Coastguard Modernisation
Lord Hammond of Runnymede Excerpts(12 years, 10 months ago)
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The Secretary of State for Transport (Mr Philip Hammond)
I will be making an oral statement later today, following the Leader of the House’s business question.
Search and Rescue Interim Contract
Lord Hammond of Runnymede Excerpts(12 years, 10 months ago)
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The Secretary of State for Transport (Mr Philip Hammond)
On 8 February I informed the House that, owing to irregularities in the bidding process, the Government had concluded that it was not appropriate to proceed with the previously planned joint MOD/DFT PFI procurement for future search and rescue capability.
The investigation into the circumstances that led to the cancellation of that procurement is ongoing. Work is also under way to identify the optimum procurement options for the long-term provision of search and rescue helicopter capability for the UK. However, as the existing Maritime and Coastguard Agency search and rescue helicopter contract that provides services at Portland, Lee on Solent, Shetland and the Isle of Lewis is set to expire, I wish to inform the House of my plans to ensure that search and rescue helicopter services from these locations continue uninterrupted until new long-term arrangements are in place.
To ensure the continuity of services from these locations, the Department for Transport will shortly run a competition to procure an interim service for a period of up to five years. This contract will be similar to the arrangements that are currently in place for these bases and are working well. The contract will be open to all interested bidders able to offer a service that fully meets our requirements and ensures the safety of the public and seafarers.
These arrangements will ensure that search and rescue helicopter services are maintained while the range of options in relation to the long-term future provision of such services are being fully considered. The Royal Air Force and Royal Navy will continue to provide coverage from their search and rescue bases as at present, while I consider the options for the long-term provision of search and rescue helicopter capability.
I will inform the House later in the year of the Government’s intentions for the longer term. The procurement strategy we adopt for the longer term will seek to ensure that the Ministry of Defence is able to complete its previously announced intention to withdraw its Sea Kings from service in 2016.
Airport Co-ordination (London Olympics)
Lord Hammond of Runnymede Excerpts(12 years, 10 months ago)
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The Secretary of State for Transport (Mr Philip Hammond)
As part of the Government’s strategy to ensure successful delivery of efficient transport services for the 2012 London Olympic games, I am today announcing the introduction of new measures to limit disruption and delay to all flights using airports in the south-east of England during the expected period of peak demand for air services for the games.
The Airports Slot Allocation (Amendment) Regulations 2011, laid before Parliament today, will come into force on 1 August 2011. They will temporarily amend the existing regulations so as to provide new powers to ensure that during the games period the available air space capacity over the south-east of England will be able to accommodate the maximum possible number of extra flights, while minimising the risk of disruption or delay to existing services. These regulations will cease to have effect on 31 December 2012.
In conjunction with the new regulations, and following two rounds of consultation, on 1 August 2011 the Secretary of State for Transport will designate the airports listed below as temporarily co-ordinated until 15 August 2012, but only in respect of slot allocation during the period of 21 July 2012 to 15 August 2012 inclusive. This period corresponds to the anticipated peak demand for air services for the games.
In the south-east of England, Heathrow, Gatwick, Stansted and London City are already co-ordinated airports. Airports that will additionally be co-ordinated for the Olympics period are: Birmingham airport, Blackbushe airport, Bournemouth airport, Cambridge airport, Chalgrove airport, Coventry airport, Cranfield airport, Damyns Hall aerodrome, Denham aerodrome, Dunsfold aerodrome, Duxford airport, Elstree airport, Fairoaks airport, Farnborough airport, Goodwood aerodrome, Lee-on-Solent airport, Leicester airport, London Biggin Hill airport, London Luton airport, London Oxford airport, London Southend airport, Lydd (London Ashford airport), Manston airport, North Weald airfield, Old Sarum airfield, Peterborough Conington airfield, RAF Northolt, Redhill aerodrome, Rochester airport, Shoreham airport, Southampton airport, Stapleford airport, Sywell aerodrome, Thruxton airport, White Waltham airfield, Wycombe air park.
During this period all flights operating in controlled airspace and intending to use a co-ordinated airport will need to obtain, and operate in accordance with, pre-booked take-off or landing slots. Slots will be allocated by Airport Coordination Ltd, the existing UK slot co-ordinator, in accordance with the relevant EU regulation.
EU Transport Council
Lord Hammond of Runnymede Excerpts(12 years, 10 months ago)
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The Secretary of State for Transport (Mr Philip Hammond)
I attended the second Transport Council of the Hungarian presidency in Luxembourg on 16 June.
The Council reached a general approach on a directive which recasts the 2001 first rail package. The 2001 legislation set the initial framework for a single European rail market, setting out principles for charging and access to the network. The present draft directive modifies the three 2001 directives. The presidency tabled a compromise text which was slightly amended at the Council. The presidency then concluded that there was a qualified majority for a general approach. The text of the general approach is acceptable to the UK.
