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Lord Harding of Petherton: My Lords, I should be grateful if the noble Lord would let me intervene. I have telephoned the national number on several occasions. I got straight through and received very courteous answers. I received accurate and up-to-date information on how late the train was.
There is the issue of missed connections, to which reference has been made. The idea of holding up a train to meet a connection has long gone out of the window. There are different ticketing policies on a number of routes. There are different policies as to whether you should buy a ticket before you get on the train. That struck me when I travelled on two consecutive days. In one case I travelled on the Gatwick Express where I was encouraged to buy my ticket on the train. On another occasion I travelled to Newbury, which is about the same distance as to Gatwick, and had I not bought my ticket before I boarded the train I should have suffered a serious penalty. There seems to be no logic as to why those two positions should apply.
Dare I say that privatisation has not even been a financial success. We are now well into it--in the third or fourth year--but the doubling of the state subsidy in 1997 to £2 billion per annum is double the subsidy that was being paid prior to privatisation.
In addition, with some exceptions, we have not seen a dramatic improvement in the replacement of old rolling stock. Investment in rolling stock and the infrastructure of the railways has, over the past few years, suffered what Mr. Patten used to refer to as a "double whammy". Prior to privatisation there was a significant starvation of investment by the government. Indeed, in 1993-94, which was the year pre-privatisation, investment in the railway system was down to only £817 million. I should say as an aside that that had a significant impact on BREL, the then recently privatised rolling stock manufacturing company, which had more than 100 years experience in the manufacture of rolling stock in its three plants in Crewe, Derby and York. Indeed, as a result of that starvation of orders, significant and permanent damage was done to the capability and capacity of BREL which was, by then, owned by the Swedish company ABB.
The other part of the "double whammy" is that since privatisation, with some notable exceptions, there has still been under-investment in rolling stock. We know why that is and various noble Lords have indicated that it is because of the inter-relationship between the length of the franchise and the need to invest significant sums in rolling stock which has tempted many operating companies to opt for short-term profits at the expense of longer-term investment. Moreover, there is the scandalous case of under-investment by Railtrack, which has already been criticised by the regulator.
Noble Lords may well ask what we should do about that. Although in the run-up to the last election both the Liberal Democrats and the Labour Party were, I suspect, briefly tempted to suggest renationalisation, that particularly horse has now bolted and there is no practical possibility of choosing that option.
However, we certainly want the Government to honour their manifesto commitment to establish a national rail authority. That was in the manifesto. We are now nearly a year after the election and that national rail authority needs to be established very quickly.
We need to remove the confusion between the franchising director and the rail regulator. There is clearly confusion between the powers and the duties of the two. We need to end the regulatory confusion caused by the current failure to regulate the rolling stock leasing companies.
More particularly, and more vitally, we need immediate action to ensure investment in the infrastructure of the railway system and rolling stock. I believe it is the case that as regards stations, which throughout the country require significant investment, both the train operating companies and Railtrack are prepared to invest in station improvements, but there must be a mechanism to ensure that the facility is paid for by subsequent franchisees. Otherwise, they will not make that investment.
Similarly with regard to rolling stock, we must empower Opraf to underwrite residual use of rolling stock and recompense franchisees for that residual value so that when new franchisees come in there is a mechanism in place to ensure that the existing franchisees which have invested can have the residual value and be recompensed. It may well be, as has
It is quite clear that railways are at the heart of the integrated transport strategy that we all require. That requires urgent implementation if we are to meet the environmental challenges of the 21st century. I hope that the Government will rise to that challenge.
Lord Brabazon of Tara: My Lords, I join noble Lords in thanking the noble Baroness, Lady Thomas, with whom I share a birthday, for introducing the debate this evening. There has been a good deal in the debate about the merits and demerits of privatisation. But as the noble Lord, Lord Razzall, said, I do not believe that either the Government or the Liberal Democrats believe that renationalisation is any longer a serious proposition. Therefore, it is up to all of us to help the privatised railways to work, even if the Government, in their heart of hearts, do not really approve of them.
