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Caroline Lucas: Will the Secretary of State give way?

Mr McLoughlin: I should like to make a bit of progress first.

The best way of securing long-term value for money is to ensure that the rail industry plays its part in delivering lower costs and sustainable railways. That will require all those who are responsible for track and trains to work more closely together. It will require a more responsible approach to pay and modern ways of working among all who are employed in the industry, from the platform to the boardroom. It will require longer franchises, providing greater flexibility, longer contracts and a sharper focus on cost, and it will require smart technology to reduce the cost of selling tickets. We are challenging the industry to deliver efficiencies that will put our railways on a par with the best in the world, and we will pursue the delivery of those savings with the Rail Delivery Group, train operators and others. Let me address the main point made in the motion by saying that our relentless focus on efficiency will help us to put an end to above-inflation increases at the earliest opportunity.

Caroline Lucas: I congratulate the Secretary of State on his new post. I wonder what he would say to one of my constituents who told me a few days ago that he had had to give up his job in London because he could no longer afford the rail fare. How is the Government’s policy of encouraging people to look further afield for jobs consistent with pricing them off the railways that could enable them to do so?

Mr McLoughlin: More people are using the railways now than at any time since 1929, on a lesser network. However, the hon. Lady is right to express concern. I too am concerned about people who are having to spend such a large proportion of their income on transport. I hope that we shall be able to look at that, and that in due course we shall see improvements in some areas.

Mrs Main: Will my right hon. Friend give way?

Mr McLoughlin: For the last time.

Mrs Main: One thing that has not been mentioned so far is the cost of parking. Many people feel that the cost of their rail journeys has been rising in a reasonable fashion, in the sense that the increases are predictable, but the cost of car parking at railway stations has leapt, and the time for off-peak parking has been pushed back to as late as four or five o’clock. The fact that the cost of parking at stations has not been addressed constitutes a flaw in the debate.

Mr McLoughlin: I am told that that is a matter for the rail companies, but I understand the concern about car parking, which, I believe, can be extremely expensive in certain areas.

The hon. Member for Garston and Halewood has asked specifically for an opportunity to address the cap on regulated fares, and the way in which train operators use what are known as flex fares, which the motion describes as “that strict limit”. As I said earlier, I do not believe that the current fares structure—which we inherited—is perfect, and that is why we are conducting

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a fares and ticketing review. The key issue today is the “flex” policy, which was introduced by the last Labour Government. The cap on regulated fares is implemented by train operators as an average across a “basket” of different fares. That flexibility allows some fares to be increased by up to 5% more than the average, provided that other price increases are kept below the average. It means that operators can manage demand more effectively and efficiently, which should achieve better value for money for fare payers and taxpayers overall. It also allows operators to keep fares in a logical structure and to address anomalies over time.

Let me stress again that when operators increase some fares by the maximum permitted, other fares must increase by much less or even be held flat to comply with the regulated average. As I have said, the system was introduced by the last Government.

Heidi Alexander (Lewisham East) (Lab): Will the Secretary of State give way?

Mr McLoughlin: I will, for the last time.

Heidi Alexander: I congratulate the Secretary of State on his new post. One of the anomalies to which he has referred is the fact that fares in my constituency in south-east London are not fully integrated with the Transport for London price structure, and people pay more for a journey on the rail network than they would pay for a comparable journey on the TfL network. What are his views on that issue, and how does he plan to resolve it?

Mr McLoughlin: I look forward to reading the letter that I shall no doubt receive from the hon. Lady, and I will give a considered response then, as I will have had an opportunity to examine the background of these matters.

Alison McGovern (Wirral South) (Lab): I welcome the new Secretary of State to his position. When he is familiarising himself with his new brief, may I ask him to take a look at the Wrexham to Bidston line? I raised that project with his predecessor on a number of occasions, and I think he will find it a fascinating subject.

Mr McLoughlin: Members will have plenty of opportunities to question me over the coming months, and after the hon. Lady has no doubt written to me about this line, I will perhaps have a little more to say about it—and I refer her to the very good line between Derby and Matlock.

We are building a modern railway network in Britain —one that plays its full part in connecting our communities, supporting our economy and safeguarding our environment. We are delivering this crucial work against the backdrop of an inherited debt and the most testing economic times for a generation. But investment by investment, upgrade by upgrade, project by project, we are making real and lasting progress. As we do, at the forefront of our thinking and the centre of our plans are the people and businesses that use, depend on and fund this country’s railways.

I am acutely aware of the concerns that passengers have about fares. That is why we are committed to ending above-inflation increases as soon as we can—once

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savings are achieved and the wider fiscal situation improves. It is also why we continue to keep the regulated caps under review. Every choice we make and every decision we take is about giving passengers the best railways and getting passengers the best deal. That is what the Government intend to do, and we are undertaking that task.

1.42 pm

Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): First, may I apologise in advance if I am unable to return to the Chamber in time for the beginning of the concluding speeches to this debate? I have an urgent meeting at 3 o’clock in the Scotland Office that I am committed to attend, but I hope to be able to return in time.

I am grateful for this opportunity to contribute to the debate, and I shall focus on fares on the cross-border services between London and Scotland. One of the final parts of the west coast main line into Glasgow passes through Lanarkshire and runs through my constituency. I use that rail service reasonably frequently—although perhaps not as frequently as I should—and many of my constituents also use it and other rail services, or work for the companies that currently operate them.

My Front-Bench colleague discussed some of the concerns about this summer’s west coast main line franchise announcement. I share those concerns. There are important unanswered questions about the process and the award, and there is a strong case for the issues to be fully examined. While there may not be an immediate negative consequence, there has been confusion on the east coast and similar confusion could arise on the west coast, which would not be good for the people working on the railways or for passengers on the west coast main line. Some of the commitments that have been made appear to be difficult to deliver, and some of the bid’s underlying assumptions require, at the very least, further consideration. I appreciate that the Secretary of State and some of his ministerial team are new to their posts, but I hope that they will bear these important points in mind.

Gloria De Piero (Ashfield) (Lab): Regional railways are very important for former mining towns such as the one I represent. Many of my constituents travel into Nottingham for work. It would be terrible, and very short-sighted, if fares were allowed to rise to such a level that people thought it simply was not worth being in work and that it would be better if they were on the dole.

Tom Greatrex: My hon. Friend makes a crucial point. I am sure the situation she describes arises in many constituencies where people travel into a larger town or city for work. The cost of that travel can make the difference between the work being worth doing or not. From other parts of the Government we hear talk about encouraging people into work and trying to find ways of getting people into employment in what are very difficult economic circumstances. If rail fares rise too high, we will fail to achieve that important objective. Although the issue of local fares is a devolved matter

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and many of the journeys my constituents make are local, many of them also use the west coast main line, and some of their journeys may cross the border, where fares are not a matter for the Edinburgh Government.

Another important topic is the restrictions on the use of railcards. Some of the headline commitments in the franchise bids are about reducing or keeping controls on fares. Ambiguity arises, however, when questions are asked about restrictions on the use of railcards, such as the times when they are valid.

Jenny Chapman (Darlington) (Lab): I represent Darlington, which is the birthplace of the railways, and, as has been said, people are starting to find that fares are prohibitively high. Clarity on off-peak and peak-time fares is becoming a real issue. It is often unclear when a ticket is valid and what the price of the journey will be. That is a huge concern to my constituents.

Tom Greatrex: My hon. Friend makes an important point. The times at which peak and off-peak fares are available can vary greatly between different parts of the country, which can cause immense confusion.

My hon. Friend the Member for Dundee West (Jim McGovern) made the point that people sometimes find that buying separate tickets for different legs of their journey works out cheaper than buying a single ticket. All such issues add complications, which does not help to achieve our objective of encouraging people to use the railways as much as possible.

If the complications become so great that people choose to travel not by rail but by a different mode of transport, that could also make some of the Government’s other commitments and policies harder to achieve. I say that as someone who travels on the west coast main line between Scotland and London. Many of the people who get on the same train as me—especially business travellers on a Monday morning—have in the past frequently travelled to London by plane. They make the point that the investment in the west coast main line over recent years means that now, if they catch the right train, they can complete their journey almost as quickly as they could by air, when they take into account the time taken in travelling to and waiting at airports at both ends of the journey. That has had a huge impact on the use of the train service. The investment has, therefore, been very welcome. Now, however, some of the peak-time fares are becoming more expensive than air fares and, especially as businesses are under increasing financial pressure at present, many business travellers are switching back to air.

The Secretary of State will find that another important part of his portfolio is aviation capacity. As this recent investment has made rail travel more attractive and almost as fast as air travel, it does not make sense that cost increases could now lead to people reverting to air travel. This is also an important issue because these cost increases are having an impact on businesses that are under increasing financial pressure because of the general difficult economic circumstances.

Katy Clark (North Ayrshire and Arran) (Lab): On the question of complex rail fares, does my hon. Friend agree that the Government’s policy of closing ticket offices and reducing their opening hours makes it even

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more difficult for people? Frankly, the machines that are available at railway stations make it practically impossible to know what is the cheapest fare.

Tom Greatrex: My hon. Friend makes another important point, which I hope that the Secretary of State will consider as he reads himself into his brief. My experience of getting from airports to stations, particularly when getting a train from Gatwick into London, is that the ticket machines are quite hard to navigate. It is difficult to find the cheaper ticket, which involves travelling on the non-Gatwick Express service. That is just one example that shows that how the ticket machines are set up seems to drive people towards the more expensive fares. I am not sure how that is regulated, but it might be worth considering in the round along with all the other issues.

Alison McGovern: Does my hon. Friend agree that that must be considered as part of the Government’s review? The infrequent business user’s train use is limited by such high complexity levels.

Tom Greatrex: I agree wholeheartedly with my hon. Friend. I was heartened to hear the Secretary of State’s comments about considering those issues as part of the review and it is very important that it covers all aspects of the matter. The problem is not just the ticket price but access to the tickets and the issues pointed out by my hon. Friend.

We quite rightly hear a lot about the pressure many people are under and about how their incomes are being squeezed. If rail fares become prohibitive at such a time, either for people trying to get to work or for business users, that will mean that people use forms of transport that do more damage to the environment and that restrict aviation capacity. It is very important that the Government carefully consider the levels at which fares can be increased, because although I do not disagree with the Secretary of State about the need for investment—everybody accepts the need for continued investment in our rail services—if the burden is placed too heavily on passengers during this time of economic difficulty, people will be driven away from using the railways. Nobody wants to see that.

I sincerely hope that the Government will consider this straightforward and fairly simple motion. It is about trying to help people at this particularly difficult time and trying to avoid other policy objectives not being met because the fares are too expensive. I know that the Secretary of State’s predecessor said last summer that she was talking to the Chancellor and trying to find a way to limit fares further. It became clear over a relatively short time that some of the Chancellor’s other decisions in the last Budget were not viable or sensible and it would do the Government a lot of good if they reconsidered the decision on fares, which is in danger of having a severe adverse impact on many people across the UK.

1.53 pm

Mr Brian Binley (Northampton South) (Con): It is a pleasure to follow the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), who delivered a sensible speech and made some very sensible points. I had

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sympathy with many of them. While we are in a congratulatory mood, I also congratulate the Secretary of State. He is held in very high regard and with great affection in the House and people will be delighted to see him emerge from the Whips Office into slightly greater glory in the months to come. I hope that he might be kind enough to pass on my good wishes to his Minister of State, my right hon. Friend the Member for Chelmsford (Mr Burns), who is no longer in his place. They make a good team. I am not sure who will look after whom, but we will see as the months unfold. Finally, will the Secretary of State pass on my good wishes to his predecessor, who was especially kind to Northampton? As he will know, she helped to provide the money for a much-needed new station and we remain deeply appreciative.

The debate is a missed opportunity. I understand and have some sympathy with the need for more regulated rail fares. I understand the need to see such regulation as an attempt to put a brake on the sizeable increase in rail fares that started during the Opposition’s period in government and, sadly, continues under this Government, but the truth is that trying to ban train operators from increasing fares beyond a certain point is an unnecessary diversion. The real issue is why the rail industry has not done more to get to grips with cost. Under the previous Government and so far under this Government, it seems to have been accepted that the taxpayer or consumer should finance the rail sector when no attempt has been made to increase efficiency and production and to lower costs. Every business in this country has had to deal with such challenges over the past five years, many of them to great effect, yet the rail industry seems not to be a part of that process.

We have one of the most expensive rail systems in Europe. Why is the rail sector the only privatised sector not to have made progress with cost reduction since its inception as a privatised operation?

Alison McGovern: The hon. Gentleman said that we have one of the most expensive rail systems in Europe. Is he talking about the cost per journey? We have much more frequent and dense services than other countries in Europe, but did he take that into account?

Mr Binley: I thank the hon. Lady for that question. I am referring to the McNulty report, which her party’s Government put into effect. McNulty made it quite clear that the British rail sector was 28% more expensive than like-for-like rail sectors throughout Europe. If our costs are that high, I hope that the hon. Lady will be as concerned as I am. The alternative is to keep pulling money out of the pockets of the taxpayer or consumer and I want a more productive and efficient rail industry—[Interruption.]