The Council also reached a general approach on the draft regulation amending Regulation 1406/2002, which established the European Maritime Safety Agency. This amending regulation modifies and extends the tasks of the agency to bring them in line with recent international and EU developments in the maritime safety field. I set out the UK’s opposition to any staff or administrative cost increases for the agency, and was able to accept revised wording on agency resources, which addressed our concerns.
The Council debated the European Commission’s recent White Paper, “Roadmap to a Single European Transport Area—Towards a competitive and resource efficient transport system”, which was issued in March. The Council debate centred on a number of questions put by the presidency.
The White Paper aims to increase the sustainability and competitiveness of the sector while moving towards a fully integrated transport network. In doing so, the Commission aims to cut carbon emissions from transport by 60% by 2050 (compared to 1990 levels). Member states broadly agreed that the transport sector has to make an adequate contribution to the achievement of the medium and long-term climate change targets. I explained that, while supporting the broad thrust of the 10 goals in the White Paper, the UK has some concerns on the detail.
We are not in favour of having targets for their own sake, and do not think that it is practical or desirable to have a multiplicity of goals and targets. Furthermore, we do not support sector specific targets, which would constrain our progress on carbon reduction within the economy as a whole. Wherever targets are set, we believe that they must be realistic and supported by robust evidence and cost impact analysis. I also joined others in proposing that we work internationally to negotiate similar commitments with all of the global partners, in the framework of international organisations.
I stressed that the EU should focus on actions that need to be undertaken at EU level, and where there was no such case, it should be left to member states and local authorities to act. I also welcomed, with support from some other Ministers, the Commission’s commitment to undertake thorough impact assessments for any actions. I urged the Commission to consider the importance of reducing the overall burden of regulation, to help our businesses and the budgetary constraints that we all face, as it takes forward the White Paper proposals.
Council conclusions were adopted on EU inland waterway transport, inviting the Commission to launch a project to continue support for an existing inland waterway programme, which is designed to encourage modal shift of freight from road to inland waterways, and to bring forward proposals for a follow-on programme. The conclusions are acceptable to the UK.
The Council adopted a decision on the signing and conclusion of an agreement with the Intergovernmental Organisation for International Carriage by Rail on the EU accession to the convention concerning International Carriage by Rail (COTIF) of 9 May 1980, as amended by the Vilnius protocol of 3 June 1999. The decision is acceptable to the UK.
The Council adopted two decisions in the area of aviation external relations, both of which were acceptable to the UK.
The first decision authorised the Commission to open negotiations with Moldova on a comprehensive air transport agreement.
The second was a decision on the signature of an air transport agreement between the EU and Brazil. Ministers pre-signed the agreement in the margins of the Council.
Among AOB items, the Commission reported on air cargo security work which has been carried out in pursuit of the action plan endorsed by Ministers at the December 2010 JHA and Transport Councils. They were disappointed that a proposal to strengthen EU inbound air cargo security had been narrowly defeated in the June Regulatory Committee, and called on Ministers from member states which voted against or abstained to rethink their position, I joined Germany in expressing strong support for the Commission, and called for work to continue on the proposal.
Also under AOB, the Commission reported on work to deal with the impact of volcanic ash on the EU aviation sector and on recent developments in implementing the Single European Sky. On volcanic ash, I underlined the importance of developing the existing methodology and modelling, and increasing pressure on equipment manufacturers for engine tolerance levels.
In the margins of the Council, I met Ministers from France, Germany, Ireland and the Netherlands to discuss the work on volcanic ash. In a separate discussion, I exchanged views on better regulation with the Netherlands Minister.
The UK abstained on one item on the A point list, namely the adoption of a Council decision on the conclusion of a memorandum of co-operation between the EU and the International Civil Aviation Organisation (ICAO). This reflects our general need to be vigilant regarding the balance between member states’ and EU competence in UN bodies and other international organisations.
Oral Answers to Questions
Lord Hammond of Runnymede Excerpts(12 years, 10 months ago)
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Mike Freer (Finchley and Golders Green) (Con)
1. What recent representations he has received on the competitiveness of UK airports.
The Secretary of State for Transport (Mr Philip Hammond)
I regularly receive representations from the aviation industry and other stakeholders on a range of issues relating to UK airports.
Mike Freer
I thank the Secretary of State for that answer. He may be aware that some have suggested a congestion levy on south-east airports to fund a discount on air passenger duty in regional airports. What assessment has he made of the competitiveness of south-east airports in view of this ludicrous suggestion?