After all, the railways are one of Britain's great national assets. I shall certainly not say that everything is perfect but I shall attempt to demonstrate--and I believe that it has been demonstrated in today's debate--that there are good prospects for the railways.
John Welsby is, I believe, also the Deputy Prime Minister's special adviser on the railways. Let us look at the facts. Under the franchising agreements the train operating companies are to spend some £1.8 billion on new trains and rolling stock refurbishment. There are orders for some 2,175 new coaches in process, and more are planned. Hardly a week goes by without some new announcement, such as that on the much criticised west coast main line. I was glad to hear that the right reverend Prelate had some words of praise for that line, although the noble Lord, Lord Hunt of Kings Heath, did not have very many. I say only that I believe the west coast main line is technically much more difficult than the east coast line. If one were starting from scratch, I think one would build it straighter. New tilting trains are being ordered, which together with improvements to the line by Railtrack, will dramatically cut journey times from
I am told that the current timetable contains a total of 29,000 more trains than the winter 1996/97 one. For example, the Midland Main Line will double the frequency between London, Leicester and Nottingham. Great Western Trains is committed to a half-hourly service to Bristol and Cardiff, and Anglia to a similar frequency on the Norwich line.
Much has been made of the level of subsidy the train operating companies receive, but that is falling rapidly: from £2.1 billion last year to £1.9 billion this year, to £926 million in 2002-2003, when six of the 25 operators will actually pay money to the franchising director rather than draw subsidy. So, taken with the privatisation proceeds of some £4.7 billion, it really cannot be argued that the taxpayer has received bad value for money. One can contrast this with an article that I read in the Economist this week about what is happening in some other European countries. The French Government have just had to write off 20.5 billion dollars' worth of railway debts. The Italian railway is currently losing 4 trillion lira a year, which apparently equates to 2.2 billion dollars. In the years from 1990 to 1994 Europe's railways swallowed 31 billion dollars of subsidy a year. Therefore I do not think the situation in this country can be described as bad.
I said earlier that all was not perfect. The noble Baroness, Lady Thomas of Walliswood, referred in particular to the situation in the south east of England. But even where justifiable criticisms have been made action is in hand to alleviate the situation. For example, South West Trains has increased passenger journeys by nearly 15 per cent., increased passenger miles by 16.5 per cent. and increased the number of peak time seats available by more than 7,000 extra a day. It has also ordered some £90 million worth of new trains.
Reference has been made in the debate to through ticketing and bus links. The noble Lord, Lord Alderdice, mentioned the situation in Northern Ireland. Here, too, I believe, welcome progress is being made. In Oxford some bus routes have been diverted to serve the station, and through fares introduced by Thames Trains. A ticket, sold on the bus, covers the trip to the station, the rail journey to London and the Underground when you get there. As far as I am aware such innovation was not happening pre-privatisation, and again I believe will help the Government with their ambitions for an integrated transport system. Let us hope that these examples are replicated across the country. Park-and-ride is also being promoted, with major schemes being planned for an East Midlands Parkway station to link buses, coaches, cars, the Midland Main Line and the East Midlands Airport. In addition, there
For some companies success and growth in traffic is proving a problem, as a number of noble Lords have mentioned. I refer in particular to GNER where passenger numbers have increased three times faster than predicted. By all accounts the company is offering a much improved service. The noble Earl, Lord Leicester, in his excellent maiden speech gave a flavour of that. The company holds the franchise for the shortest period, seven years, of all the former inter-city routes. Because of this faster than expected growth, which the Government must surely welcome, passengers face severe overcrowding in the near future, if not already, on some services, with capacity being reached sooner rather than later. The company wishes to invest in new trains, but such investment is not practicable unless the franchise can be extended, as new trains ordered now would not be delivered until late 2000, with less than three years of the franchise to run. I know that GNER has discussed this with the Secretary of State and hopes for an early decision from him. If he gives the go-ahead, the company will be in a position to order a substantial number of trains to give an increase in capacity. That is not to say that GNER has not already invested £12 million more than was committed in its franchise agreement. I hope that the noble Baroness will be able to give us some indication about that matter, although of course I do not expect her to make an announcement on the subject in this evening's debate.