Katy Clark: I was not sure whether the hon. Gentleman sat down because he had finished speaking or because he was letting me intervene, and I am grateful that it was the latter. He is making the point that that comparison is like for like, but surely the key point is that Britain has a very different railway system that is based on the private sector, whereas the cheaper train operating systems to which he is comparing it are predominantly in the public sector.

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Mr Binley: I thank the hon. Lady for that point. She served with great distinction on the Crossrail Bill—two and a quarter years of toil and effort—and she is clearly knowledgeable on rail matters, as I know from that time. My point is that the comparisons are not mine, but McNulty’s. The report was instigated by her Government. If one does not believe what McNulty said, that is a different matter, but it is the most authoritative report we have had on this subject. Rather than bickering about an area on which I am not overly clear, I am willing to accept McNulty as an authoritative response on this issue. The previous Government did too, so we do not need to get too involved in that sort of thing. I want to ask, therefore, why the previous Government—

Katy Clark: Will the hon. Gentleman give way again?

Mr Binley: Just for you.

Katy Clark: I am extremely grateful to the hon. Gentleman, who is a good friend. We have sat on many Committees together. My point is that the comparison is not like for like because the train system in Europe is predominantly public sector. That is why it is cheaper.

Mr Binley: Some of the comparisons are with companies that are much more privatised, which is perhaps not the impression that the hon. Lady is trying to give, but that is not the point. The point is that I see McNulty as authoritative and so did her own Government. Therefore, we need not to argue about the review, but to use it to the benefit of our consumers and constituents. We need to put pressure on the rail sector to become more efficient and more productive, and to cut costs. It should not be only the taxpayer and the consumer who have to dip their hand in their pocket.

Let us move on, because I want to ask why the Government have not done more to respond positively to the conclusions of the McNulty review, although I was pleased to hear what the Secretary of State said, which intimated that he would be responding to that review, because Labour in government did not. The Labour Government were pleased to tuck it away in a corner of the office of the Secretary of State for Transport and forget it. That was a missed opportunity, which is rather sad.

The Opposition devised an industry structure that created many of the inefficiencies and costs to which McNulty referred. Let me remind Opposition Members that the spirit of the Railways Act 1993 envisaged a far more flexible franchising arrangement, as well as a less complicated intra-industry interface. Under the original arrangements, fares regulation involved a cap below inflation, not above it. If we want to squeeze inefficiency out of a sector, we should not give it price increases above the rate of inflation. That is crazy.

In office, Labour created an additional, unnecessary bureaucracy in the industry and made empty gestures towards a proper strategy. Today’s motion does the same—Labour is continuing in the same vein, which I find rather sad, because I have great respect for the hon. Member for Garston and Halewood (Maria Eagle), the Opposition spokesman. She has a great deal to offer in this area, and some of her remarks suggest that she is

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willing to make that contribution. I see some connection between those on the two Front Benches, to the benefit of our consumers, and I welcome her comments.

The question is, who should pay for our railways and what can we do to handle the costs? The Government policy that, progressively, passengers should pay a larger share of the cost and taxpayers less, is understandable. I do not want a subsidised, nationalised railway in another form. That is not what I seek, so I understand that view, but I want a Government who ensure that the industry’s unit costs should decline year by year over time. Cost increases below the rate of inflation will do more to impact on that than simply saying again, “You can have more than our consumers and our constituents have year by year in their pay packets.” That will result in costs rising inexorably and people being driven off the railways. None of us wants that.

The McNulty review demonstrated beyond doubt that our railway system is one of the most expensive around and that the competitiveness of the railways as against other transport modes is weak. A recent survey in The Daily Telegraph found that travelling by rail on some routes can cost more than catching a flight. That is cloud cuckoo land. According to the research, it was more expensive to take a train on 50% of popular routes than to fly, including travelling from London to Scotland. That does not make sense.

It has been a thrust of Government policy to encourage more people to use railways. I welcome that, as do many of my constituents, yet the laws of economics dictate that an increase in relative prices will depress demand. That is not a difficult formula to grasp, work out and understand, but the impact on those who use the railways to get to work is particularly bad and particularly expensive.

The situation facing my commuters in Northampton is especially enlightening and in line with many of the comments made during this welcome debate. Northampton is set to expand by more than 56,000 houses by 2026. We shall see whether that happens, because we all know that the construction industry is depressed, but that was the target of the previous Government and it remains, to all intents and purposes, the target of this Government. It really means that we are trying to get out of the south-east and London people who work in that area but cannot afford housing in it, yet what are we doing? The price of an annual season ticket from Northampton to London is £4,756 without the new increase, which will rise to £5,628 for those who need to use the underground. Add an annual season ticket for parking of £815 and we reach more than £6,000. For somebody on £30,000 with a disposable income of £24,000, that is 25% of their disposable income. It just does not make sense.

If we want to move people who work in London and the south-east to areas with less-high-cost housing, we must understand that we need a more competitive rail industry with lower pricing, not higher pricing above the rate of inflation. That is the point that I really want to make.

The regeneration and growth strategies in places such as Northampton risk being derailed, if I might use that term, unless we get this sorted. I make a plea. The Secretary of State understands that point well and knows that commuters from Northampton have already been forced to pay out a quarter of their disposable income, but that price is going up. I know that he

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understands the problem, which is not only about Northampton. It is about Brighton, Nottingham and other areas that are suffering from the same difficulties.

My constituents have a right to ask what the rail industry is doing to get to grips with its cost base. There are efficiencies that the industry could and should make to bring unit costs down. Staffing levels are unnecessarily high, ticketing and retail arrangements impose operational costs and inefficient deployment of staff, and industrial relations remain problematic and expensive for franchise operators. Therefore, why is the industry not doing more to grasp the challenges of McNulty and why are we not pressurising it to do exactly that? The message from the debate, and from Opposition Front Benchers and Ministers, should be that we have an inefficient rail industry, proved beyond doubt, whose costs have forced up rail prices to the point where they are becoming exclusive to people who can afford to pay and deter many who find it difficult to pay. That is not what we want from our national rail industry.

The industry, the previous Government and this Government have found it too easy to pass on ever more costs to consumers. Neither taxpayers nor hard-pressed rail users should be prepared to tolerate that, and nor should we, but what is needed is not regulation, but a proper focus on efficiency so that the industry takes responsibility for its costs, which every other sector in this country has had to do over the past five years.

I will make one final point. Rail costs are an integral part of business costs because—this point has been made and is relevant—London is the hub of British business, no matter how much we might want to change that, and businesses must travel again and again to London in any given period to sustain and hopefully grow their business. Growth is clearly the only game in town, as we learnt yesterday, and I pray that the Government take on board some of the criticisms that have been made about their growth policies over the past two and a half years. The truth is that unless other Departments see a role in this respect, we will not get the growth we need because costs will keep rising, and the railway costs are an important part of that formula. I know that the Secretary of State understands that and I look forward to him having a massive impact in that regard.

2.11 pm

Alison McGovern (Wirral South) (Lab): It is a pleasure to contribute to what has been an informative debate so far. As a precursor to the few brief points I wish to make, I feel that I should make an admission: I come from a long line of railway people, beginning with my great grandfather and including me, as I have previously worked in the rail industry. I make this confession—that my great grandfather, grandfather and father all worked in the rail industry—not to own up to some kind of strange rail geekery, but rather to explain that I understand some of the practicalities of our rail system and know that changes that seem obvious from the outside can actually be quite complicated and difficult to deliver.

Not least among those considerations is the important fact that the UK rail system was the first in the world. We invented railways, and the impact of that is still with us. The system that we have was designed many years

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ago, and that brings with it some of the costs. We cannot easily make a like-for-like comparison between our system and those of France or Germany; I am afraid that the UK rail system is just different. We must of course look at ways of reducing costs, but it is not all that straightforward.

Mr Binley: Surely the hon. Lady is not rejecting what McNulty said. Surely she accepts the report, authorised by her Front Benchers, which makes a massive contribution to the debate. I hope she does.

Alison McGovern: I rarely reject out of hand anybody’s contribution to a debate on so important a subject as the rail industry. I merely make these points as a precursor to what I am about to say. I always feel that we should be cautious in what we say, because I have seen at first hand the complexity of some of the problems we face in running efficiently the kind of extensive rail system we have in Britain.

I want to speak about two things: first, the question of the average fare rise across the fares basket and the restrictions on rises; and secondly, some of the other ticketing issues that rail industry consumers face and what the Government’s ticketing review could consider in order to assist consumers. On the question of the average fare rise versus the cost to travellers of individual fare rises, I have a problem with the Government’s apparent position. The Secretary of State spoke at length only a moment ago about the importance of allowing train companies to raise fares in a way that allows them to maximise yield, but the problem is that that potentially allows significant unfairness. Those whose travel is absolutely necessary for their employment face potentially significant rises, whereas those who have a choice about how they travel are less likely to face those rises. To use an economist’s term, those with an inelastic demand curve—I apologise for my use of jargon, but it may be helpful—are stuck paying ever higher season ticket prices, while those who make up the elastic part of demand can pick and choose, so train companies maximise those yields on what tend to be leisure fares, for journeys that people can choose whether to make. That is the point that many Members across the House are making in different ways.

The problem with allowing average fare rises is that people who cannot choose whether or not to travel by train because they have no practical alternative can be faced with steep rises. The flexibility to do that cannot be allowed. In my view it is not fair. Of course, that is a decision that the Government must make based on the facts. Back in 2009 the then Transport Secretary took a decision, and I support it, because it was about ensuring not only that the train companies were able to do the business they had been contracted to do, but that there was a level of fairness for the travelling passenger.

The Government must think hard about this matter. If consumers who have no practical alternative to travelling by rail are faced with steep fare rises year after year, they will think that it is a significant unfairness to them. Members on both sides of the House have made that point. We need to be clear that this is about different groups of passengers and train companies effectively negotiating their way through to maximise benefits, in some cases for them rather than passengers.

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In Merseyside we have quite a specific situation. Travel around the Mersey travel network tends to be more reasonable. However, one of the things we are desperately trying to do is increase job opportunities for people in Merseyside who are perhaps a little further afield. Earlier I cheekily mentioned to the Secretary of State my campaign to improve the Wrexham to Bidston line. It is all about helping people to travel from places in the Wirral and the rest of Merseyside across our city region and further afield, to Manchester or north Wales, to find work wherever it may be.

That is the Government’s stated policy, and they tell us they believe in it. However, with rail fares continuing to increase—my hon. Friend the Member for Rhondda (Chris Bryant) made this point eloquently—those on the lowest incomes will not have an option. They will be unable to take a decision to make what is currently a 90-minute journey from Bebington, Birkenhead, other parts of the Wirral, Southport or the wider Merseyside area to Manchester and other cities, because once they have made that further journey it will be just too expensive. That runs absolutely counter to everything we are trying to achieve to drive up the economic performance of our northern cities. The Government must think carefully about whether their approach to rail fares is not actually against the drive of what they are trying to do across Government.

Secondly, we need to think carefully, perhaps as part of the Government’s ticketing review, about how to ensure that the sale of train tickets and rail travel in general works for the customers, who pay significant amounts. I am particularly interested in how the current set-up harms people working for businesses and organisations who do not use the railways frequently enough to be considered regular or daily users, or even commuters, but do use them frequently enough for there to be a significant impact on their business.

The Government need to pay attention to a couple of aspects. The first is what a peak time is. When I was growing up, it seemed as if we always knew what the peak times were and that they stayed the same year after year. That may be the effect of the rose-tinted glasses of hindsight; perhaps things were different in reality. However, now peak times seem to change all the time.

If a person is travelling on different parts of the network, things can get difficult. For example, if their business, like many businesses in Liverpool and the Merseyside city region area, requires them to go to London one week and Leeds the next, it will be difficult for that person to find out whether the peak times are the same everywhere. The member of staff at Eastham station in my constituency may or may not have in their head the relevant peak times for the ticket.

Dr Thérèse Coffey (Suffolk Coastal) (Con): Having grown up in Liverpool, I know the hon. Lady’s rail line, Wrexham to Bidston, very well; I had family in the area. However, surely people in today’s world just check online—on nationalrail.co.uk or other sites, which will tell them the pricing of tickets for when they want to travel, including for off-peak, super-advance and similar tickets. I am not sure why there is such a complication.

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Alison McGovern: I am sure that the hon. Lady is extremely competent at double-checking peak times and the validity of her tickets when she travels, even if she is in a part of the country that she does not know. However, businesses have told me that they find the situation difficult.

The national rail inquiries website is good, but I am not always sure that it is that clear. The better solution would be to print the peak times on the ticket. Surely, in this day and age, we can set up a digital printer that can print the peak times on restricted tickets. People would then not need to make sure that the 3G was working on their phones so that they could look the information up. If it was on the ticket, that would really help people.