Mr Hammond
I think my hon. Friend’s question betrays the fact that he has already made his own assessment. I believe that this suggestion was made in a response by regional airports to a consultation on APD conducted by my right hon. Friend the Chancellor. No doubt the Chancellor will respond to those suggestions in due course.
Graham Stringer (Blackley and Broughton) (Lab)
I think it is an excellent suggestion. There is huge capacity in the regional airports and since there has been complete freedom to fly anywhere in Europe, it has been difficult for Governments to use that capacity. Does the Secretary of State have any ideas how that extra capacity in regional airports can be used to the benefit of the UK economy?
Mr Hammond
The hon. Gentleman is absolutely right: there is significant capacity in our regional airport runways. We have to recognise that the demand for aviation growth in the UK is not just an aggregate demand—it has a certain geographical distribution—but I am keen that the regional airports play a role in meeting that demand. I believe that the high-speed rail project will help them to do so.
Mr John Leech (Manchester, Withington) (LD)
As part of the review, will the Secretary of State discuss with the Treasury the viability of having an APD holiday for new long-haul routes from regional airports to improve their competitiveness with south-east airports and airports on the continent?
Mr Hammond
As I said, my right hon. Friend the Chancellor has conducted a consultation on the future of APD and he has made it clear that any changes to the system would have to be broadly revenue-neutral. I do not know whether my hon. Friend submitted his suggestion during the course of the consultation, but if not, I am sure that the Chancellor would be prepared to take it as a late entry.
Mr Nigel Dodds (Belfast North) (DUP)
Does not the Secretary of State agree that the competitiveness of Belfast airports is gravely impinged by the fact that APD is levied at £120 for a return on business-class long-haul flights from Belfast, while 90 miles down the road in Dublin, it is €3 going down to zero. Clearly, as far as Northern Ireland is concerned, there is a strong case for looking at the issue of APD.
Mr Hammond
Once again, I am certain that the right hon. Gentleman will have submitted his views to the Chancellor in the consultation to which I just referred.
Maria Eagle (Garston and Halewood) (Lab)
Britain’s business community finds it incredible that the Government have no intention of bringing forward a proper strategy for aviation and UK airports for the next two years. Opposition Members believe that any expansion in aviation must be sustainable, but is it not nonsense for the Government to rule out any expansion in the south-east, regardless of whether or not it can be demonstrated to be sustainable. Is not the chief executive of London First right when she warns that this failure is
“damaging our economy and enhancing that of our EU rivals”?
Mr Hammond
The hon. Lady is right that we have a big challenge in relation to aviation growth in the south-east. What I did not hear her do was repeat Labour’s policy to build a third runway at Heathrow airport. Perhaps at some stage she could tell the House whether that remains Labour’s policy. The coalition Government cancelled the third runway at Heathrow because of the unacceptable environmental burden that it imposed, but we are committed to developing a new and sustainable aviation strategy that will allow the growth of aviation in the UK—but only when it meets its environmental obligations.
Stephen Mosley (City of Chester) (Con)
2. What recent representations he has received on varying national motorway speed limits.
Mrs Helen Grant (Maidstone and The Weald) (Con)
6. What progress his Department has made on its consultation on High Speed 2.
The Secretary of State for Transport (Mr Philip Hammond)
I launched the national consultation on high speed rail on 28 February. It will close at midnight on 29 July and decisions will follow by December. The Government consider that a high-speed rail network between London and Birmingham and onward to Manchester and Leeds would drive economic growth and prosperity as well as providing vital new capacity on the west coast corridor.
Mr Hammond
Absolutely. My hon. Friend makes the point very clearly. I believe that it is not possible for Britain to maintain its prosperity in the 21st century in an increasingly competitive global economy unless we can close the growth gap between north and south. Governments for the past 50 or 60 years have wrestled with this challenge and we have not succeeded yet. This approach of investing in strategic infrastructure is the last best chance to achieve that.
Lilian Greenwood (Nottingham South) (Lab)
Does the Secretary of State share my view that developing the eastern leg of the “Y”, which will link the great core cities of Nottingham, Sheffield and Leeds, has a very strong business case and should be prioritised?
Mr Hammond
I agree that it has a very strong business case and it will be part of the “Y” network, but the logic of building this project is that we have to do the complex engineering challenge of getting out of London through tunnels—the difficult bit of the project—first. In engineering terms, once we are out of the tunnels, it is pretty much plain sailing to complete the remainder of the construction.
Mr Adrian Sanders (Torbay) (LD)
Will the Minister please give thought to the people of the west country who have some of the slowest rail links with London and some of the most expensive fares? Rather than extra, speedy lines north, we would like some speedy and efficient lines south-west.
Mr Hammond
I am delighted to be able to tell my hon. Friend that electrification of the Great Western main line and the introduction of the IEP rolling stock will improve services in terms of speed, reliability, comfort and capacity on services between London and the west country.