It has been suggested to me, and I think there is something in this--I think the noble Lord, Lord Berkeley, touched on this--that one of the problems of the franchising regime is that it was based, perhaps for historical reasons, on the possibility of failure, either financial or otherwise, of the franchisee and what would happen in the event of such a failure. Not enough, if any, attention was paid to the possibility of success, or rather being too successful. I turn briefly to freight. Many noble Lords have referred to the carriage of freight and the investment proposals of EWS which has ordered 280 new locomotives and some 3,000 new wagons. As an aside to this, as has been mentioned, it has had to reopen the factory at York which is, of course, good news for employment in that area.
The previous government allowed the use of 44 tonne trucks for journeys to and from the railhead. Can the Minister say how this has worked? Has it been a success and how many operators have taken advantage of this arrangement? I believe that EWS is pressing at an open door as regards wishing to see an increase in the carriage of freight. As the current president of the British International Freight Association I know that our members are keen to give rail a try, particularly if a freight service can be operated to Heathrow, which I believe is being discussed. However, there are problems, including problems of access. I have heard that even on the new west coast line EWS may only get half the train paths it forecast it would need. No doubt the Minister will tell us something of the role of the proposed strategic rail authority. I wonder whether she can say if this is the sort of issue that will concern the
I am rapidly running out of time. I conclude by saying that I believe the industry is keen to play its part in meeting the Government's objective of reducing road traffic and is actively working to encourage new business. What it needs now is the support of the Government in meeting these aims and not the continued sniping that is so often evident in the media, but which, I am glad to say, has been largely absent from today's debate.
Baroness Hayman: My Lords, I should like to add my congratulations to the noble Baroness, Lady Thomas, on initiating the debate and on her contribution to it. I have to say that participating in it reminds me of the perils of being a Minister in your Lordships' House. I always say to colleagues in another place that one never comes to this House without there being someone who knows more about the subject than one does oneself when replying to a Question or a debate. That was very well illustrated today, not only by those noble Lords who contributed from strong personal experience--technical, engineering or other--but also those who have had experience of actually driving the trains. I had not realised that was going to happen. I must add that I feel slightly exposed, replying to this particular debate as Minister for Roads. The road lobby has been, if I may put it this way, very much not in the ascendency. The benefits of improved rail services have been the key theme.
I also wish to add my congratulations to the noble Earl, Lord Leicester, on his very impressive maiden speech. He said at the start that he was nervous. It was not apparent in either the content or his delivery. I am afraid he will find that he is encouraged to participate a great deal in this House in the future.
As the noble Lord, Lord Razzall, pointed out, we have heard from many Members of their experiences of the privatised railway network. I think anyone would agree that those experiences are, to say the least, mixed. Listening to the right reverend Prelate, I nearly said that the performance that we heard about was a "curate's egg". We saw from the exchanges between the noble Lords, Lord Harding and Lord Razzall, that there are different views and different experiences post-privatisation.
But one thing has been clearly demonstrated. Privatisation has not of itself produced the cure-all that was promised, and a great deal now needs to be done. The railway now has a mish-mash of regulatory responsibilities, and there is no one body responsible for balancing the needs of both passengers and freight and the overall development of the network. Most importantly, passengers are not getting the service that they have a legitimate right to expect, nor the service that will make the railways a more attractive alternative to the private car, to make it the normal means of transport to which the right reverend Prelate alluded. These are fundamental problems that we have to address
That is why the Government are committed to creating a new rail authority which will act firmly in the public interest. As part of the wider development of an integrated transport policy--as the noble Lord, Lord Alderdice, rightly reminded us it should be--we have been conducting a fundamental review of railway regulation in order to identify areas where action needs to be taken. Our review has revealed a number of shortcomings in the present arrangements, some of which were also identified during the course of our debate. The Government have inherited a system which has no focus for long-term strategic planning or investment; no clear split of responsibilities between the rail regulator and the franchising director, and no one body accountable to passengers when things go wrong. It is a system where key players such as Railtrack are only lightly regulated, and where some organisations--the rolling stock leasing companies, for example--are not regulated at all. It is a system which apparently tolerates months of delays for passengers, while leaving the franchising director with insufficient powers to penalise the offending train operator.