Jenny Chapman: I completely agree with my hon. Friend. I emphasise that not only digitally incompetent people make the mistake. I am on the east coast main line every week, and there is virtually never a journey when somebody in my carriage does not have to pay an excess surcharge because they have made a mistake to do with the peak, off-peak and super off-peak times.

Alison McGovern: “Super off-peak”—there’s an expression. What does it mean? I am a regular train user—a train geek, some have said—but I am not clear when a super off-peak ticket would allow me to travel to Darlington or anywhere else.

We need a more common-sense solution. Although Members of Parliament might have smartphones in their pockets and be able to look things up as they go, a huge number of travellers—particularly older ones, who might be seeking the cheapest possible ticket for understandable reasons—would not be so confident, or would be less likely to go online and look the information up easily.

We need the information to be really clear, not least because there are some strange anomalies in the peak and off-peak scenario, especially in respect of my constituency, which is close to the Welsh border. Services going into Wales have a different peak and off-peak arrangement.

Some years ago, there was a great hurrah when we got a reduction in the number of types of tickets. Now there are supposed to be just four types of train tickets, including advance, off-peak and flexible, so that people can be clear. Personally, I do not think that that works. We need another look. We should either reduce the number of types of tickets or increase the ways in which people can be made aware of the validity conditions of their tickets. The complexity is increased because there are so many vendors of tickets—so many different organisations sell train tickets that the ways in which train ticket validity can be communicated are extremely diverse.

Mr Mark Spencer (Sherwood) (Con): The hon. Lady is making some valid and constructive points about the rail industry. However, the motion that we are debating focuses specifically on the costs to the taxpayer and commuters. Will she get round to talking about the motion rather than about her constructive suggestions for the Department for Transport?

Alison McGovern: The costs that passengers face depend on how easily they are able to purchase the most cost-effective ticket for them. Earlier, the Secretary of

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State said that the whole idea of allowing train companies flexibility was so that they could offer passengers many more lower-price tickets. My point is that lots of people end up paying more because they are confused about the system and have poor access to the information. As my hon. Friend the Member for Darlington (Jenny Chapman) mentioned, all those things imply a cost. If a person has the wrong ticket and is surcharged on the train, that is a greater cost to them. I do not agree with the hon. Gentleman’s assertion that my comments about the types of tickets are irrelevant, because such issues imply a cost. That is why they matter to people.

Mr Spencer: Can the hon. Lady estimate the cost saving that printing the peak times on tickets would make to the taxpayer?

Alison McGovern: I am good, Mr Speaker, but not that good. I am afraid that I do not have my calculator with me, but I am sure that the issue is worth looking at.

I return to my final thoughts about what needs to be considered in the ticketing review. There is the issue of split ticketing, which has already been mentioned. Those who travel regularly on the railway have a significant advantage over those who do not because they can work out how to split their tickets and save money. If people do that and it is within the rules, good luck to them. However, the situation is confusing. I believe that we should aspire to get more people on to the railways. If tickets are so expensive that people split their tickets to try to make savings, that should be a lesson that we are pricing people away and that the complexity in the rules disadvantages people who do not travel regularly.

To conclude, we need to think about how we can simplify the system. We need to go much further in thinking about the benefits that could be achieved for the travelling public if we thought about the rail system as a whole network. My hon. Friend the Member for Lewisham East (Heidi Alexander) made an extremely valid point about the difficulties of having a Transport for London network right next to a non-TfL part of the network. We need to think about all these things from the perspective of the travelling public rather than that of a complex industry. The rail system will always be complex, but we should make sure that the public-facing part of it is as simple and straightforward as possible.

By and large, we are at risk of curtailing the prospects of employment and economic growth if we do not take seriously the need to make rail fares much more affordable.

2.30 pm

Dr Julian Huppert (Cambridge) (LD): I welcome the new Secretary of State for Transport to his role. I also pay tribute to the work of the former Secretary of State, the right hon. Member for Putney (Justine Greening), and wish her the best of luck in her new, very important role in heading up the Department for International Development. It was a great pleasure to work with her to try to achieve many of the things to which we both aspire. I hope that that work can continue with the new Secretary of State and the other new Transport Ministers, whom I welcome to their roles, and the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), who, I am delighted to say, is still in his role, holding the Department together in so many ways.

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One of the issues on which we will have to work together is rail fares, which are quite simply too high. Under the previous Labour Government we saw year-on-year rail fare rises, and we now have one of the most expensive railways in the world. In their 13 years, rail fares went up by an astonishing 66% in cash terms—well above inflation—and in some years there were even greater increases. In 2007, for example, they allowed Stagecoach South West to increase fares by a massive 20%. Fares are too high already, but even now Labour and the Conservatives continue to argue for above-inflation rail fare increases. Although it was good to hear the new Secretary of State say that he aims to end the era of above-inflation increases soon, I hope that it will be very soon.

I will not support the motion because I do not agree with Labour Members that fares should be allowed to go up by more than inflation, which is what their motion says. It calls for a 1% above inflation rail fare cap, whereas Liberal Democrats believe that rail fares are too high already and should be reduced in real terms—that is, capped at less than inflation. We have argued that consistently and will continue to do so. It is time to end the era of above-inflation fare increases for ever.

The last-but-one Transport Secretary—I believe that 24 living people have had that job—instituted a policy of RPI plus 3%, which is well above inflation. Thanks to pressure from Liberal Democrats and others, and arguments won by the former Secretary of State, we managed to reduce that, and fares rose by only 1% above inflation—the average of the Conservative and Lib Dem proposals, and exactly what Labour advocated and advocates today—rather than by 3%. I congratulated the former Secretary of State on successfully winning that argument with the Chancellor last year. I have continued to work with her and other Ministers to try to press it. It was kind of the shadow Secretary of State to read out my words, confirming that I continued to press the former Secretary of State and will keep going with the new Secretary of State. I was delighted when the former Secretary of State announced in August:

“I am keen to see what we can do to keep fares down to something affordable. I will be looking at whether there is a way of doing this in the autumn.”

I am sure that the new Secretary of State, with all his vast experience in the ways of operating within Government and the Whips Office, will prove equally adept at obtaining the funds that are needed so desperately to ensure that price rises are reduced, and I look forward to working with him to achieve that.

We need to look at why fares are so high and how we can reduce the costs of the railways. Why do commuters in Britain suffer some of the most expensive tickets in Europe on some of its most crowded services? We have already heard some comments about this. I pay tribute to the interesting suggestions of the hon. Member for Wirral South (Alison McGovern), particularly on printing more information on tickets. That is an excellent idea and I hope that the Department for Transport will listen to it and take it seriously.

At the fundamental level, the main problem is chronic underinvestment in our railways. Government after Government have invested far too little in our most important transport network. Infrastructure spending has not kept up with demand. That has forced the

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railways into a downward spiral. An overcrowded, inefficient and unreliable service becomes far more expensive to run. The Office of Rail Regulation estimates that UK railways are up to 40% less efficient than their European counterparts, despite the cost of tickets. This cycle forces up fares and reduces the level of investment available, making for more expensive railways and a less good service.

Katy Clark: I agree with the hon. Gentleman, in his capacity as Liberal Democrat spokesperson, that historically there is a massive problem with underinvestment on Britain’s railways, but does he accept that the fragmentation of Britain’s railways and the role of the private companies compounds the problem greatly?

Dr Huppert: I thank the hon. Lady for her comments. She has been fairly consistent on this issue, which is not true of all those in her party. I was interested to note that the shadow Secretary of State carefully avoided making commitments on how the railway system is operated. At the time of privatisation, I was concerned about some aspects. For example, if I want to travel from Cambridge to London, I do not care if it is cheaper to go to Liverpool because I am trying to go to London. It may be cheaper—or wonderful—to go to Liverpool, but it is not the trip I wish to make. Having said that, renationalising now would create a huge amount of complexity in trying to move to that new world. I am not persuaded that it would be the right thing to do, but I would be happy to discuss it further with the hon. Lady.

Caroline Lucas rose—

Dr Huppert: I will take one last intervention on this point and then make progress.

Caroline Lucas: The hon. Gentleman suggests that it would be too difficult to bring the railways back into public ownership. If it were done on a case-by-case basis as the franchises came up, as with the west coast main line right now, there would not be any extra cost to the public purse; in fact, there would be a reduction in cost.

Dr Huppert: I thank the hon. Lady for her comments. I congratulate her on her new-found freedom and hope that she will enjoy not having the responsibilities of party leader, with the flexibilities that that brings. I suspect that she will continue to be very influential on future leaders of her party. I am happy to talk to her in more detail about how such an approach would work, but I do not think that it is as trivial as she suggests. We must avoid doing something that seems very good on the face of it but does not deliver an improved rail system. For example, passenger usage numbers went up quite significantly at the point of privatisation. I would not want to do anything that jeopardised the growth in the number of rail passengers, and I am sure that she would not want to do so either.

So what can we do to bring down rail costs? We need a more modern and more efficient system. That is why I was so pleased that despite the huge public deficit and the ongoing problems in the eurozone, this year over £9

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billion of investment was announced for our railways in the next five-year period. The Liberal Democrats and I were delighted to endorse that. The coalition has committed to electrifying over 800 miles of railways across the country, as well as to making a huge range of other improvements that will make a huge difference to passengers and to business. I was interested that last year’s autumn statement announced £1.4 billion of investment in our railways because, crucially, that provides £400 million more for railways than for roads. I cannot remember the last time any Government took the correct decision to prioritise expenditure on railways over roads.

As well as investing in lower fares for the future, we have to invest in lower fares now, as the excellent Campaign for Better Transport has pointed out. Over the next year, wages are set to rise by 2%, but fares could go up by as much as 3% above inflation—over 6%. Coalition means that one does not always get everything that one would most like to happen. I was pleased that last year the Government moved to RPI plus 1%, which is exactly in between our position and that of our coalition partners, but I cannot support the Conservative proposals for a rise of 3% above inflation for next year, nor the proposal in the Labour motion for above-inflation rises indefinitely. Liberal Democrats want a rate of RPI minus 1%, with fares coming down in real terms from now on. A lot of that would come from the 30% efficiency savings identified by the McNulty review. A previous Secretary of State announced that that money would be split between investment and money going back to the Treasury. We think that more of it should be used to bring rail fares down now and give the money back to people who pay. We would go further to simplify the fare structure and make it much more transparent, and make rail companies put forward the cheapest fares possible and pay refunds when services are below par. The Government are making some progress on that, but we will continue to push for more.

I am delighted that the Government have taken the difficult decision to invest in railways for the future. That is not an easy thing to do when times are tight; it would have been far better to invest more during the boom years. However, if we punish commuters and other travellers now, it could put people off railways altogether, especially those who are just starting work and those who are hardest hit by the ongoing squeeze. That would send out a terrible message about the affordability of public transport, drive down passenger numbers, and put our network on an unsustainable path. As the Campaign for Better Transport says, we cannot allow our railways to become a rich man’s toy. We need to find an agreement again over rail fares that will last for the rest of this Parliament. I strongly urge the Secretary of State to take up this cause strongly, as his predecessor did.

I hope that the Government will continue to look at the long-term strategic projects that are happening. To restore our railways to their Victorian zenith, we need a Victorian level of investment, and a vision to match. That is why I am delighted that the coalition is not only spending more on the railways than any of its predecessors since the Victorian era but committing to projects such as HS2. I am delighted that that is finally happening, but I am disappointed that, for decades, so many opportunities have been missed for greater improvements like that. Our lack of high-speed rail epitomises what

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has gone wrong in our railways in recent years, why fares are now so high, and why we face such capacity constraints. For years we watched European neighbours and Asian partners develop and build a comprehensive high-speed railway network. They have extended capacity, supported rail freight, released space on roads and reduced congestion. Despite calls over many years from Liberal Democrats, including my hon. Friend the Under-Secretary, British Governments felt that the cost of doing so was too high. Why invest the money when there is nothing to be gained in the here and now? Transport investments take time to deliver.

Those Governments, over many decades, were wrong. We have waited so long that we absolutely have to go ahead with it now. The west coast main line will have already reached capacity before the new high-speed line can be finished, and the costs now have to be borne in a downturn rather than during the growth years, when money was more plentiful.

It is right that we are putting our railways on a sustainable footing. They need investment and they need it for the long term. The burden cannot be taken by fare payers. Constant, year-on-year fare rises are utterly unsustainable; they will ultimately force people off the railways and bring down revenues. Governments have found it much easier to just patch up old lines and force passengers to deal with the same old problems and pass on the cost of an inefficient system. That was a terrible waste of the boom years.

I am delighted that by the end of this Parliament, Liberal Democrats in government will have made some of the tough decisions to make sure that we will have the efficient and sustainable railway network we deserve, but it has to be affordable to people. I hope that over the coming months we can reach an agreement with our coalition colleagues to prevent an RPI plus 3% rate; otherwise, a long-term investment could be utterly undone as we drive people from our railways irrevocably.

