Select Committee on Transport, Local Government and the Regions Minutes of Evidence


Examination of Witnesses (Questions 280-299)

MR NICK NEWTON AND MR JIM STEER

WEDNESDAY 26 JUNE 2002

Miss McIntosh

  280. Are you aware that GNER said last week that, on a number of occasions, because the advice to the SRA outgoing chairman was overruled and they were only give a two year franchise, they are not now in a position to make the investment in the carriages that they had wished to do? Do you have the current position on that?
  (Mr Steer) The position, as we understand it, is that the commitments that were made when the limited extension was granted are being progressed. I think perhaps GNER are making the point that, beyond that and looking at further investment, a two year franchise is an inadequate basis, in their view, for making further investment decisions, and they are right.

  281. So the passengers and the travelling public will lose out during those two years by not having carriages.
  (Mr Steer) No, I do not think so. We feel quite comfortable that in fact the two year franchise extension has been able and is demonstrably able to deliver short-term benefits. That is already reflected in a significant improvement in the timetable this year and there will be further benefits next year and there will be further capacity added. What we certainly acknowledge is that that is just the short-term and of course the medium-term has to be addressed and it will have to be addressed through a new arrangement following on from 2005.

  282. It is just that, in the meantime, we will not have the carriages that we otherwise would have had. Are you aware of the impact that the disruption to freight trains through the Channel Tunnel is having on rail transport in the north of England, in particular on companies like Potters in my constituency who have rail heads at Selby and Ely? The freight that they would normally hope to carry on trains from about November of last year are now being transported by road. So, not only are you not meeting the targets set out in the Government's ten year transport plan but can you confirm that you are not meeting the targets set out in your strategic railway plan?
  (Mr Steer) Thank you for the local information; I would not claim to have all of the details. Of course, you are right that there has been a major loss in international freight business and I acknowledge the difficulties it may cause. In terms of achieving the freight target, which is not set specifically on international traffic, important though that may be, the progress that has been achieved over the last 12 months is actually remarkably encouraging, particularly against the backdrop of not as reliable a network as we would all like to see. The figures that the rail freight group have established and published, I believe just earlier this week, show an 8 per cent year on year growth in freight miles carried, which is quite in line with, in fact it is slightly ahead if you compound it up, the 80 per cent target over 10 years. So, yes, the international position is very disappointing. No, it has not damaged the achievability at this juncture of the freight target.

  283. Arriva seems to have sorted out the situation they inherited from Northern Spirit in terms of shortage of drivers. They suffered a very difficult winter but I think they now have enough drivers. However, now there is a problem with guards wanting to reduce the differential in pay and conditions with the drivers. Do you have a view on the damage that is causing to the travelling public?
  (Mr Newton) We know that Arriva are in industrial dispute and they have not been able to reach a settlement with either the conductors or indeed retail staff. They have made an offer, as we understand it, which is above the budget that they have for the current franchise year and it is unfortunate that there is a continuing dispute. The managers are trying to manage the situation as best they can without incurring what they consider to be unreasonable additional costs.

Mrs Ellman

  284. Your infrastructure investment programme seems to be very concentrated in the south. Could you tell us why that is and what you are going to do to give the north a better deal.
  (Mr Steer) I know that this has been a pretty widely expressed view following publication of the strategic plans. I have to say that I do not really believe that it is a fair criticism. If you look at the large spend projects, and I mentioned two of them in my introduction, they are, as much as anything, focused on delivering benefits to the northern part of the country and it may be that commentators and observers have sort of taken them for granted and therefore look for the next project but, as—

Chairman

  285. Mr Steer, that is an opinion to which you are of course entitled but it is different from that of your Chairman who gave us different evidence, but perhaps we could move onto the effect.
  (Mr Steer) My answer, if I may just complete, Madam Chairman, is that I do not believe that a fair criticism is that the investment is biassed unduly towards the south. Yes, it is true that there are more passengers focused on London—we are all well aware of that—and I am sure that we are also well aware of the fact that the railway geography of the country, some important exceptions aside, Trans-Pennine being one of them, is focused towards London. The major routes go to London and that is where the major investment is going. However, that does not mean that the investment is in the south of the country and it certainly does not mean that the benefit of that investment is in any way, in my assessment, skewed towards the south of the country.