Emily Thornberry (Islington South and Finsbury) (Lab)
7. What steps his Department is taking to ensure that the Crossrail programme provides adequate toilet facilities at stations and on its rolling stock.
Kevin Brennan (Cardiff West) (Lab)
8. What proportion of its stake in NATS Ltd the Government plan to sell; and if he will make a statement.
The Secretary of State for Transport (Mr Philip Hammond)
I recently launched a call for evidence on whether the Government need to retain a shareholding in NATS in order to meet our aviation policy objectives. The results will inform decisions on whether to sell all, part or none of the Government’s shareholding in the company. I expect to update the House once we have considered the responses to the call for evidence.
Kevin Brennan
Do I take it from that reply that the Secretary of State is considering a complete sell-off of the Government’s interest in NATS? Will he also tell us what consultations he is having with the staff and the airline group about their views on the matter?
Mr Hammond
The call for evidence has gone to stakeholders in and around the company and the air traffic sector. We asked what the implications would be of selling all, part or none of our shareholding. We are open-minded and conscious of the fact that there could be strategic implications, and we want to understand from the people who work in the industry what those strategic implications might be before making any decision.
Chris Evans (Islwyn) (Lab/Co-op)
9. What recent discussions he has had with FirstGroup on the future of the First Great Western rail franchise; and if he will make a statement.
Jo Swinson (East Dunbartonshire) (LD)
14. What steps he is taking to encourage take-up of low-carbon vehicles.
The Secretary of State for Transport (Mr Philip Hammond)
The Government have made provision of over £400 million for measures to promote the uptake of ultra-low-carbon vehicle technologies. These measures include support for consumer incentives, the development of recharging infrastructure and a programme of research, development and demonstration work. Low-emission vehicles also benefit from tax advantages.
Jo Swinson
A convenient network of publicly available charging points is essential if we are to encourage the uptake of electric cars, so I welcome the £1.45 million of Government funding for Transport Scotland to build 375 charging points across the central belt of Scotland, but I was concerned at BBC media reports last month suggesting that the UK in general is behind schedule in getting these charging points in place. Will the Secretary of State give us an update on progress on charging points?
Mr Hammond
I am grateful to the hon. Lady for her question and I agree that we need to understand the way in which the public expect to use public charging points, in order to understand how we can best roll out the electric vehicle programme. Early evidence from other countries has produced some results that might not have been intuitive before the demonstration projects. It is true that the total number of charging posts that are rolled out will be less than was originally envisaged, because in a number of cases promoters of the plugged-in places schemes have determined that multi-headed charging posts are the best way forward. That accounts for some of the discrepancy in numbers to which I think the hon. Lady is referring.
Peter Aldous (Waveney) (Con)
Will the Minister consider maintaining the duty differential for sustainable biofuels? This has played an important role in creating green jobs, which are now threatened by the removal of the differential in April 2012.
Mr Hammond
As my hon. Friend knows, the differential plays an important role in bringing forward sustainable biofuels. In particular, the re-use of used oils is an important source of sustainable fuels. However, all matters relating to duty are for my right hon. Friend the Chancellor to consider and, when the current arrangements expire in 2012, he will consider whether to renew them and on what basis.
Mr Tobias Ellwood (Bournemouth East) (Con)
15. What recent discussions he has had with the Mayor of London on public transport provision during the London 2012 Olympics.
The Secretary of State for Transport (Mr Philip Hammond)
I have lead accountability in Government for transport preparations for the 2012 Olympic games. Ministers and departmental officials regularly meet and correspond with the Mayor of London and Transport for London officials on a variety of London transport issues, including those in relation to the 2012 Olympics. The Mayor of London also attends the regular meetings of the Cabinet Sub-Committee overseeing preparations for the Olympics, of which I am a member.
Mr Ellwood
Not all the events are taking place in London. Bournemouth is still coming to terms with losing the bid for the beach volleyball to Horse Guards Parade. However, Weymouth is delighted to be hosting the sailing events. Will the Secretary of State outline what improvements to transport will take place for 2012 in that area?
Mr Hammond
I agree that on the face of it Bournemouth has a better beach than Horse Guards Parade, but there we are. My hon. Friend is right to draw attention to the transport challenges around the other venues. Plans to improve transport access to Weymouth during the Olympic games include temporary traffic management and a £5.7 million scheme to improve the Canford Bottom roundabout, which will include the installation of 70 additional traffic lights to control traffic flow. During this summer, the Highways Agency will be trialling the use of its traffic officers on the route between London and Weymouth as an additional means to manage traffic flows.
