Examination of Witness (Questions 680-693)
RT HON STEPHEN BYERS
WEDNESDAY 6 MARCH 2002
680. But how much is the Government itself spending directly on infrastructure projects under the 10 Year Plan then that has not already been committed?
(Mr Byers) It will vary during the course of the 10 Year Plan because it is a flexible document.
681. But what is the total amount? If I am wrong and it is not £4.5 billionwell, let us be clear on the sums. £18.6 billion is what your Department says is the infrastructure investment budget from the public sector.
(Mr Byers) Yes.
682. Of that, your Department has said £10 billion has already been contracted in network grants to Railtrack and the Channel tunnel Rail Link project, which leaves £8 billion yet to be spent. What you are saying is that £3 billion of that money is going to be spent on interest, so there is between £4 and £5 billion left available for the public sector to spend on infrastructure projects during the period of the 10 Year Plan, and the rest is entirely dependent on the private sector.
(Mr Byers) As we sit here today that is a statement of where we are at. However, one of the reasons why we have reviews of the 10 Year Plan is to make sure we are working and going to achieve the objectives we have stated, so there will be no difficulty in reordering our priorities if we felt that was right. We still have £8 billion or so of unallocated provision within the 10 Year Plan, so there are possibilities within it to secure additional resources if that is what we want, and it may be in the context of the spending review that the Chancellor may think that a priority should be attached to railways.
(Mr Byers) But, with all respect to Mr Bowker, on the day when The Times has published a letter from a large number of city institutions calling into question the commitments that the private sector is willing to put into the rail infrastructure in the current situation, what you are saying is that the improvements in the 10 Year Plan for the rail industry depend almost entirelyand we are talking about almost 90 per cent of the finance available to spend on infrastructure projectson the private sector?
(Mr Byers) That is not quite right because you are discounting the full £18.5 billion we will be putting in. Some of that will secure private investment. The Channel Tunnel Rail Link is a very good example of a very high level of private sector investment which will be achieved as a result of some of the £18.5 billion we are putting in
683. Because we have a list of projectsthe ThamesLink, the Suburban Line upgrade, the East Coast Main Line, et ceterain the Strategic Rail Authority plan which are all due to start during the next ten years and due to be finished during the next ten years, but the reality is that virtually all of the funding for those is going to have to come from the private sector, and the actual cash available to spend on hiring contractors for those services from the public sector is only £4-5 billion.
(Mr Byers) It is important to remember the benefits we get from the franchising regime. What we have seen is that a franchising regime which is effectively operated will secure levels of investment from the private sector. I think Mr Grayling is right to point out that, within the 10 Year Plan, there is a fixed amount of money coming from the public purseit is £33.5 billion in total of public money. I believe we will secure the £34 billion or so of private sector involvement as a result of that, and part of it will not just be the under-pinning that comes from the public provision but also deals done as part of the franchising operation. One of the key criteria laid down in the new franchising approach is the level of investment we will get from the private sector. What we have seen with just two franchisesthe two-year extension on GNER and the Chiltern franchiseis nearly half a billion pounds coming as a result of those two franchises, so the franchising process will be another vehicle by which we will secure major private sector investment. So I think it would be a mistake to look at the public money under-pinning and levering in private sector provision; we also have to look at other initiatives like the new approach to franchising and the difference that will make.
684. The administrator told us that his target date for bringing Railtrack out of administration to go back to the courts is the end of September. Are you absolutely confident and can you assure the Committee that the bid team working to create a company limited by guarantee will be ready to put a bid to the administrator by the end of September?
(Mr Byers) It is a matter for the bid team. I have nothing to do with the bid team, so it would be wrong of me to comment on that. They will make a bid
Chairman: I want to move on because I am very anxious to get to the PPP.
685. Just quickly, what happens if the CLG bid team is not ready to put forward a bid by the end of September?
(Mr Byers) As I say, that will be a matter for the bid team. I am sure they will be aware, as we all are, of the timescale that the administrator is working to.
686. Moving to social inclusion or social exclusion, the 10 Year Plan does nothing for that, does it?
(Mr Byers) It should do and I am very keen, when we look particularly at the bus network, that we look very carefully at how we can use that in a far more positive way than we have so far.
687. As far as motorists are concerned, however, there could be a 20 per cent cutting of costs over the period. As far as rail users are concerned, you are hoping to get keep the increase in fares very moderate, but for bus users, over the last few years it has gone up by about 13 per cent and the evidence is that bus fares are just going to go on and on going up, so those people who have to rely on buses are getting a pretty raw deal from this, are they not?
(Mr Byers) I think I indicated earlier that I was not terribly happy with the way the bus network has been handled, and I want to look at new ways of perhaps focusing on that and using some of the powers we have under the Transport Act 2000 in a positive way. I also think we need to be looking very carefully when we do the review at this whole issue of social exclusionor social inclusion is a more positive way of putting it. Without giving away too many secrets about what might be in the review when we announce it in July.
688. So you are looking at it, and there is some hope there.
(Mr Byers) Yes.
689. What about for walking and cyclists? Is there any hope there?
(Mr Byers) On both of those areas there is work going on in the Department and, as I may have indicated to the Select Committee last time I gave evidence, there is an indication that the trend, for example, for children being driven to school may well have peaked and we do seem to have more children who are now walking or cycling to school. That is obviously a very beneficial change and we need to see that continue and develop in the years ahead.
690. On choice and restraint: last week Professor Begg told us that really, if you get into giving good bus priority in places like Brighton, Oxford and Edinburgh, you can wean a lot of motorists away from their cars. Do you agree?
(Mr Byers) I think that is true. What has been interesting from some of the figures I have is that, although we talk very much about bus ridership developing very quickly in London and we are all aware of that, it is worth noting that in Greater Manchester last year there was a 3 per cent increase in bus ridership and in West Yorkshire there was a 5 per cent increase, so it is not just Londoners beginning to see an increase.
691. And that is in spite, in those areas, of big fare increases. So if you could do something to hold the fares down, might you get even better improvements?
(Mr Byers) I am sure you would, because that is, I think, the lesson of what has happened in London. There has not been an increase in real terms and people are more inclined to go to the
692. Are they connected with constraints on cars?
(Mr Byers) Not necessarily, I do not believe
693. Finally, could you kick the bus operators into finding a way in which people do not have to pay the fare every time they get on the bus but have some Smart card or device like in the European cities to speed up bus travel time which would make it more attractive to people?
(Mr Byers) I think you are right in pointing out that new technology does not seem to have really hit many of the bus operators, and they are still using the old style of collecting cash and issuing a ticket. There must be better ways of doing it and, in discussions we have with the bus operators, we will draw their attention to that proposal.