2.41 pm

John McDonnell (Hayes and Harlington) (Lab): The new Secretary of State is not in his place, but I welcome him to his new position. He said that it is somewhat daunting for him to have on his first day a debate about rail fares. All I can say is: wait until we get on to aviation. I look forward to introducing him to some of my friends: Bob Crow at the National Union of Rail, Maritime and Transport Workers, Mick Whelan at ASLEF and Manuel Cortes at the Transport Salaried Staffs Association. On a serious point, I am sure that the trade unions will show a willingness to meet the new Secretary of State on a regular basis and to work together to improve the system. If hon. Members look at many of the submissions received by the Transport Committee in recent years, particularly from the RMT, ASLEF and TSSA, they will see that many of the issues raised and many of the ideas proposed, particularly on ticketing, have been reflected in contributions by Members from all parties to debates, particularly those centring on fares.

The agenda needs to be worked on jointly with the Government. The focus is on fares as the major problem that passengers bear the brunt of. I believe that the role of the House is to protect our constituents—the travelling public—against many of the companies that are profiteering at their expense. The hon. Member for Northampton

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South (Mr Binley) gave an example of price increases in his constituency, where people are paying anything up to £6,000 or £7,000 a year to commute, and of how that is becoming an impediment to them maintaining work. That is happening right across the country, so I welcome the Government’s ticketing review and refer them to the evidence that the RMT has already provided to successive Transport Committee reviews of ticketing, in which we have emphasised the problems of the complexities of pricing.

On the performance of the companies with regard to their franchises and fares, it is unacceptable that, when a company reneges on its franchise commitments and then seeks to walk away from it, it is then allowed to bid for other franchises around the country. Any company that reneges on its existing franchise should be banned from being able to bid for another and profiteer at the expense of passengers.

Katy Clark: Does my hon. Friend agree that this is yet another example in the transport sector of the private sector getting into difficulties and the public taxpayer picking up the purse?

John McDonnell: Time and again, when rail franchises have collapsed, they have been brought under public ownership and control. We saw that with the First Capital Connect franchise in the south-east. When that service was in public ownership, it was one of the most efficient and cost-effective services. Unfortunately, the previous Government—this Government pursued this as well—put it out to the private sector again.

The Secretary of State referred in his opening remarks to the investment in electrification and high-speed rail. I wholeheartedly welcome that investment, but I have concerns about the High Speed 2 route. I am particularly concerned about how it has been consulted on. The two-stage approach and the development of the line—the two stages being those that link London to the midlands and to the north—were consulted on separately from the publication of the route to Heathrow, which will affect my constituency. Nevertheless, I welcome the concept of investment in high-speed rail for the future.

Great play has been made in this debate of the issue of reform and its impact on costs and fares. I think that all the rail unions will be willing to meet to discuss the reform of the current system of franchising and of the operation of the railways. I met Roy McNulty on a regular basis. He is a nice old buffer and I do not in any way disparage his commitment or the genuineness of his approach to the review of the railway network, but I have to say that, even under the previous Government, the terms of reference of the McNulty review were specifically limited and that his horizons were, therefore, limited. My hon. Friend the Member for Wirral South (Alison McGovern) has made the point that the comparisons with Europe were hardly straightforward. The comparison was between a franchising system and systems that were largely in the public sector, publicly owned and publicly managed. He was not allowed to look at what public ownership and public control could mean in this country compared with elsewhere. As I have said, the only time that such ownership has occurred here in recent years is when private sector franchises have collapsed and the public sector has taken them over and managed them efficiently and effectively.

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The problem with the McNulty review—this has been touched on—is that he envisages, at the most recent estimate, a cut of 20,000 jobs. That will have consequences for services, and many of our constituents have expressed concerns about that.

Mr Leech: The unions mentioned the figure of 20,000 job losses to our Transport Committee, but that figure was rejected by others in the industry, who said that the actual numbers were far lower.

John McDonnell: The range cited is anything between 5,000 and 20,000. Even if the figure is 5,000, a significant number of jobs will go. In those areas where the general proposals have been translated into concrete ones at the local level, passengers and communities have expressed consternation. For example, the west midlands is trying to translate some of the reductions in staffing into the service itself and faces 80 ticket office closures. That will result in a reduction of staff in the station, so there are concerns about losing the service and about security on platforms and at stations. As a result, a new campaign was launched in August and 40 main stations across the country were picketed by community groups and unions. The campaign was joined by the TUC, the Campaign for Better Transport, Climate Rush and a number of other groups. I issue a warning—perhaps I will send the Secretary of State a note about this—that the campaign was also joined by the women’s institute. Any Minister who takes on the 210,000 members of the women’s institute does so at his or her peril.

This point has been touched on by the hon. Member for Brighton, Pavilion (Caroline Lucas), but there needs to be a discussion about why the fares have increased and why the travelling public have been burdened by those increases over the years. We need to have a debate—I hope that this will happen under the new Secretary of State—about how we should organise our railways. We cannot ignore the understanding and appreciation that now exists of the impact of privatisation. I would welcome a more open debate in which people took a more agnostic approach to privatisation, rather than an ideologically committed one, as has been the case in the past.

I refer Members to the “Rebuilding Rail” report, which came out a couple of months ago. It looked at the value-for-money arguments of the existing franchising mechanism and compared the public subsidy that was put into British Rail with the current subsidy. That independent report found that public subsidy had doubled under the franchising system from £2.4 billion to more than £5.4 billion. From 2005-06 to 2009-10, the average subsidy going into the privatised system was £1.2 billion a year. The total subsidy under privatisation is now nearly £12 billion.

When we have had this argument in the past, a number of Members from all parts of the House have argued that the private companies that operate the franchises are paying a premium and putting money back into the system. I pay tribute to the detailed work of John Stittle, the senior lecturer in accounting at the university of Essex, in the “Rebuilding Rail” report. He looked at how the money has, in effect, been laundered through Network Rail. We have increased the public

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subsidies to Network Rail, resulting in a reduction in the track operational costs for private companies, which has enabled them to pay the premiums. Under privatisation, there has been a straightforward subsidy from the taxpayer to the private companies to run the system, the passengers have been hit by high fares, and the premiums that the companies pay back to the state, which they extol the virtues of, have actually been paid for by subsidies laundered through Network Rail. That is why we need a re-examination of the whole structure. I hope that we will now have that open debate.

The “Rebuilding Rail” report shows—this is partly reflected by McNulty—that the high costs that are resulting in high fares are a result of the complex structure of the franchising system. It highlights other issues such as the higher interest payments that were paid to keep Network Rail’s debts off the Government balance sheet; the debt write-offs that have occurred under privatisation; and the costs arising from the fragmentation of the system between numerous organisations and subcontractors, which my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) pointed out. The profit margins of the complex tiers of contractors and subcontractors are forcing rail fares up, because of their high costs. The level of the dividend payments to private investors is unacceptable to the travelling public when fares are increasing. As I said, there is an average subsidy of £1.2 billion a year and more than £11 billion of public funds have been paid out so far.

I hope that we will have some new thinking. I hope that we will again look at public ownership as an option. The hon. Member for Brighton, Pavilion demonstrated, although it was dismissed by the Liberal spokesperson, that independent examination of the matter has shown that public ownership could be reintroduced in the railway system at virtually zero cost. As the franchises end, they can be brought back into public ownership, as has happened with two franchises, at no additional cost. Even if the Government are not willing to go as far as the full renationalisation of the railway system, as I would wish, it is open to them to keep at least one franchise in the public sector to be the benchmark against which other franchises are judged. That would enable the system to be evaluated properly and for pressure to be placed on the private sector element of the system.

I hope that with a new Secretary of State and a new Transport team, we can have a constructive dialogue. However, I cannot see a constructive dialogue coming from passengers if they are hit in successive years by fare increases. Although I will vote for the Opposition motion, my view is not just that fares should be frozen or capped, but that the travelling public deserve a cut in fares. Many passengers feel that they are being fleeced, both through increased fares and because they have to pay through their taxes for increased public subsidies while a number of the private companies make unacceptable levels of profit.

Two weeks ago, when the franchising issue broke, Branson, the head of Virgin, expressed his concerns about losing the franchise. One article repeated the quotation from his finance director when the privatisation of the railways first happened: that it was their opportunity literally to print money. That is what many of the private companies have done as a result of the franchising

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system. I believe that that is obscene, as will many passengers when they face further price increases in their fares. As the hon. Member for Northampton South said, that puts people’s ability to maintain their employment in jeopardy.

I welcome the new Secretary of State. I support the motion and hope that we can go further at a later date. I hope that with the new rail team, we can have a wider debate that is unfettered by the ideological commitment to privatisation that there has been in the past.

2.56 pm

Mr Mark Spencer (Sherwood) (Con): I am grateful for this opportunity to speak. Like many colleagues, I wish the Secretary of State well, although he is not in his seat at the moment. It was great to see him back at the Dispatch Box. In taking interventions from Opposition Members, he was generous, flexible and accommodating—characteristics that he did not always demonstrate in his previous role.

This debate is simple for me. Although the railways are a complicated issue, the fundamental question is, who will pick up the tab of improving our railways? I am pretty disappointed by this debate because it is almost blatantly politically opportunistic. This is such a serious issue and it affects so many of our consumers and constituents that we should have more grace than to bat it about in this way and try to score cheap political points.

The answer to who will pick up the tab is, ultimately, the taxpayer. If we all agree that the railways need improvement and investment, and that the cash has to come from somewhere, ultimately the taxpayer has to pay the bill. The question is how to strike the balance between the ordinary taxpayer and the individual taxpayer who makes use of the service and rides on the trains. I put it to the House that someone working in the former coalfields of Sherwood, where rail services are pretty sparse, who earns less than £20,000 a year should not be put under pressure to pay taxes to give a banker who lives in Surrey a subsidised ride into the City. That is a difficult problem to solve, but we have to get the balance right between the ordinary taxpayer and the commuter. I am not sure that we have got the balance right today.

Standing at the Dispatch Box today, the Secretary of State inherits a situation that I do not envy: he comes to his role in the middle of a global financial crunch; he inherits a railway system that has faced enormous under-investment from a series of Governments; he faces the global price of energy going through the roof; and he has inherited a deficit from the previous Government that is difficult to solve.

Caroline Lucas: The hon. Gentleman talks about the importance of getting the right balance. Does he think the right balance has been struck given that, since rail privatisation, there has been a 7% drop in the cost of motoring and a 17% rise in rail fares?

Mr Spencer: I do not know what sort of car the hon. Lady drives, but I certainly have not seen a 7% drop in the cost of my motoring. I do not think we have got the balance right at the moment, but we have heard a series of speeches by Opposition Members about how nationalisation could improve the railways. I wonder

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whether people’s memories are so short that they forget how poor British Rail was. The Government who privatised the railways did not do it because British Rail was so fantastic.

John McDonnell: It is important in these debates that Members of all parties cut through the myths. May I refer the hon. Gentleman to a report by a think-tank called Catalyst, which analysed the subsidy given to British Rail in comparison with those in the rest of Europe and found it to have been the most efficient rail service in Europe? It also analysed the differences between the subsidies under nationalisation and those provided now, and again found British Rail to have been more effective and efficient. I will send him a copy.

Mr Spencer: I would be very grateful to the hon. Gentleman. I accept that this is a complicated issue, but when British Rail ran the railways it was not a panacea or a fantastic system. There were enormous delays for commuters, and the railway carriages were cramped. The service provided to commuters was shocking.

We could argue that there has not been enough progress, which I accept to a certain extent. Like the Secretary of State, I travel on the midland main line. It seems simple to say that capacity on that line could be improved just by making the trains a little longer, but the situation is much more complicated than that. The trains are already too long for people who want to get out of certain carriages at Loughborough station, so they have to move down the train to get off. Enormous investment is required in the midland main line, which is one of the most under-invested railway lines in the country, and I am delighted that the Government are putting in the cash to improve it by moving electrification further up towards the midlands and Yorkshire. It has been a long time coming.

I return to my constituents in Sherwood, who are not blessed with wonderful railway connections. If a resident of the town of Ollerton is employed in the city of Nottingham, their only option is to use buses or get in the car and drive. Public transport provision in my constituency is shockingly poor, and with the exception of the town of Hucknall, railway provision is pretty much non-existent. A taxpayer in Ollerton has to get in their car, for which they have paid road tax, and fund their journey by paying for petrol and the tax on it. They drive to the city of Nottingham and pay the workplace parking levy introduced by the Labour-controlled city council to earn their wage to pay taxes to support a banker in Surrey by cheapening his journey into the City of London. To someone working in Sherwood and earning twenty thousand quid, that does not seem acceptable. We sometimes need a bit of a reality check. I have heard a lot of complaints from colleagues in the south-east. I understand that they feel under pressure because of the increases in the cost of their rail tickets, but there is not a great deal of sympathy from hard-pressed, hard-working people in the coalfields of Nottinghamshire who are on low wages.