Mrs Ellman

  286. What kinds of assessments do you make to consider where the benefits actually go? You have just said to us, "This is what we are doing but it does not necessarily mean that the benefits are in the south rather than the north." What work do you do to ensure that that indeed is the case?
  (Mr Steer) We do look at the pattern of benefits. We do not have some allocation proposition that each region should have a certain share. We look at what gives good value for money and what I can say is that a very large part of the investment programme that the SRA is striving to implement does arise in the north of England.

  287. Do you study the regional economic strategies and the regional transport strategies produced by the regional development agencies?
  (Mr Steer) We do.

  288. What use do you make of them?
  (Mr Steer) As yet, not enough.

  289. Can I ask you again, what use do you make of them? Are you saying that you do not make any evaluation?
  (Mr Steer) Let me explain, if I may.

Chairman

  290. Briefly, Mr Steer.
  (Mr Steer) The West Coast Upgrade Project/the East Coast Upgrade Project were envisioned, to use that horrible word, before there were regional economic strategies and regional transport strategies. We need now to be looking to ensure that those big projects deliver regional objectives. I do not have a problem that fundamentally they go against regional objectives. I know that indeed the way most regional plans have been written is that they expect those projects to be delivered, they accommodate them, but I think that the challenge for us in the strategic plan is to go the next step and make sure that, at a more detailed level, we are meeting regional objectives. I think it is simply a matter of sequencing, that regional planning in this country is quite a new phenomenon. These projects are of very long gestation period.

Mrs Ellman

  291. When you are making your assessment of value for money, do you put regional economic regeneration as part of that assessment?
  (Mr Steer) Not necessarily. We are looking at overall value for money irrespective of where the benefits lie.

  292. So the issue of regional economic regeneration is not part of your assessment that guides your investment plans?
  (Mr Steer) What I am saying is that it has not been in the preparation —

  293. Is it now?
  (Mr Steer) It is what we are addressing and will be addressing as the strategic plan is developed.

  294. Will we see the benefits of that within the 10 year transport plan period?
  (Mr Steer) You certainly will.

Chris Grayling

  295. Could I start on the situation in Manchester. We have taken quite a bit of evidence that indicates that there are fundamental problems with expanding services in Manchester—we are changing the franchise structure; we are introducing the Trans-Pennine Express—simply because a number of key bottlenecks are chock-a-block with services already. Can you give us the SRA's perspective on that situation.
  (Mr Steer) We certainly do not believe that the rationale for the two franchises being restructured in the way we are doing is driven by the particular concerns in Manchester, but I accept the point. There are problems in Manchester; they will not be driven out by restructuring the franchises, neither will they be made worse by the restructuring of the franchises.

Andrew Bennett

  296. What are you doing about the problem?
  (Mr Steer) First of all, let us identify what the problem in Manchester is. One of the well known problems in Manchester is that it is a bottleneck in the rail network and, in particular, Manchester Piccadilly is a bottleneck. We are supporting the West Coast upgrade which happens to be the project which is set to tackle that problem. It has not gone well to schedule.

  Andrew Bennett: It has nothing to do with that problem at all.

Chris Grayling

  297. I thought the key point about Manchester was that there are specific plans to improve the network in and around Manchester that have been left outside the first ten years of the SRA's strategic plan. That is why we were surprised because they were originally in the Government's ten year plan but they were excluded from the SRA's strategic plan.
  (Mr Steer) The case could not be made at the time the strategic plan was put together to include them.

Helen Jackson

  298. Why?
  (Mr Steer) When I say that the case had not been made —

  299. Because the work had not been done?
  (Mr Steer) No. There was no positive case that could be made for those investments—they are not cheap; they are big expensive projects—and, at the time, the Manchester study had been completed and I pointed towards some options: Tram-Train was a concept and further light rail on the national network; possible new links; a western link to Manchester Airport; a new link at Castlefield in the centre of Manchester—


 
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