Karl Turner (Kingston upon Hull East) (Lab)
16. What plans he has for future improvements on the A63.
Kate Green (Stretford and Urmston) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Transport (Mr Philip Hammond)
Since I last answered departmental questions, Sir Roy McNulty has published his report on improving value for money on our railways, which I have committed to responding to by publishing detailed proposals for the future of the railways before the end of the year. I have published a new strategic framework for road safety and announced the outcome of the competition to build carriages for the Thameslink programme. Today my right hon. Friend the Minister of State has launched a consultation on proposals to reform the air travel organiser’s licence holiday protection scheme. I have also dealt with the consequences of the Grimsvotn volcano eruption, which is a good deal easier to say than Eyjafjallajokull and, I am pleased to say, caused a good deal less disruption.
Kate Green
Trafford Park in my constituency is home to many international businesses and makes a crucial contribution to UK manufacturing and exports. Excellent rail links are essential to its success. In planning for High Speed 2, what is being done to ensure that it and the wider regional rail network are fully integrated?
Mr Hammond
I would make two points to the hon. Lady. First, High Speed 2 will release significant amounts of capacity on the west coast main line, which will be available for different types of service, including freight. Secondly, we are clear that high-speed rail is not an alternative to investment in our conventional railways. Once people arrive at the high-speed destinations they will still need to get to their local destinations across the region, so we have to reinforce the regional rail networks as part and parcel of the programme of rail investment.
Stephen Phillips (Sleaford and North Hykeham) (Con)
T3. I recently had the pleasure of meeting the parish council in the village of South Kyme in my constituency, which brought to my attention the loss of the village’s only bus service. Many constituents have reported to me the loss of bus services, which are incredibly important for rural communities. What support can the Department lend to re-establish that service and ensure that those that exist remain?
Margaret Beckett (Derby South) (Lab)
Is the Secretary of State aware that words such as “rebalancing our economy to promote private sector jobs and skilled manufacturing” ring very hollow in Derby, where 3,000 such jobs are now at risk as a result of a decision to build Thameslink trains in Germany? I understand that the Government reviewed and reconfirmed the contract after the election, but I understand also that the Secretary of State still has the power to call in the process and to invite the bidders to re-tender. Can he confirm that he will now do so?
Mr Philip Hammond
I understand the disappointment felt by Bombardier and, indeed, the anxiety felt by the people of Derby about that decision, but before the right hon. Lady delivers me a finger-wagging lecture perhaps I can remind her of a couple of points. Her Government designed and initiated the procurement process, and some Members may remember that they used to call it Thameslink 2000. We inherited it 16 years late and £600 million over budget, and it fell to us effectively to open the envelope. The procurement was carried out under the terms of the EU directive, and the Siemens bid offered the best value for money on the criteria for appraisal set out in the original competition that the previous Government launched. We have to comply with EU law, and I do not have the power that she suggests I have.
I firmly believe that free trade and open markets are the best way for us to proceed, but I believe also in the concept of the level playing field, and there is a case for looking at the way in which some of our neighbours and competitors operate the EU procurement directive, because it seems quite astonishing that, complying with that directive as we do, they have managed to achieve very high percentage penetrations of French-built trains on the French railway and of German-built trains on the German railway.
Mr Edward Timpson (Crewe and Nantwich) (Con)
T6. As my right hon. Friend has just said, the previous Government tied the hands of this Government on such decisions, including the Thameslink contract, which, as he is aware, affects my constituency. What can we do to ensure that British business does not lose out as a result of this false economy of going for cheap foreign contracts that leave us picking up the domestic dole bill?
Mr Hammond
I understand the concern of people in Crewe as well, of course, but we must not fall into a trap. The Siemens bid clearly offered the best value for money, and we must not lose sight of that fact. The wider issue of how we operate the procurement directive, and of how we work with the UK supply chain in industries such as rolling stock construction, is something that we need to review, and I am in discussions with my right hon. Friend the Business Secretary about how we do that.
Lisa Nandy (Wigan) (Lab)
T5. I recently met a group of my constituents from Hunter Lodge in Wigan, who told me that they are unable to travel together on train services throughout the country because most companies will carry only one wheelchair user at a time. Does the Minister agree that, 16 years after the landmark Disability Discrimination Act 1995, it is entirely unacceptable that that appalling situation should continue? What is he therefore doing to put pressure on train companies to ensure that the situation does not continue?
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
The Secretary of State will no doubt have seen the reports in yesterday’s newspapers about Willie Walsh of British Airways having suggested that as a consequence of the fact that a third runway will not be built in the south-east at Heathrow, he will increase BA’s business in Madrid. Is that not rather ironic?