How will we solve the problem? Frankly, I am not sure that I have all the answers, but I would be delighted to work with the Secretary of State and the transport team to try to solve it. I believe that the answer is for the price of railway tickets to creep up, so that people can adapt and adjust, and for us to find ways of being more

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efficient. My hon. Friend the Member for Northampton South (Mr Binley) talked about efficiency savings, which will be the key to solving the problem. We must not only make use of taxpayers’ money for investment but find ways of spending it in the most efficient way possible. It is not tolerable or acceptable to my hard-working, tax-paying constituents that they have to keep dipping their hand in their pocket only for that money to be wasted rather than spent in the most efficient possible manner. If efficiencies are made, they will be able to benefit when they make use of the trains if they have the opportunity to come to London or to commute across Nottinghamshire. They cannot keep paying indefinitely without efficiency savings.

Probably the most shocking statistic that I have heard today is the comparison between the cost of flying and using rail. It is now cheaper to fly from Edinburgh to London than it is to go on the train. It seems bonkers that we find ourselves in that position, but it demonstrates how efficient the private sector can be in providing air journeys.

Caroline Lucas: The hon. Gentleman’s point is utterly specious. That situation has nothing to do with the effectiveness of a privatised airline and everything to do with the fact that airline fuel is subsidised whereas other fuel is not. If we subsidise domestic flights, it is not surprising that railways will be more expensive. Will he follow through on the logic of his argument and say that the Government will consider getting rid of the subsidy on domestic flight fuel?

Mr Spencer: I certainly think that we should examine how railways fund their fuel and energy supplies, and we are considering electrifying lines so that they are more efficient. I know that the hon. Lady is talking about aviation fuel, but I make the point that some rail lines, such as the midland main line, run on diesel rather than electricity. I am sure that the carbon footprint of those journeys will be of interest to her, and I wholly accept that we should continue to examine the matter.

I cannot reiterate enough the importance of getting the balance right between the commuter paying and the taxpayer paying. It is easy to forget that hard-working people doing fairly low-paid jobs are under equal pressure and also have to pay for transport to work. It is wrong to suggest that we can simply reduce rail fares.

I was aghast at some of the comments of my Liberal colleague the hon. Member for Cambridge (Dr Huppert), who is no longer in his place. He said that cutting the price of some rail tickets was Liberal Democrat policy. I hope that when the Minister responds, he will assure us, as a Liberal Democrat member of the Government, that the Liberal Democrat policy and the Government’s policy are fairly closely aligned. In the land of buttercups, rainbows and daffodils where my colleague seems to live, things do not seem to balance out as I understand them in the real world.

I look forward to the Minister’s response and hope that as the Secretary of State settles into his role he will consider the whole country, not just the commuters. They are obviously under pressure as they have to pay for their tickets, but he should also consider the hard-working taxpayers.They do not have a lot of spare cash and cannot keep dipping into their pockets for it.

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Several hon. Members rose—

Mr Deputy Speaker (Mr Nigel Evans): Order. To accommodate everyone, I am going to introduce a six-minute limit.

3.8 pm

Caroline Lucas (Brighton, Pavilion) (Green): People in my constituency have simply had enough of the rising cost of public transport, and the latest above-inflation rail fare increase is just about the last straw. Worried Brighton residents repeatedly tell me that they are already suffering from below-average earnings and simply cannot afford the proposed increases. As I mentioned earlier, one man told me how he had to give in his notice at his job in London because he simply cannot afford to get there. Now he is unemployed because he could not afford his rail fare.

Much has been said today about the impact of spiralling ticket prices on cash-strapped commuters, who are rightly furious that trains continue to be overcrowded and unreliable as well as overpriced; that public transport options are not fully integrated; that smart ticketing is not the norm; that trains are still too hot in the summer and too cold in the winter; and that the toilets do not work, or are simply non-existent on some train services from Brighton. That is a serious equalities issue. I have been contacted by many Brighton residents who want to be able to use the train but have health problems or are elderly. The fact that there are not toilets on the trains means that they can no longer use them. As a daily commuter between London and Brighton, I know only too well how accurate many of those complaints are. When we urgently need rail to play a role in reducing greenhouse gas emissions across the transport sector and contributing to improved air quality, the system should be better.

Fares should be managed as part of an overall strategy of making public transport more integrated, more comprehensive and more affordable, helping people to leave their cars at home and providing an attractive alternative to flying for longer journeys within the UK. Yet, since privatisation, the cost of train travel has risen by 17% in real terms compared with a 7% drop in the cost of motoring. Those higher fares mean that that gap will now widen. Moreover, the rail fare increases announced a few weeks ago represent an unacceptable tax on rail commuters, given that the percentage increase above the 1% written into the franchise agreements flows directly to the Treasury.

I welcome today’s motion as a step in the right direction, but I support the suggestion of the hon. Member for Cambridge (Dr Huppert) that fares should not be allowed to rise at all—if anything, they should come down. I regret that there is no Liberal Democrat amendment on the Order Paper to that end. However, we need to go much further. The controversy over the west coast main line franchise shows that what people want most is some kind of stability on the railways. They are not impressed by one unaccountable company snatching control from another with promises that they may never deliver. Nor are people happy that the cost to the public purse of running the railways has risen by a factor of between 2 and 3 times since privatisation.

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The hon. Member for Hayes and Harlington (John McDonnell) has already mentioned the report “Rebuilding Rail”, which I warmly commend to the House. It makes cogent arguments explaining why, under privatisation, there are much higher costs to the public. As the hon. Gentleman said, they include higher interest payments to keep Network Rail’s debts off the Government balance sheet; costs arising as a result of the fragmentation of the rail system into many organisations; profit margins of complex tiers of contractors and subcontractors; and dividends to private investors.

Mr Binley: Will the hon. Lady give way?

Caroline Lucas: I will not, simply because of time.

The only way to sort out the mess and waste, the rising fares and overcrowding is to take back control of the railways. I am not afraid to call that nationalisation.

It is time to make public transport a public service again, and to nail the myth that buying back assets that have been sold off would be too expensive. A step-by-step approach would allow the railway’s assets to be reacquired for the public at minimal cost and with substantial ongoing savings over time.

Mr Binley: On the basis that the hon. Lady will get an extra minute, will she give way?

Caroline Lucas: I have just remembered that, so I am delighted to let the hon. Gentleman speak.

Mr Binley: I am most grateful. Is the hon. Lady really saying that she wants to return to a nationalised British Rail? Is she also saying that privatisation is bad and that all the other privatised sectors have not cut costs? Or is the rail sector the only one that has not? How does she explain that?

Caroline Lucas: I refer the hon. Gentleman to Deutsche Bahn, SNCF and several railways in Europe that run perfectly good public sector railways with much lower fares than ours. I am not necessarily saying that we should go back to British Rail; I am saying that we should learn from that experience. We might in future have much greater democratic control, with passengers involved in the decision making. Far more of running the railways might be delegated to regional level. We do not have to go back to something—we can go forward to something and learn from the best of what is happening in many European countries and in the rest of the world.

The proposal that “Rebuilding Rail” and others are considering is a more or less cost-free process, whereby when the franchises expire or companies fail to meet the criteria, they could be acquired on a case-by-case basis. New rolling stock could be directly procured, making the process far cheaper than the current leasing arrangements, and fair price regulation could be introduced to bring down the cost of leasing existing rolling stock from its private sector owners.

We also need to bring Network Rail’s debt back on to the Government’s balance sheet. I appreciate that the Government will blanche at the very thought, but doing that would reflect the reality of the situation and result in much lower interest payments.

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According to calculations from “Rebuilding Rail”, reuniting the railways under public ownership could save more than £1 billion a year of taxpayers’ money. To put that figure in context, the money that we would have saved if rail had not been privatised could have been used to cut fares by up to 18%. The matter needs to be properly examined, and I am deeply upset that the Conservative ideological position means that the proposal is dismissed simply because it contains the words “nationalisation” or “public ownership.”

Mr Marcus Jones (Nuneaton) (Con): I think I am following the hon. Lady’s logic. However, if the perfect answer for the general public is to renationalise the railway, why is there such a large petition about the west coast main line, which supports the continuation of a private company’s running that route?

Caroline Lucas: I imagine that that is because there was no properly public option on the ballot paper, as there was with the east coast main line, which was taken back into public ownership. Plenty of polls show massive support for bringing the railway back into public ownership. A majority of people want that. I suggest that the hon. Gentleman consider that.

In Europe, passenger rail services are much cheaper and services are better, and between 80% and 100% of train services are run by publicly owned companies. Those two facts are not unconnected. Despite what some opponents claim, there is no EU requirement for the railways to be privatised. Other European countries have accommodated EU legislation, while largely or entirely retaining public ownership of their railways, by ensuring that there is separation between the body that is responsible for passenger train operations and the subsidiary company that is responsible for capacity allocation and access charges.

The Government should know that there is a problem, since the McNulty review, commissioned by Labour but delivered to the coalition, clearly highlighted excessive costs in the UK rail industry. That report also showed that privatisation’s promise of innovation simply has not materialised. Both McNulty and the Transport Committee noted that, in fact, innovation has been actively discouraged by the disjointed and complex nature of the privatised railways.

Genuine, at-risk private investment, as opposed to private capital expenditure that is underwritten by the Government, makes an insignificant contribution to the railways, representing about 1% of investment. That is substantially less than the additional costs that arise from a privatised structure. Nor has efficiency improved in the hands of the private sector—despite often being cited as another major benefit of selling off public services. In fact, there has been an increased number of administrators and managers, as well as duplication of functions in different private companies, and staff who have to be employed to ensure that everyone talks to one another and knows what is going on. It has been estimated that the cost of those back-room staff has increased by 56% since privatisation, measured per train kilometre—money that would have been better spent keeping rail fares affordable and investing in real improvements.

Britain was once world famous for its trail-blazing and hugely successful railway, but today, privatisation is failing passengers, the economy and the environment.

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Unless it returns to public ownership, Britain will struggle on with a disjointed, complex and often dysfunctional railway system that regularly makes commuting a miserable experience and puts us to shame internationally.

3.17 pm

Gordon Henderson (Sittingbourne and Sheppey) (Con): I am in a difficult position because I support the sentiment, but oppose the motive behind the motion. The motive is opportunism of the worst kind.

I support the sentiment because I am very concerned about hard-pressed rail commuters in Sittingbourne and Sheppey, and I want them to be helped. My hon. Friend the Member for Sherwood (Mr Spencer) compared his constituents and commuters in the south-east. I should point out to him that only a small percentage are bankers travelling to the City of London. The vast majority of my constituents are no better off than his.

Let me read out part of a letter—one of many—that I have received. It states:

“Dear Mr Henderson,

Once again I find myself writing to you on the subject of rail fares. As you will have seen in the press, the Government announced that rail fares will rise in January by an average of 6.2%. By my calculations, this will bring the cost of a non-High Speed, train only season ticket from Sittingbourne to Victoria to £3,954.88. My wife and I both commute from Sittingbourne to Victoria to work in Westminster and the increase will mean the cost of getting to work will take 22% of our combined take home pay—the increase will hit my wife particularly hard as it will represent 30% of her monthly income. The rises come at a time when many people, including us, are experiencing frozen pay or pay cuts.

Theresa Villiers said on the BBC yesterday that the increased fares will ‘make life better’ for rail users by paying for improvements.”

Henry Smith (Crawley) (Con): The point about investment in rail is important. I commute into London most days, and I welcome the £26 million investment going into Three Bridges station, and the £53 million investment that will go to upgrade track capacity at Gatwick station.

Gordon Henderson: My hon. Friend is right about investment, but commuters on Southeastern railways have heard the same tired old tune, year in, year out, and frankly they have stopped believing it, if they ever did. We may have the Javelin service into St Pancras, but that is hardly high speed as it spends most of the journey on the tortuous route through Strood and Gravesend.

The letter continues:

“High speed also means higher cost, due to the supplement charged to travel beyond Gravesend. The service into Victoria has deteriorated over the years to the point where most “fast” trains take almost an hour and 10 minutes to travel from Sittingbourne to Victoria”.

Only 30 years ago the journey was 50 minutes, so travel times have gone up rather than down. I suggest that those who support High Speed 2 consider the impact of High Speed 1 on my constituency.

That letter just about sums up the frustration felt by my constituents—frustration that did not happen overnight but has been bubbling up for many years. The motion calls on the Government

“to restore the one per cent above inflation cap on annual fare rises”.

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My constituents, however, have had to pay fares linked to the retail prices index plus 3% for many years because that formula was written into the franchise agreement for Southeastern railways, which runs trains in north Kent. That greater fare increase in Kent was to pay for improvements that were allegedly introduced in the area prior to April 2006, although my constituents often wonder what those improvements were. If those improvements were HS1, that would add insult to injury because people find themselves either paying for a superfast service that is not fast and goes to a London station to which few of them want to travel, or paying for a standard train service that takes longer than it did 30 years ago.

Katy Clark: Is the hon. Gentleman aware that the invitation to tender for the new intercity west coast franchise allows for increases in rail fares of 8% above inflation in 2013 and 2014, and 6% above inflation for the rest of the franchise? Does he share my concerns that yet again, such increases will not lead to proper investment in the service?

