvements in the rolling stock available to, for example, Northern Rail, which, in the latest rolling stock update, is indicated to receive 182 additional vehicles, benefiting Manchester, Leeds, Sheffield, Liverpool and Newcastle local services. Therefore, there are significant benefits for the north and I am sure that there will be others from the £15 billion programme of improvements over the next five years.

Finally, I turn to the wider issue of the Government’s position on the management of the rail industry over the period ahead. I took the noble Lord, Lord Bradshaw, to say that he favoured significant change to the structure of the industry over the coming years. Indeed, he mentioned the need for further legislation in this area significantly to change the institutional infrastructure of the industry. I think that it is only fair for me to indicate to the House that that is not the position that the Government wish to adopt. Our view is that there has been too much institutional upheaval in the industry over the past 10 years and that in recent years we have seen significant improvement as we have brought greater stability to its institutional infrastructure. It is not our intention to promote significant structural change in the industry over the period ahead, although, as I have indicated elsewhere, I am open-minded about the case for longer franchises to give franchise operators a greater stake in the management of, and investment in, the network. We now need to see not further upheaval in the rail industry’s institutional infrastructure but nuts-and-bolts improvements to the network, steady improvements to the quality of the service provided to passengers and an in-depth consideration of the medium and long-term infrastructure requirements of the industry. I believe that that would be hampered if its leadership and governance went through another period of upheaval in the period ahead.

Lord Bradshaw
My Lords, perhaps I may make it clear that I am concerned about the governance of Network Rail. The Government are not able, for example, to require Network Rail to do experiments in vertical integration; that is entirely at Network Rail’s discretion. Nor can the Government control the bonuses that Network Rail pays. I am concerned not with large-scale upheaval but with Network Rail becoming conscious of the fact that it is a public servant and that it should be doing the Government’s bidding.

Lord Adonis
My Lords, I note the points made by the noble Lord, but I reiterate my own point: it is not our intention to bring forward legislation that would engage in another process of musical chairs in the management of the industry.

I do not have time to respond to all the points that were raised. My noble friend Lord Rosser spoke about what happens if franchises fail. If they fail, well established procedures are in place. Of course, in recent years one failed and the department needed to step in as operator of last resort. I believe that we can meet his points in that regard. I shall be happy to correspond with my noble friend Lord Berkeley on rail freight and access charges to the CTRL, although my understanding is that that is still a matter for ongoing negotiation. I know that he has a strong interest in seeing a successful outcome to those negotiations.

In conclusion, I simply reiterate my thanks to all who have spoken and note the general support in the House for the future of the rail industry, beginning with the speech of the noble Lord, Lord Lyell, who painted a very optimistic picture. I see that he is rising to intervene. I will respond to his points. We are making big investments in improving the capacity of the rail freight sector to handle larger containers than has been the case in the past. That was one of his concerns.

Lord Lyell
My Lords, perhaps the Minister will take on board the fact that much of the debate has concentrated on England. The noble Lord, Lord Wallace of Saltaire, pointed to the Keighley and Settle line. The mention of Crianlarich caused great excitement on the Liberal Democrat Benches. It is a very important rail junction, as from Crianlarich the line goes west to Oban and north to Fort William and Mallaig. In times of trouble, God forbid, when one needs serious movements of freight in remote areas, Crianlarich and the line west and north are of particular importance. That is one of my points. No doubt the Minister can write to me.

Lord Adonis
My Lords, I entirely agree with the noble Lord on the importance of Crianlarich. His remarks will have been noted by the appropriate authorities. This has been a very positive debate. It heralds a bright future for the rail industry and I am grateful to all noble Lords who have taken part.

The Earl of Glasgow
My Lords, before the Minister sits down, perhaps I can ask when the Government are likely to make a decision on any new railway line, let alone an actual high-speed rail.

Lord Adonis
My Lords, over the next nine months, the National Networks Strategy Group, which I chair, will actively consider network options, including electrification and the case for new lines. I expect the Government to be in a position to say more next summer.

On Question, Motion agreed to.