These are serious problems. We acknowledge that the reforms needed to remedy these failings are not ones that can be made overnight. We will need to establish a new rail authority to implement the proposals that in the spring we plan to set out in our White Paper on integrated transport.
But we have already taken action within the constraints imposed by the current complex regulatory structures. On 6th November my right honourable friend the Minister for Transport announced three new measures to boost investment, protect passengers' rights and make sure private operators provide high-quality services.
We have issued the franchising director with new objectives which deal with the real issues that matter most to passengers--investment in decent rolling stock and stations, high standards of punctuality and reliability and the protection of passengers' rights.
We also approved a set of planning criteria which will provide an effective framework for developing and implementing worthwhile rail investment--investment of the type called for in tonight's debate--which will improve the range and quality of the services available to rail users.
The third element in our interim package is a voluntary concordat between Ministers and the rail regulator. Firm, fair and accountable regulation is essential for passengers and for the industry on which they depend. We inherited a regulatory structure which did not give the regulator any formal indication of what the Government wanted for the railways. The concordat bridges that gap.
As one would predict, tonight's debate has given us insights into concerns about poor performance by train operators. The noble Baroness, Lady Thomas, raised the issue at the beginning of the debate. We are not willing to accept poor performance by train operators. Passengers have the right to expect high levels of punctuality and reliability. We expect those who perform badly to take immediate steps to improve their services to satisfactory levels. But also, the good performers should not think that they can simply sit back and rest on their laurels. That performance needs to be sustained throughout the year--the point was made about the differences that can occur at different periods.
Taking the strictures of the right reverend Prelate to heart, I should acknowledge that, despite those mixed levels of performance, some private train companies have made improvements in their areas. They have been mentioned during the debate. It is right to give credit where credit is due. The Government welcome, for example, the initiatives introduced by a number of train operating companies in respect of joint ticketing for bus and rail services. That is precisely the sort of innovation that we are keen to encourage and which will contribute to obtaining a truly integrated transport system-- a theme that recurred throughout the debate. But the picture across the country is decidedly patchy. We cannot expect individual operators to act in isolation without the clear, effective and coherent regulatory framework which the new rail authority will provide.
The noble Lord, Lord Brabazon of Tara, asked about the functions of that new authority. No firm decisions have yet been made. We said in our manifesto that the authority would combine the functions of the Office of Passenger Rail Franchising and some functions of the department. We do not necessarily regard those functions as the limitation of the new rail authority's remit. The likely areas of responsibility for the new authority will include: managing and enforcing existing franchise contracts; developing a strategic vision for investment in the network; promoting integration between rail and other modes of transport; promoting voluntary action by train operators to win passengers; protecting the needs of disabled passengers; and balancing the needs of passengers and freight users.
My noble friend Lord Berkeley suggested that the new rail authority might have a role to play in making money available for investment in the network. We have as yet reached no final conclusions in this area, but if, as we propose, the new authority assumes OPRAF's current responsibilities and some of the department's, then OPRAF's budget would transfer to the new authority, as would the relevant parts of the DETR's budget. We shall be considering what other funding might be available, subject of course to the normal public expenditure constraints.
The issue of freight recurred throughout the debate. It was mentioned by many noble Lords, including the noble Earl, Lord Leicester, my noble friend Lord Berkeley, and the noble Lord, Lord Cadman. On taking office we found no national strategy for giving rail freight a sufficient priority on the network. We have made it clear that we want more freight to go by rail.
Under the previous administration, the freight grants budget was badly underspent. This financial year, the £30 million budget will be substantially taken up. My right honourable friend the Minister for Transport will very shortly be announcing the award of seven new freight grants worth a total of almost £5 million. These grants will spare residents of many areas of England over half a million lorry journeys through their localities. That is precisely the kind of issue that many noble Lords raised today. To reinforce the success of the freight grant scheme, next year's budget has been increased to £40 million, of which £20 million is already committed.