Gordon Henderson: I share the hon. Lady’s concern because my constituents have a similar problem. The franchise agreement with Southeastern also set out the level of subsidy that it would receive. That is important because the subsidy started at £139.9 million in year one, reducing to £24.7 million by year seven. In year eight, Southeastern will be expected to pay a premium of £9.3 million to the Department for Transport. It does not take a genius to work out that if the Government expect Southeastern to pay them a premium, rail fares will have to rise to fund it.

Who negotiated that franchise agreement? The Labour Government did. Indeed, their stated policy was to recruit more of the cost of the rail service from those who use it, rather than relying on the general taxpayer to subsidise it. It is, therefore, hypocritical in the extreme for Labour Members to complain now about a system of rail fare pricing that they introduced and supported. I greatly fear that spiralling rail fares will have a detrimental effect on commuters in my constituency, and will directly hit hard-working families who are already struggling. The increases will hit even harder people who have recently lost their jobs, such as those at Thamesteel who will have to commute some distance to find a job.

Mark Reckless: Does my hon. Friend agree that this is particularly difficult because Kent has some of the lowest average incomes in the south-east yet some of the highest commuter fares? The hon. Member for Brighton, Pavilion (Caroline Lucas) mentioned costs in her constituency, but the cost of commuting from Chatham, which is only 30 miles away, is about £100. Brighton is almost 50 miles away, yet the cost is almost the same.

Gordon Henderson: I agree with my hon. Friend. The cost per mile of rail travel from our part of Kent is one of the highest in the country, and commuters in my constituency have had to put up with that for a number of years. That is the issue I wish to address, and I welcome the Transport Secretary’s offer to meet Kent MPs. Although he is not present in the Chamber, I assure him that at that meeting I will press for help for commuters in my constituency.

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As I said at the beginning of my remarks, I am in a difficult position. I support the sentiment of the motion but oppose the motive behind it. For that reason, I will abstain, as I hope will all my fellow Kent MPs.

3.25 pm

Katy Clark (North Ayrshire and Arran) (Lab): It is a pleasure to follow the hon. Member for Sittingbourne and Sheppey (Gordon Henderson). I listened with great interest to what he said, and I assure him that I was in a similarly difficult position on many occasions during the previous Parliament. I was proud of the money that the Labour Government ensured was invested in the railways, but I did not necessarily agree with all the policies on the structure of the railways. The hon. Gentleman described rail fare franchising arrangements, and that area needs to be looked at again. It is, therefore, regrettable that no lessons seem to have been learned especially, as I outlined in my intervention, in the invitation to tender for the west coast line.

The general public are clearly outraged by the Government’s decision to increase the annual cap on rail fares to 3% above inflation in January 2013 and 2014. Many commuters will find that the cost of tickets increases by as much as 11% as a direct consequence of the Government’s decision to give back to private train companies the right to increase the cost of some tickets by an additional 5% on top of the increase set by Ministers. The position is slightly better in Scotland, but there, too, we will see significant increases in rail fares that cannot be afforded at the moment.

A number of hon. Members have made an effective business case for why people simply cannot afford increases in train fares at this time. The hon. Member for Brighton, Pavilion (Caroline Lucas) referred to a constituent who has decided that they can no longer work in London as a result of the fare increases, and many hon. Members will have been visited by constituents for whom the cost of transport, whether train and bus fares or something else, has been a prohibitive factor in seeking employment.

Powerful contributions have been made about the need for a simpler ticketing structure because many who use the railways simply do not understand how the current system operates. Government policy, and the direction of travel of some of those managing the railways, seems to be moving towards a situation in which we will rely on machines rather than on people. We have heard about the job losses that may result from the McNulty review, but our constituents do not want a future railway with stations that have no people to treat them as customers and where they have to use machines to buy tickets, where they do not have the security of knowing that staff are present, and where they have to get on trains that have CCTV equipment rather than personnel to help them. If that is the direction of travel, I hope that the new Secretary of State for Transport will bring some common sense to the agenda and recognise that that is not the kind of railway network we want for the future.

Politics is about choices. It will be interesting to watch the debates within the Government over the coming period not only on railways, but on aviation and roads. The Labour Government made a choice in favour of the railways. We might not have done everything we would have liked to do and we might wish we had done

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more, but there was a commitment to the railways. There are incredibly strong environmental reasons why we need to make the choice in favour of railways rather than other modes of transport, and why we need policies to ensure that people choose public rather than private transport in as many situations as possible. I therefore believe the Government are going in completely the wrong direction with their policy of rail fare increases.

The National Audit Office report on the impact of fare increases on Government income and private train company profits warned of the risk that the benefits of any resulting increase in passenger revenues will not be passed on to taxpayers, but will result simply in increased train operating company profits. A number of hon. Members described how the model of railway ownership takes money out of the railway system and puts it into the hands of those who profit as a result of ownership—the railway companies. We need to look forward to simplified, cheaper railways, but the Government’s decisions in the past couple of months are taking us in completely the wrong direction.

3.31 pm

Priti Patel (Witham) (Con): I congratulate the new Department for Transport Front-Bench team on their positions. I am delighted that my right hon. Friend the Member for Chelmsford (Mr Burns) is in the team, because he is a constituency neighbour—I think he will recognise some of the points I will make in my short contribution.

All hon. Members have made valid points on the challenges of rail fares, the fare structuring system and, as the hon. Member for North Ayrshire and Arran (Katy Clark) has pointed out, the difficult political choices that have to be made in government. I would like to think that, before the autumn statement, my right hon. Friend the Chancellor will listen to and take on board many of the concerns raised by hon. Members on behalf of hard-pressed commuters and rail users.

The Opposition motion calls for a fare increase of RPI plus 1, but as colleagues from the Kent constituencies have said, the Labour Government’s policy was an increase of RPI plus 3 in the area covered by Southeastern. Government Members should not listen to lectures on fare increases, because we have all had fare increases in the past. My right hon. Friend the Secretary of State for Transport mentioned a fundamental aspect—the basket system by which the figures are calculated. Labour did nothing about the basket system when in power, leaving many commuters paying above-average increases.

Like all hon. Members’ constituents, mine are concerned about above-inflation rail fare hikes, but the increases are harder to stomach when passengers see no improvements in services. Commuters in Witham have had continual increases in rail fares, so they are appalled that they have had no improvement in services. Under the Labour Government, there was no investment in Essex rail infrastructure, while commuters faced horrific delays.

It currently costs £4,700 per year to travel from Witham to London, and almost 4 million passengers a year use stations in my constituency—2.2 million use Witham station alone. We have come to the conclusion that enough is enough. I appreciate that there is a new Front-Bench team, but I ask them to recognise that the

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east of England, including Essex, has suffered for far too long from the effects of underinvestment and price increases. If nothing else, it is about time that the regional anomaly, which has existed not only for the past few years, but for decades, was rebalanced.

Like all regions, the east of England is growing. Investment in rail is essential to jobs, investment and economic growth. I should like to give a plug to work that has taken place within the eastern region. Essex, Suffolk and Norfolk MPs have pulled together a team to work with our councils and local enterprise partnerships, and, importantly, rail user groups, which are made up of the very people who shell out the money for the huge prices, to develop a rail prospectus for the greater Anglia franchise—I know the Minister is familiar with the document because he supported and made a tremendous contribution to it.

The document is about not only rail fares, but investment. I have taken the opportunity to plug the prospectus, but I should also point out the highly significant economic benefits not just to the region and our commuters, but to the country. I hope that the new Department for Transport team consider the points I and others have made in the debate, and that they think about how we can start rebalancing rail fares and rail investment.

3.36 pm

Lilian Greenwood (Nottingham South) (Lab): I join colleagues on both sides of the House in putting on the record my congratulations to the new Transport Secretary on his appointment. It is fitting that he should have made his debut in this debate. I know he is unable to be in the Chamber at the moment, but I am sure he will look carefully at all the arguments put forward by colleagues.

I listened very carefully to the Transport Secretary’s contribution, and was somewhat disappointed that he said very little about rail fare increases. Perhaps the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), will say more about them, or perhaps the Secretary of State will return to fare increases in the coming days or weeks as he finds his way in his new brief and tell us exactly what he will do to protect passengers, what he thinks about the flex system, and whether he will lobby the Chancellor to keep rail fare rises to RPI plus 1%, as the Opposition propose. The Transport Secretary has an opportunity to push for the reintroduction of a real cap on fare rises, and I very much hope he takes it.

This debate has been about the general and the particular. There is a general crisis in the cost of living. Household budgets are under enormous pressure as living costs climb ever higher. The Opposition have called today for the Government to take a particular action—a further U-turn that would be welcomed by the constituents of all hon. Members in the Chamber. The Government could reverse their decision to allow the dramatic rise in rail fares, which, for many people, have come at the worst possible time.

The Government could resist the growing burden on hard-pressed passengers. The Labour Government put in place a strict cap on rail fare rises of 1% above inflation. It is a cause of great regret, both in the House

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and more importantly in the country, that the current Government chose to give the rail companies free rein over regulated fares. The removal of the cap, coupled with the restoration of flex, will lead to fare rises of up to 11%. That is a real blow at a time of pay freezes in both the public and the private sectors, higher-than-expected inflation and a contracting economy. The Campaign for Better Transport has warned that the cost of season tickets will go up three times faster than salaries. Without economic growth, the pain will only increase in intensity.

My hon. Friend the Member for Wirral South (Alison McGovern), who is not in her place, clearly explained how many people, particularly commuters, need to travel at particular times and cannot shop around for cheaper fares in the off-peak or super off-peak periods. They must simply pay up and see their disposable income hit. To give just one example, when one of my constituents needs to commute from Nottingham to Leicester to go to work, a season ticket currently costs £1,672 a year. Under the Government’s plans, it is estimated that that figure will rise to £1,937 by 2015, which would represent 7.38% of the average regional salary. Pity the commuter from Leeds to Hull whose season ticket will go up from £3,732 to £4,323, an eye-watering 16.5% of the average regional salary. In the most extreme cases, a season ticket could cost up to 25% of the average salary.

As my hon. Friend the Member for Harrow West (Mr Thomas) noted—and the hon. Member for Northampton South (Mr Binley) agreed—commuters in the south-east are routinely spending 15% or more of their salary simply on getting to work, and many will be priced out of work altogether. The example given by the hon. Member for Brighton, Pavilion (Caroline Lucas) was helpful in that respect.

The issue is not just affecting commuters. As my hon. Friend the Member for Huddersfield (Mr Sheerman) said, this also hurts businesses in his constituency whose staff need to travel to London to sustain and grow future business. Meanwhile infrastructure spending is being scaled back and the Government seem set on using the McNulty report as cover to withdraw staff from stations, despite many passengers relying on them to find the cheapest fares, which—as many hon. Members have pointed out—cannot easily be done using automated ticket machines, never mind the other concerns about unstaffed stations.

The fare rises will also have a particularly serious impact on those on low incomes, including pensioners and young people, who are already feeling the squeeze as the cost of living rises. When I speak to young people in my constituency the cost of transport is one of the key concerns that they raise, and I think the high cost of train travel comes as a real shock to many of those leaving home for the first time to go to university. For pensioners, the fare rises are compounded by cuts to alternative modes of transport. Bus services have been cut back and the withdrawal of support for long-distance coach travel is hitting pensioners hard.

Before the last election, someone said:

“The fares issue will not go away. It will be the biggest inhibitor of train travel in the years to come.”—[Official Report, 25 February 2010; Vol. 506, c. 166WH.]

Those are not my words, but those of the Under-Secretary of State for Transport, the hon. Member for Lewes. In fact, we have heard many warm words on fares. Scores of coalition MPs have been telling their local papers

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that they opposed the rise in fares, despite voting for them in this House. They will be glad to have the opportunity to set the record straight, and I trust that all those hon. Members will join us in the Lobby today.

Dr Huppert: The shadow Secretary of State also suggested on several occasions that we had voted for RPI plus 3%, but I do not recall doing so. Can the hon. Lady point to the dates of the Divisions in which any hon. Member specifically voted for RPI plus 3%?

Lilian Greenwood: The hon. Gentleman will find that we have had previous debates on transport and the cost of living when he had an opportunity to vote for our proposals, which would have reduced the increase in fares.

Dr Huppert: Will the hon. Lady give way again?

Lilian Greenwood: Not at the moment.

We have heard many warm words on fares and coalition Members have been supportive of the Government’s position. We have been promised an end to “inflation busting fares” in a press release from the Department for Transport, and both Liberal Democrats and Conservatives promised “fair pricing for rail travel” in the coalition agreement. For all those fine words, what has been delivered? Fares will rise by 3% above inflation, flex will be reinstated, and there will be overall rises of up to 11%. The hon. Member for Cambridge (Dr Huppert) likes to pretend that that is nothing to do with his party, but it is his Ministers, including the Under-Secretary, who are imposing these measures.