Mr Philip Hammond
I am pleased to see that British Airways, along with BAA, now accepts the finality of the coalition Government’s decision that we will not allow the building of a third runway at Heathrow airport. However, that is not the end of the matter. We have to provide for aviation growth in the south-east of England, and in the UK as a whole, in order to meet the needs of a growing economy in future. That is why we have launched a scoping document and will bring forward a new sustainable aviation policy by the end of next year.
Andrew Stephenson (Pendle) (Con)
T9. Will my right hon. Friend update the House on what progress has been made on the reopening of the Todmorden curve, which will provide a faster rail route between East Lancashire and Manchester?
EU Transport Council
Lord Hammond of Runnymede Excerpts(12 years, 11 months ago)
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The Secretary of State for Transport (Mr Philip Hammond)
I will attend the second Transport Council of the Hungarian presidency which will take place in Luxembourg on 16 June.
The Council will be asked to reach a general approach on a directive which recasts the 2001 first rail package. The 2001 legislation set the initial framework for a single European rail market. The proposal aims to address the fact that the first railway package has not achieved its declared objective of market opening through a number of proposals to improve the transparency of rail market access conditions and access to rail-related services.
Although we support the Commission’s overall aim of clarifying and strengthening the regulatory framework for rail access and recognise the need for some further liberalisation in continental Europe, we have concerns about the investment disincentives and the cost impacts of some of the proposals on the UK. We have negotiated changes which align the text more closely with the arrangements which prevail in the UK, while preserving the proposals for liberalisation in continental Europe. However, there is little in the package which gives the UK any added value over the existing first railway package directive.
The Council will also be asked to reach a general approach on the draft amending regulation 1406/2002, which established the European Maritime Safety Agency. The proposed amendment, while maintaining the agency’s present objectives, gives it several new, largely technical, tasks. While we recognise the importance of the additional tasks, we are opposed to any increase in the budget, unless it is financed through reprioritisation of funds from other areas of the EU budget.
There will be a policy debate on the European Commission’s recent White Paper, “Roadmap to a Single European Transport Area—Towards a competitive and resource efficient transport system”. The broad thrust of the White Paper is in line with the UK’s goal of a transport system that supports economic growth while delivering CO2 reductions. The Council debate will centre on a number of questions put by the presidency. Our position includes a clear request to the Commission that detailed initiatives arising from this general policy framework are feasible and realistic, avoid excessive regulatory burdens on business, and respect the principle of subsidiarity.
The Council will be asked to adopt conclusions on a recent Commission communication, “The way ahead towards integrated and competitive EU inland waterway transport”. The conclusions are acceptable to the UK.
The Council will be asked to adopt a decision on the signing and conclusion of an agreement with the intergovernmental organisation for international carriage by rail on the EU accession to the convention concerning international carriage by rail (COTIF) of 9 May 1980, as amended by the Vilnius protocol of 3 June 1999. The UK can support adoption of the decision.
The Council will be asked to adopt two decisions in the area of aviation external relations.
The first is a decision authorising the Commission to open negotiations with Moldova on a comprehensive air transport agreement. A comprehensive air transport agreement will result in the integration of the Moldovan aviation market into the single European market through the convergence of EU aviation regulations, technical assistance and market opening. I will support the decision authorising the opening of negotiations.
The second decision is on the signature of an air transport agreement which has been negotiated with Brazil. This agreement will significantly liberalise the market in air services between the EU and Brazil, providing new opportunities for the aviation industry. I will support the decision and sign the agreement.
Among AOB items, the Commission will be reporting on progress in work on air cargo security. As I did at the March Council, I will reiterate the importance of moving forward quickly with this work.
Also under AOB, the Commission will report on the follow-up to the volcanic ash crisis of 2010, looking at the wider scope of crisis management and EU methodology and on recent developments in implementing the Single European Sky.
NATS (Government Share Ownership)
Lord Hammond of Runnymede Excerpts(12 years, 11 months ago)
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The Secretary of State for Transport (Mr Philip Hammond)
Today I am publishing a call for evidence to support my decision making in whether to sell all, part or none of the Government’s 49% shareholding in NATS—formerly National Air Traffic Services.
It was announced in the Budget March 2011 that the Government
“intends to realise value from its shareholding in NATS, subject to considering the views of key interested parties”.
This commitment reflects the Government’s policy that assets held in the public sector, where there is no policy requirement to do so, tie up state resources that could deliver better value for money for the public if used elsewhere. We are seeking evidence through this process from key interested parties including the regulator, employees of NATS and the wider aviation industry, to establish whether or not there is a policy requirement to retain a shareholding in NATS.
NATS provides strategically important services to the UK and as such, I want to ensure that the overall aviation policy objectives of safety, security, economic regulation, civil/military co-operation, environment and supporting the Single European Sky programme are not compromised by any decisions we take over future share ownership. The call for evidence document outlines the controls and protections that exist in NATS’ operating environment independent of the Government’s shareholding and seeks evidence from consultees on what, if any, protections would be required on top of these to allow the delivery of these objectives.