As well as revitalising the freight grants scheme, we have also secured commitments from the French Government and Eurotunnel designed to get a better deal for railfreight through the Channel Tunnel and beyond, not only by EWS but also by new entrants to the market.
In the last nine months, three new railfreight terminals have been developed to serve the international railfreight market: Tilbury, Hams Hall and Daventry. As regards the 44 tonne lorries going to the freight terminals, perhaps I may write to the noble Lord, Lord Brabazon of Tara, with the exact figure.
The Highways Agency, through its "Toolkit" initiative, is seeking to identify pilot projects which encourage both travellers and freight to switch from road to rail. That is the kind of joined up thinking, if I may put it that way, that different bits of the transport infrastructure can bring to an integrated system.
In the context of the development of an integrated transport policy, we are considering what other measures might be introduced to encourage rail freight. We are examining whether planning guidance might be strengthened to protect land for future rail use, and we are considering whether further improvements can be made to the grants regime.
As was predictable, several noble Lords commented today on the need for upgrading of the West Coast Main Line. I am also aware of the concerns expressed by my noble friend Lord Berkeley that the proposed upgrade will not cater sufficiently for freight traffic. The Government have repeatedly made it clear that we want to see Railtrack and Virgin trains move this project forward as quickly as possible. We are keeping a very close eye on it; and I note the remarks from the noble
It is my understanding that one of the prime objectives of the proposed upgrade is to provide much needed additional capacity in order to meet the needs and aspirations of train operators. This is one of the issues the rail regulator will wish to consider in examining the proposed arrangements between Railtrack and Virgin which are with him for approval.
I note the comments made by my noble friend Lord Hunt about concern in the Birmingham area over the possible adverse effects that additional fast services on west coast main line may have on local Birmingham rail services. I am aware from reports in the press that his concern is shared by Birmingham business, council and train operators running local services. I can well understand the anxiety to safeguard local services. In the first instance, the allocation of capacity on a line is a matter that Railtrack should discuss with train operators and any differences should be referred to the rail regulator as part of his consideration of the proposed access arrangements between Railtrack and the Virgin Rail Group. In reaching his decision, the regulator will take account of the interests of all those affected by the proposals.
My noble friend Lord Berkeley and the noble Earl, Lord Mar and Kellie, drew attention to the technical problems involved in the upgrading of the signalling systems on the west coast main line. I am conscious that the line has not been improved since the 1970s and the train operators who use it and their customers want to have more services, reduced journey times and better reliability--the issue of journey times compared with the comparable eastern line were mentioned today. We shall look to Railtrack and its contractors to address the technical issues which are associated with the upgrade--and I accept that they are very real issues--that have been raised today.
Several contributors to the debate, such as the noble Baroness, Lady Thomas, the right reverend Prelate the Bishop of Blackburn, the noble Lord, Lord Cadman, and others referred to sales of railway land and we are aware of the concerns expressed on the subject. But we do not think it would be useful to stop all sales of former railway land. The British Railways Board no longer owns any operational railway land. Our policy is for British Rail to continue selling surplus land at market value. The sales are part of the expenditure programme of the previous administration to which the present Government have committed themselves. Railway businesses are routinely kept informed and it is open to them to bid for BR sites which are being sold.
As for operational land, when Railtrack was formed it took all those closed lines and closed freight sites which it thought would have potential for future rail use. Railtrack may dispose of certain areas of land that it no longer requires, in the same way as many other private companies do. If land has not been used for over five years and is not required for the future enhancement of the network, its disposal is a commercial judgment for Railtrack to consider. If land has been operational in
The noble Lords, Lord Razzall and Lord Cadman, with others, spoke of the need for long-term sustained investment in the rail industry. As your Lordships know, substantial sums of public money are going into the industry. The need is to ensure that the best value is obtained for that investment. An important responsibility of the new rail authority will be to give strategic direction to the industry. The noble Lords, Lord Brabazon of Tara, Lord Harding, and others raised the specific issue of requests for franchise extensions such as that received from GNER. These will be considered on their merits but I have to say to the House, as I have said before, that there will need to be very convincing arguments of public interest and value for money to justify renegotiation of contracts which were freely entered into following the competitive process.