The new franchises also hand operators unprecedented license over the quantity and quality of the services that they run. Ministers must mind the gap between rhetoric and reality. For too many passengers the reality of rail travel is overcrowded carriages, repeated delays and needlessly complicated pricing structures. Instead of tackling the root causes of waste in the railways, the Government are merely handing the cost on to passengers. We are keen to see a more efficient rail industry, but passengers face unaffordable fare rises now. There have been enough empty pledges from this Government. Their words are cheap, but the fares are dear, and the rail companies count the profits. There has to be another way.

Less than a month ago, the former Transport Secretary, now Secretary of State for International Development, said that she wanted to find a means of bringing

“fares down to something affordable.”

This motion offers just such a means. I hope that the new Transport Secretary will be prepared to stand up against vested interests for the public good, and I hope that Members from all parties will support this motion to help ease the burden on rail passengers.

3.45 pm

The Parliamentary Under-Secretary of State for Transport (Norman Baker): I thank all those who have contributed to this debate, and I recognise the strong feelings that rightly exist about rail fares across the House and in all parties.

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Reforming and modernising Britain’s railways is one of the Government’s top priorities. We are already delivering the most ambitious rail investment programme since the Victorian era to boost capacity and improve services. In July, we announced £9.4 billion of network upgrades across England and Wales for the period between 2014 and 2019, and a £4.5 billion contract to supply Britain with its next generation of nearly 600 intercity trains. As we heard earlier, we have committed to 861 miles of electrification—not nine miles, but one in nine miles of the entire network.

New tracks and trains are only one part of our blueprint for a better railway. We are also taking a fresh look at fares and ticketing to reflect the latest technologies and meet the changing needs of passengers. Such a review is long overdue. Many rail users find the current system archaic and impenetrable—we have recently concluded a public consultation inviting views on how we might make it more transparent, more accessible and more flexible.

One of the key drivers of change will be smart ticketing technology. In London, the Oyster smartcard has transformed public transport, providing passengers with a more efficient and convenient alternative to paper tickets, and accelerating the flow of people through busy rail and tube stations. Smart ticketing could pave the way for a new fares system offering discounts for passengers who avoid the busiest services. As well as benefiting individual rail users, it would help us make better and more efficient use of train capacity so the savings realised can be ploughed back into keeping fares affordable.

The Government’s ambition is for all public services to become digital by default. That means helping as many people as possible to switch to digital channels, while continuing to provide support for the small minority who cannot make the switch. Buying a train ticket should be no different. The hon. Member for Rutherglen and Hamilton West (Tom Greatrex) referred to the complexity of tickets and the difficulties people can have with ticket machines. Those two matters are being addressed fairly and squarely by the fares and ticketing review that the Department is undertaking.

The challenge for train companies, therefore, is to make buying a ticket online or from a machine just as easy as from a station ticket office. Purchasing a rail ticket should be a straightforward transaction, not an obstacle course. So as part of our reform programme, I want to ensure that when passengers buy tickets, they can navigate the choices available and find the best ticket for their journey, quickly and clearly. Train companies need to improve their machines so that they sell the full range of tickets and guide passengers through each step of the process. As I said, that is all part of the fares and ticketing review that is now under way.

As I mentioned, we are all concerned about rail fares and we all want an end to above-inflation fare rises, but it is important to put the Opposition’s motion in context. Under them, rail fares increased by 1% below inflation, but that was changed to 1% above inflation in 2004. Under the previous Government, therefore, we had years of above-inflation rises, and it appears from the motion that it would still be Labour’s policy, were it to come to power, to have years of above-inflation rises. We want to end these above-inflation rises, not continue them indefinitely, as the motion suggests doing. It looks

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a little opportunistic to talk about fares being capped, given that the record of the previous Government was one of continual year-on-year above-inflation increases.

We have heard about the issue of flex, which is the ability not only to increase fares above inflation, but—the Opposition did not mention this—to increase a lot of fares below inflation. The previous Government introduced flex in 2004, and it ran through until 2010, so it was in operation for several years. A 2010 deed of amendment introduced by the then Transport Secretary reads:

“With effect from 00.00 on 1 January 2010 Schedule 5.5 of the Franchise Agreement will be amended as set out in the Appendix to the Deed… From 00.00 on 1 January 2011”,

which is just after the general election, Members may note,

“the amendments to the Franchise Agreement set out in this Deed of Amendment shall be reversed”.

So there was a deliberate policy from the previous Government to end flex only for one year, and over a period that happened to cross the general election.

Maria Eagle: My noble Friend Lord Adonis made it clear that it was his policy to put an end to flex full stop and that it remained his intention to do so. The deed to which the Minister referred was a one-year way of dealing with it, but of course we were running into a general election, and there are rules about binding successors. Is he asserting that my noble Friend has been misleading the Transport Committee about his policy intentions?

Norman Baker: I am merely reading out the legalistic words that the previous Transport Secretary put in place stating that the policy was to be reversed on 1 January 2011. The facts speak for themselves. I have to ask, however, if the Opposition’s policy is now to end the flex, why the Welsh Assembly Government, run by the Labour party, continue to operate it. I have not heard any words from the Opposition condemning the Welsh Assembly Government. Or is it all right to have flex in Wales, where Labour is in control, but not in England, where we are determining policy for rail matters over here?

I am interested in a point that several Members made about the split of the responsibility for paying for the railways between passengers and taxpayers. The point about where that balance should lie is very important. The Opposition spokesman will know that Labour’s plan was for a 70% passenger and 30% taxpayer split. In 2010, the percentages were 64% passenger and 36% taxpayer, so one assumes that Labour wants to increase the percentage in order to reach its 70% figure. Our policy priority does not include worrying about the split per se, but is about getting efficiencies into the rail network—a point that my hon. Friend the Member for Northampton South (Mr Binley) rightly made. I can assure him that we are taking great steps to improve the efficiency of the rail network, and by and large we have adopted the report from Roy McNulty, which was a helpful contribution to the debate on the rail network, in order to bring down our costs.

Roy McNulty indicated that costs were about 40% above what they should be, and we are determined to make those savings. We have identified savings of £1.2 billion in control period 4—the present control period—and

5 Sep 2012 : Column 294

up to £2.9 billion of further savings in control period 5. There are further savings to be made through genuine efficiencies—not cuts—in how the railway is run. One, for example, is the alliance project between Network Rail and South West Trains. I am not quite sure whether the Opposition support that trial, but it is delivering real savings and efficiencies, eliminating duplication, reducing the cost of the railway and providing a better service for the people who use South West Trains. That is an example of how efficiency savings can improve services. I am happy to say that it is now happening on South West Trains.

Lilian Greenwood: The Minister has talked about the balance between taxpayers and fare payers. He will know that the National Audit Office said that higher rail fares might simply lead to higher profits for train operating companies. How will he ensure that taxpayers benefit, not the private companies?

Norman Baker: It is our intention, once the savings coming through from Network Rail are realised, to end the era of above-inflation rail fare increases introduced by the previous Government. There can be no doubt about our intention to do that.

Let me deal with the issue of ticket offices raised by Opposition Members, including the hon. Member for Hayes and Harlington (John McDonnell), for whom I have much respect when it comes to railway matters, and the hon. Member for Nottingham South (Lilian Greenwood), the shadow Minister. It is worth pointing out that in the last five years of the previous Government, Ministers approved cuts in opening hours at approximately 300 stations. The number since the coalition Government came to power is soon to be 34, so there were far more cuts to ticket office hours under the last Government than there have been under this Government. In fact, the shadow Secretary of State might want to know that ticketing hours have actually increased at a number of stations since this Government came to power. We do not hear much from the Opposition about that either.

I do not want to make my speech simply a matter of rebutting the Opposition’s motion. It is important to get rail fares down as soon as possible and this Government take that very seriously indeed. We are committed to reducing and abolishing above-inflation rises as soon as we can. To answer the point made by my hon. Friend the Member for Sherwood (Mr Spencer), I think both sides of the coalition are committed to buttercups, rainbows and daffodils. Both of us want to end the era of above-inflation increases as soon as we practically can, and the sooner we can make the savings that the Opposition are so reluctant to see—and which, by the way, they have no plan to deliver—we can end that above-inflation record, which I am sorry to say the Labour party introduced when it was in power.

Taxpayers and indeed passengers have been paying over the odds for the railway. The fiscal position demands that the high level of public subsidy for rail in recent years be reduced. As a Government, we have a duty, which we take seriously, to keep rail travel affordable for as many people as possible and to minimise the level of taxpayer support for rail by bringing forward sensible and workable efficiencies. Achieving that will depend on securing the efficiency savings that we have outlined in our rail Command Paper. That is why it is so important that the whole industry works together to a shared agenda to deliver for both passengers and taxpayers.

5 Sep 2012 : Column 295

Opposition Members have referred to the coalition agreement. We stand by the words in the agreement about getting a fair deal for passengers, and we are determined to do so. The present Secretary of State has already indicated, in his first contribution in the House in that role, his concern about rail fares, and his predecessor, the right hon. Member for Putney (Justine Greening), did likewise. Yes, there was pressure last year to ensure that we did not have RPI plus 3%. That pressure was successful and we have committed—once savings are found and the improvement in the wider economic situation permits—to reducing and then abolishing above-inflation rises in average regulated fares.

The hon. Member for Brighton, Kemptown—[Interruption.] I beg your pardon, Mr Deputy Speaker: the hon. Member for Brighton, Pavilion (Caroline Lucas)—I should know that, shouldn’t I?—referred to fares. I do not pretend that some fares are not excessive; some of them definitely discourage people from travelling by train. That is part of the reason why we are having the fares and ticketing review. She referred to trains being overcrowded, but to be fair and put the matter in context, she needs to recognise that one of the reasons why the trains from Brighton are overcrowded—I know them very well—is that Southern has introduced a large number of cheap fares, which local people are taking advantage of. There are now people standing off-peak all the way from Lewes or Brighton to London because fares have been reduced to an attractive level. In fact, we have a selection of fares. There is an issue about peak fares—that is part of the fares and ticketing review—but many off-peak fares are very cheap indeed.

I can assure the hon. Member for Wirral South (Alison McGovern) that split ticketing will be covered in the fares and ticketing review. As for East Coast, which is currently run from the Department for Transport, as it were, through an arm’s length body, action has been taken on that point.

My hon. Friend the Member for Cambridge (Dr Huppert) was right to talk about investment for the future, which I have already mentioned. The hon. Member for Hayes and Harlington referred to complexity; that will be dealt with in the fares and ticketing review. My hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) talked about the inheritance in Kent. I recognise that there are particular issues in Kent that should be looked at, and I am happy for that to be part of the work of the Department for Transport. We want to see an end to above-inflation fare rises as soon as possible, and I want to assure the House that we in the Department are taking steps to achieve just that.

Question put.

The House proceeded to a Division.

Mr Deputy Speaker (Mr Lindsay Hoyle): I ask the Serjeant at Arms to investigate the delay in the No Lobby.

The House having divided:

Ayes 231, Noes 294.

Division No. 56]

[3.59 pm

AYES

Abbott, Ms Diane

Ainsworth, rh Mr Bob

Ali, Rushanara

Allen, Mr Graham

Anderson, Mr David

Ashworth, Jonathan

Austin, Ian

Bailey, Mr Adrian

Bain, Mr William

Balls, rh Ed

Banks, Gordon

Barron, rh Mr Kevin

Bayley, Hugh

Beckett, rh Margaret

Begg, Dame Anne

Benn, rh Hilary

Benton, Mr Joe

Berger, Luciana

Betts, Mr Clive

Blackman-Woods, Roberta

Blears, rh Hazel

Blenkinsop, Tom

Blomfield, Paul

Blunkett, rh Mr David

Bradshaw, rh Mr Ben

Brennan, Kevin

Brown, Lyn

Brown, rh Mr Nicholas

Brown, Mr Russell

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Burnham, rh Andy

Byrne, rh Mr Liam

Campbell, Mr Alan

Campbell, Mr Ronnie

Caton, Martin

Chapman, Jenny

Clark, Katy

Clarke, rh Mr Tom

Clwyd, rh Ann

Coaker, Vernon

Coffey, Ann

Cooper, Rosie

Cooper, rh Yvette

Corbyn, Jeremy

Crausby, Mr David

Creagh, Mary

Creasy, Stella

Cruddas, Jon

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Dakin, Nic

Danczuk, Simon

David, Wayne

Davidson, Mr Ian

De Piero, Gloria

Denham, rh Mr John

Dobbin, Jim

Doran, Mr Frank

Dowd, Jim

Doyle, Gemma

Dromey, Jack

Dugher, Michael

Durkan, Mark

Eagle, Ms Angela

Eagle, Maria

Elliott, Julie

Ellman, Mrs Louise

Esterson, Bill

Evans, Chris

Farrelly, Paul

Field, rh Mr Frank

Fitzpatrick, Jim

Flello, Robert

Flint, rh Caroline

Flynn, Paul

Fovargue, Yvonne

Francis, Dr Hywel

Gapes, Mike

Gardiner, Barry

Glass, Pat

Glindon, Mrs Mary

Godsiff, Mr Roger

Goggins, rh Paul

Goodman, Helen

Greatrex, Tom

Green, Kate

Greenwood, Lilian

Gwynne, Andrew

Hain, rh Mr Peter

Hamilton, Fabian

Hanson, rh Mr David

Harris, Mr Tom

Havard, Mr Dai

Healey, rh John

Hepburn, Mr Stephen

Heyes, David

Hilling, Julie

Hodge, rh Margaret

Hodgson, Mrs Sharon

Hoey, Kate

Hopkins, Kelvin

Hosie, Stewart

Howarth, rh Mr George

Hunt, Tristram

Irranca-Davies, Huw

Jackson, Glenda

Jamieson, Cathy

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Graham

Jones, Helen

Jones, Mr Kevan

Jones, Susan Elan

Jowell, rh Dame Tessa

Joyce, Eric

Kaufman, rh Sir Gerald

Keeley, Barbara

Kendall, Liz

Lavery, Ian

Lazarowicz, Mark

Leslie, Chris

Lloyd, Tony

Llwyd, rh Mr Elfyn

Long, Naomi

Love, Mr Andrew

Lucas, Caroline

Lucas, Ian

MacNeil, Mr Angus Brendan

Mactaggart, Fiona

Mahmood, Mr Khalid

Mahmood, Shabana

Malhotra, Seema

Mann, John

Marsden, Mr Gordon

McCann, Mr Michael

McCarthy, Kerry

McClymont, Gregg

McDonagh, Siobhain

McDonnell, Dr Alasdair

McDonnell, John

McFadden, rh Mr Pat

McGovern, Alison

McGovern, Jim

McKechin, Ann

McKenzie, Mr Iain

McKinnell, Catherine

Meacher, rh Mr Michael

Meale, Sir Alan

Mearns, Ian

Michael, rh Alun

Miliband, rh Edward

Miller, Andrew

Mitchell, Austin

Morrice, Graeme

(Livingston)

Morris, Grahame M.