The call for evidence will be open from today until 6 July and we aim to publish the results shortly after the closing date. The evidence collected will support my final decision about whether to sell Government shares in NATS.
British Transport Police
Lord Hammond of Runnymede Excerpts(12 years, 11 months ago)
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The Secretary of State for Transport (Mr Philip Hammond)
The Government are committed to the security of the country and as such keep our capabilities under constant review. As part of this, I am today announcing, with the agreement of my right hon. Friend the Home Secretary, that the security of the railways and London Underground will be further enhanced by the development of a British Transport police (BTP) armed capability that will be deployed as appropriate in response to the terrorism threat level at any given time.
The Government have been considering the resilience of the overall police armed capability and have concluded that it would be beneficial to enhance this by providing the BTP with an armed capability of its own. The timing of this is not as a result of any specific threat: it is a sensible and pragmatic approach to ensuring that our police forces have the right resources to be able to respond as and when needed to protect the public.
By sanctioning the development of this armed capability, we will reduce the burden on other police forces which currently provide armed support to the BTP. This is not a major new capability in terms of overall armed policing, but by training BTP officers to carry out armed patrolling of the rail network it equips BTP with a capability already available to other police forces. Armed patrols will be deployed according to operational need—it will not be a daily event to see armed officers at stations.
We will continue to work with the BTP and others to assess the use of this capability and its effectiveness and impact. I would like to reassure Parliament that this is a measured and proportionate approach to supporting the BTP in maintaining public safety on the railway.
McNulty Report and West Coast Rail
Lord Hammond of Runnymede Excerpts(12 years, 11 months ago)
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The Secretary of State for Transport (Mr Philip Hammond)
With permission, Mr Speaker, I would like to make a statement about the publication today of Sir Roy McNulty’s independent study into value for money in the rail industry, and to update the House about the west coast franchise process.
Sir Roy’s report notes that UK rail has enjoyed a revival in recent years, with strong and resilient growth in overall passenger numbers and in passenger satisfaction, and huge improvements in reliability and safety. The Government want Britain’s railways to continue to prosper and have demonstrated by their actions their commitment to them. Despite the difficult fiscal climate, we have allocated funding to complete Crossrail and Thameslink, and to support the upgrade of the London underground. We have announced electrification on the great western main line and in north-west England. We have resumed the intercity express programme to improve reliability, comfort and journey times on the east coast and Great Western main lines. We have given the go-ahead to the Ordsall chord project in Manchester and the Swindon to Kemble redoubling. We have confirmed the purchase of more than 2,000 new rail vehicles for Thameslink, Crossrail and other franchises, and the cascading of 100s more. Last but not least, we have begun the High Speed 2 consultation process.
But Sir Roy made another, less welcome, finding. Spending on the passenger railway has increased by 60% in real terms since 1996-97—that is more than £4 billion—and despite significant passenger growth, unit costs in 2009 were almost exactly the same in real terms as in 1996. Therefore, UK rail is now up to 40% more expensive per passenger mile than the railways of our European competitors. Allowing for unavoidable differences, Sir Roy estimates that UK rail costs are 20% to 30% higher than they should be, and that potential savings of between £740 million and £1.05 billion a year could be found by 2018-19 without any reduction in services. Those savings, added to the savings that Network Rail is committed to achieving up to 2014 and the savings that Sir Roy expects the regulator to seek from Network Rail over the period to 2019, should largely close the efficiency gap.
Many of Sir Roy’s recommendations are directed to the industry, and the open and inclusive process that the study adopted means that some of them are already being implemented. The industry has come together to form a rail delivery group to provide the leadership that Sir Roy noted was lacking in the past. Network Rail has announced its plans to devolve significant autonomy to route managers across the network, starting with the Wessex and Scottish regions.
Sir Roy’s remit, which was set by my predecessor and the Office of Rail Regulation which co-sponsored the study, was narrowly focused on the cost base of the railway. He makes a large number of recommendations. Over the coming months, the Government will consider the recommendations that are directed to them, and they will deliver their response later this year. Many of the recommendations on franchises reflect the changes that the Government have already announced. In addition, I can confirm today that my Department will accept Sir Roy’s recommendation that it should conduct a full review of fares policy, which will include addressing anomalies in the current system and the potential for much greater use of smart technology. In parallel, the Government are developing a wider rail strategy to ensure that we have an affordable, sustainable, safe and high-quality railway that delivers a better deal to taxpayers and fare payers. It will set out clearly the roles of central and local government, train operators and Network Rail in securing the future of the railway.