I noted the territorial comments, if I may put it that way, made by the noble Earl, Lord Mar and Kellie, about services in Northern Ireland and the Republic of Ireland. I welcomed his remarks about the improving cross-border service and about integration of public transport. I know that my right honourable friend the Secretary of State for Northern Ireland is committed to producing a transport policy statement later this year, to be read alongside our own White Paper on integrated transport policy. I thought his remarks about services within and to Scotland vividly illustrated the point about the patchy performance of train operating companies. Like other noble Lords, he also mentioned the freight operator EWS. I know that a key part of EWS's strategy for increasing rail freight is to get more long-distance freight onto rail, including traffic between the south of England and Scotland. Perhaps they may consider the possibility of carrying cars as freight, as Motorail did in the past. I am busking on that point, I am not sure about it.
While we are on issues Scottish, the noble Lord, Lord Palmer, commented on the need for a station at Edinburgh airport. He made wider points about proposals for devolution. We have made it clear that the new rail authority will be a body with overall responsibility for long-term strategic development of the rail network across Great Britain. That is why the new authority will be ultimately responsible to this Parliament. But we want to ensure that the devolved institutions in Scotland and Wales play their part in this.
My noble friend Lord Hunt of Kings Heath referred to the availability of cheap walk-on fares. We have inherited a system where operators have discretion to price some tickets according to market demand, but without any other controls by the franchising director.
I am conscious of the time, but the noble Lord, Lord Methuen, asked a specific question relating to the Channel Tunnel rail link. As I said in response to a Question last week, London and Continental Railways said that it will require a further £2 billion of taxpayers money over the next two years to complete its contract. The Deputy Prime Minister said that that is not acceptable and under the contract LCR has 30 days to come forward with revised proposals. That 30-day period ends on Friday of this week. We will inform Parliament as soon as possible of the outcome of the discussions over the past month. But, given the sensitivity of those discussions, I hope that the House will understand that there is not a great deal that I can add this evening.
The noble Viscount, Lord Thurso, took us down the interesting avenue of the comparisons between rail and road cost--not a road down which I can follow him this evening. However, it was a well drawn point to make; we must look at the attractiveness of rail both in terms of the quality of the service and the cost.
This debate has served very well to draw attention to the state of the railways. When we came to power we found the system broken into literally one hundred pieces, with no strategic vision for the development of the network. We found a regulatory structure which even the industry regulators acknowledge can be confusing. We found a privatised railway that had made fortunes for the few, but in many cases had left passengers short-changed. And we found a railway crying out for some leadership and direction.
We are determined to address those issues--to do some of the untangling mentioned tonight--and deliver the coherent, clear and effective regulation which is needed to put the railways at the heart of our integrated transport strategy. We have demonstrated our intentions by taking action within the existing regulatory constraints and by conducting a fundamental review of rail regulation. We have taken action to encourage more freight on to the railway. And we have made clear our commitment to a new rail authority which will provide a much-needed strategic overview. We believe that we can--and must--get more out of our railway, and that we must do that not only in the context of an integrated transport policy, but also in the context of our commitment on climate change post-Kyoto.
Baroness Thomas of Walliswood: My Lords, at this time of the evening I shall resist the temptation to re-enter the argument, for which I am sure everyone will be grateful. However, before bringing the debate to a close it is appropriate for me to say "thank you", particularly to the Minister for as usual coping with a vast mass of different queries and bits of data with her usual charm and efficiency.
Finally, I congratulate the noble Earl, Lord Leicester, on his wonderful reminiscence about all that was peculiar and not entirely efficient in British Rail. I thank also my team of supporters on these Benches and all noble Lords who, as I expected, made excellent and illuminating personal contributions to the debate. We are to receive papers soon--one day, in the Spring. They are eagerly awaited and until then, I beg leave to withdraw the Motion.