(Easington)

Murphy, rh Mr Jim

Murphy, rh Paul

Murray, Ian

Nandy, Lisa

Nash, Pamela

O'Donnell, Fiona

Onwurah, Chi

Osborne, Sandra

Owen, Albert

Paisley, Ian

Pearce, Teresa

Perkins, Toby

Phillipson, Bridget

Pound, Stephen

Qureshi, Yasmin

Raynsford, rh Mr Nick

Reed, Mr Jamie

Reeves, Rachel

Reynolds, Emma

Reynolds, Jonathan

Riordan, Mrs Linda

Ritchie, Ms Margaret

Robertson, Angus

Robertson, John

Robinson, Mr Geoffrey

Rotheram, Steve

Roy, Mr Frank

Roy, Lindsay

Ruane, Chris

Ruddock, rh Dame Joan

Sarwar, Anas

Seabeck, Alison

Shannon, Jim

Sharma, Mr Virendra

Sheerman, Mr Barry

Sheridan, Jim

Shuker, Gavin

Simpson, David

Skinner, Mr Dennis

Slaughter, Mr Andy

Smith, rh Mr Andrew

Smith, Angela

Smith, Nick

Smith, Owen

Spellar, rh Mr John

Straw, rh Mr Jack

Stuart, Ms Gisela

Sutcliffe, Mr Gerry

Tami, Mark

Thomas, Mr Gareth

Thornberry, Emily

Timms, rh Stephen

Trickett, Jon

Turner, Karl

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, rh Keith

Vaz, Valerie

Walley, Joan

Watson, Mr Tom

Weir, Mr Mike

Whiteford, Dr Eilidh

Whitehead, Dr Alan

Williams, Hywel

Williamson, Chris

Winnick, Mr David

Winterton, rh Ms Rosie

Wishart, Pete

Woodward, rh Mr Shaun

Wright, David

Wright, Mr Iain

Tellers for the Ayes:

Mr David Hamilton and

Phil Wilson

NOES

Adams, Nigel

Afriyie, Adam

Aldous, Peter

Amess, Mr David

Andrew, Stuart

Arbuthnot, rh Mr James

Baker, Norman

Baker, Steve

Baldry, Sir Tony

Baldwin, Harriett

Barclay, Stephen

Barwell, Gavin

Beith, rh Sir Alan

Beresford, Sir Paul

Berry, Jake

Bingham, Andrew

Binley, Mr Brian

Birtwistle, Gordon

Blackman, Bob

Blackwood, Nicola

Blunt, Mr Crispin

Boles, Nick

Bone, Mr Peter

Bottomley, Sir Peter

Bradley, Karen

Brady, Mr Graham

Brake, rh Tom

Bray, Angie

Brazier, Mr Julian

Bridgen, Andrew

Brooke, Annette

Browne, Mr Jeremy

Bruce, Fiona

Bruce, rh Sir Malcolm

Buckland, Mr Robert

Burley, Mr Aidan

Burns, rh Mr Simon

Burrowes, Mr David

Burt, Lorely

Byles, Dan

Cable, rh Vince

Cairns, Alun

Campbell, rh Sir Menzies

Carmichael, rh Mr Alistair

Carmichael, Neil

Carswell, Mr Douglas

Cash, Mr William

Clark, rh Greg

Clarke, rh Mr Kenneth

Clifton-Brown, Geoffrey

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Crockart, Mike

Davey, rh Mr Edward

Davies, Glyn

Davies, Philip

Davis, rh Mr David

de Bois, Nick

Dinenage, Caroline

Djanogly, Mr Jonathan

Dorrell, rh Mr Stephen

Dorries, Nadine

Doyle-Price, Jackie

Drax, Richard

Duddridge, James

Duncan, rh Mr Alan

Duncan Smith, rh Mr Iain

Ellis, Michael

Ellison, Jane

Eustice, George

Evans, Graham

Evans, Jonathan

Evennett, Mr David

Fabricant, Michael

Fallon, Michael

Farron, Tim

Featherstone, Lynne

Field, Mark

Foster, rh Mr Don

Fox, rh Dr Liam

Francois, rh Mr Mark

Freeman, George

Freer, Mike

Fuller, Richard

Garnier, Mr Edward

Garnier, Mark

Gauke, Mr David

George, Andrew

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Gove, rh Michael

Grant, Mrs Helen

Gray, Mr James

Grayling, rh Chris

Green, Damian

Greening, rh Justine

Grieve, rh Mr Dominic

Griffiths, Andrew

Gummer, Ben

Hague, rh Mr William

Halfon, Robert

Hames, Duncan

Hammond, Stephen

Harper, Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Haselhurst, rh Sir Alan

Hayes, Mr John

Heald, Oliver

Heaton-Harris, Chris

Hemming, John

Hendry, Charles

Herbert, rh Nick

Hinds, Damian

Hoban, Mr Mark

Hollingbery, George

Hollobone, Mr Philip

Holloway, Mr Adam

Hopkins, Kris

Horwood, Martin

Howarth, Mr Gerald

Howell, John

Hughes, rh Simon

Huhne, rh Chris

Hunt, rh Mr Jeremy

Huppert, Dr Julian

Hurd, Mr Nick

James, Margot

Jenkin, Mr Bernard

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kelly, Chris

Kirby, Simon

Knight, rh Mr Greg

Kwarteng, Kwasi

Laing, Mrs Eleanor

Lamb, Norman

Lancaster, Mark

Lansley, rh Mr Andrew

Latham, Pauline

Laws, rh Mr David

Leadsom, Andrea

Lee, Dr Phillip

Leech, Mr John

Lefroy, Jeremy

Leigh, Mr Edward

Leslie, Charlotte

Letwin, rh Mr Oliver

Lewis, Brandon

Lewis, Dr Julian

Lidington, rh Mr David

Lloyd, Stephen

Lopresti, Jack

Lord, Jonathan

Loughton, Tim

Luff, Peter

Macleod, Mary

Main, Mrs Anne

Maude, rh Mr Francis

May, rh Mrs Theresa

Maynard, Paul

McCartney, Jason

McCartney, Karl

McIntosh, Miss Anne

McLoughlin, rh Mr Patrick

McPartland, Stephen

Menzies, Mark

Mercer, Patrick

Metcalfe, Stephen

Miller, Maria

Mills, Nigel

Milton, Anne

Mitchell, rh Mr Andrew

Moore, rh Michael

Mordaunt, Penny

Morgan, Nicky

Morris, Anne Marie

Morris, David

Morris, James

Mosley, Stephen

Mowat, David

Mulholland, Greg

Munt, Tessa

Murray, Sheryll

Neill, Robert

Newmark, Mr Brooks

Newton, Sarah

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

O'Brien, Mr Stephen

Offord, Dr Matthew

Ollerenshaw, Eric

Opperman, Guy

Ottaway, Richard

Parish, Neil

Patel, Priti

Paterson, rh Mr Owen

Pawsey, Mark

Penrose, John

Phillips, Stephen

Pickles, rh Mr Eric

Pincher, Christopher

Poulter, Dr Daniel

Prisk, Mr Mark

Pugh, John

Raab, Mr Dominic

Randall, rh Mr John

Redwood, rh Mr John

Rees-Mogg, Jacob

Reevell, Simon

Reid, Mr Alan

Rifkind, rh Sir Malcolm

Robathan, rh Mr Andrew

Robertson, Mr Laurence

Rogerson, Dan

Rosindell, Andrew

Rudd, Amber

Ruffley, Mr David

Russell, Sir Bob

Rutley, David

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Shepherd, Mr Richard

Simpson, Mr Keith

Skidmore, Chris

Smith, Miss Chloe

Smith, Henry

Smith, Julian

Smith, Sir Robert

Soames, rh Nicholas

Soubry, Anna

Spencer, Mr Mark

Stephenson, Andrew

Stevenson, John

Stewart, Bob

Stewart, Iain

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stuart, Mr Graham

Stunell, Andrew

Sturdy, Julian

Swales, Ian

Swayne, rh Mr Desmond

Swinson, Jo

Syms, Mr Robert

Thurso, John

Timpson, Mr Edward

Tomlinson, Justin

Tredinnick, David

Truss, Elizabeth

Turner, Mr Andrew

Uppal, Paul

Vaizey, Mr Edward

Vara, Mr Shailesh

Vickers, Martin

Villiers, rh Mrs Theresa

Walker, Mr Charles

Walter, Mr Robert

Ward, Mr David

Watkinson, Angela

Weatherley, Mike

Webb, Steve

Wharton, James

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, Mr John

Wiggin, Bill

Willetts, rh Mr David

Williams, Roger

Williams, Stephen

Williamson, Gavin

Willott, Jenny

Wilson, Mr Rob

Wollaston, Dr Sarah

Wright, Jeremy

Wright, Simon

Yeo, Mr Tim

Young, rh Sir George

Zahawi, Nadhim

Tellers for the Noes:

Greg Hands and

Mark Hunter

Question accordingly negatived.

5 Sep 2012 : Column 296

5 Sep 2012 : Column 297

5 Sep 2012 : Column 298

5 Sep 2012 : Column 299

5 Sep 2012 : Column 300

Housing

Mr Deputy Speaker (Mr Lindsay Hoyle): I advise the House that Mr Speaker has selected the amendment in the name of the Prime Minister.

4.15 pm

Jack Dromey (Birmingham, Erdington) (Lab): I beg to move,

That this House notes that England faces a housing crisis; further notes with concern that housing starts, including for affordable housing, are down, and that homelessness and rough sleeping have increased under this Government; further notes that the collapse in house building and contraction in construction are a major cause of the double-dip recession; believes that the Government needs to take urgent action to get the economy and house building going again; and calls on the Government to introduce a tax on bankers’ bonuses to fund the building of 25,000 additional affordable homes, to bring forward infrastructure investment, including for housing, and to cut VAT on home improvements, repairs and maintenance to five per cent for one year to help homeowners and create jobs.

Let me start by welcoming the new Housing Minister, the hon. Member for Hertford and Stortford (Mr Prisk), to his post. It is a really important job, and I am sure he will bring to it much-needed skill and insight, and I sincerely hope he will also bring a new sense of understanding and urgency. My experience from dealing with the hon. Gentleman is that he is a modest man, unlike his predecessor, who gave hubris a bad name.

As the hon. Gentleman is new to his post, it might be helpful if I set out why we are having this debate. Today, the country is gripped by the biggest housing crisis in a generation and the longest double-dip recession since the second world war. Since the spending review, our economy has shrunk by 0.6%. As a result of this Government’s twin failure on economic and housing policy, the reality is that Britain is one of just two G20 countries in a double-dip. The reality is also that this is a recession and a housing crisis made in Downing street—and is it any wonder, as the Chancellor has multiple jobs and yesterday’s Housing Minister multiple identities, and both authored worthless plans on how to bounce back from recession?

The facts are stark: house building is down, homelessness is up, private rents have hit record highs, and we have a mortgage market in which people struggle to get mortgages. The latest Government figures tell us that fewer than 100,000 homes were started in the 12 months to June, which is a 10% decrease on the previous 12 months and amounts to fewer than half the 230,000 new households being formed every year.

Mark Pawsey (Rugby) (Con): Will the hon. Gentleman care to tell us how many new houses were started in 2009?