This is urgent and vital work. Let us be in no doubt that the excessive cost base that Sir Roy has identified is the reason that UK rail fares are the highest in Europe by some margin, even though our levels of taxpayer subsidy are also among the highest in Europe. Let us be clear about the potential prize. The successful delivery of cost reductions over the next few years on the scale set out by McNulty would enable us to reduce levels of taxpayer subsidy and, at the same time, put the era of inflation-busting fare increases behind us.
To achieve the challenging targets for cost reduction and industry-wide efficiency that Sir Roy has identified, all players in the industry will have to work together. The train operators, Network Rail, rolling stock companies, unions and the Government cannot avoid playing their part if we are to deliver a sustainable and affordable railway for the future.
Sir Roy makes it clear that the Department needs to step back from excessively detailed specification of train services and the micro-management of rail operations. I recognise that that will represent a major culture change, but it is one that I am determined to deliver. I would like to place on record my thanks to Sir Roy McNulty and his team for the excellent work they have done, and to welcome Sir Roy’s commitment to working with the industry on an ongoing basis.
I also wish to announce to the House the publication of the draft invitation to tender and stakeholder briefing document for the intercity west coast franchise, which lays out the train service specification that I am minded to procure for that route. As I have said, the Government have already adopted Sir Roy’s recommendation that franchise specifications should become less prescriptive. The proposed train service specification for intercity west coast represents a relaxation of the rigid timetable specifications of the past, while retaining obligations that protect the key elements of service such as principal first and last train services and minimum numbers of station stops per week and per day. That marks a significant shift from the micro-management under the current system that has prevented operators from maximising capacity and reacting to the changing demands of their passengers.
Among other proposed changes, we intend to replace the current cap and collar revenue-sharing system that has driven perverse behaviour by train operators with a gross domestic product-based risk-sharing arrangement and a profit-sharing mechanism that will ensure that the taxpayer benefits from any unexpected profits over the term of the franchise.
Because the relaxation of the full prescription of train services in line with Sir Roy’s recommendations was not signalled in the consultation document that we published on 19 January, I have decided that it is right and proper to consult on the proposals again, starting today and ending on 17 August. As a consequence of that decision, I can inform the House that the new franchise for the intercity west coast will now be awarded in August 2012, after a competitive process involving the four shortlisted train operators, and will commence operations on 9 December 2012. In making that decision, I have deliberately avoided a change of franchise immediately ahead of or during the Olympic period. I have also decided to take advantage of the short delay to complete the integration of the 106 new Pendolino carriages into the fleet prior to the commencement of the new franchise. The Department will seek to agree acceptable terms with the existing franchisee for a contract extension to 9 December 2012, but Directly Operated Railways Ltd, the Government-owned company that runs East Coast, will be ready to operate the franchise between April and December 2012 if necessary.
Copies of the rail value-for-money study and the draft invitation to tender for the west coast main line have been placed in the Libraries of both Houses and are available on the Department’s website. Our expectation is that future passenger franchises on UK rail will allow operators greater flexibility to meet passenger demand and pursue innovation, while protecting the key elements of service for passengers.
Longer franchises and a changed relationship with Network Rail will have a positive impact on the behaviour of train operators and their appetite for investment and risk taking. However, I want to send a clear message that the new culture of co-operation in the rail industry, and the focus on cost reduction, is here to stay and is mandatory, not optional. I can announce today that as a matter of policy for all future franchise competitions, a significant part of the assessment of bidders’ capability at the pre-qualification stage will be evidence of success in collaborative working and driving down costs.
The facts are clear: our railway costs too much, and in consequence fares are rising faster than inflation and taxpayer subsidy has reached unsustainable levels. To secure the future of the railway, we now have to tackle that problem after a decade of ignoring it and get costs into line with those of our European comparators, bringing relief to taxpayers and the prospect of an end to the era of above-inflation fare increases to passengers. I commend this statement to the House.
Maria Eagle (Garston and Halewood) (Lab)
I begin by thanking the Secretary of State for early sight of his statement. May I place on record the thanks of Labour Members to Sir Roy McNulty for the detailed and thorough work that he has carried out? As the right hon. Gentleman acknowledged, that work began under the previous Government.
I have said before that we would look seriously at the conclusions of the value-for-money review and support any sensible proposals to take costs out of the industry. I promise again today that we will study the details of Sir Roy’s report, and that it will inform our own transport policy review.
I agree with the Secretary of State that we should reduce the public subsidy to the rail industry, and we need to be clear about why much of that subsidy exists if we are to address it effectively. It is partly the result of the enormous structural fragmentation within the industry, and let us be clear that that fragmentation is the legacy of the botched privatisation carried out in the dying days of the last Conservative Government. The Secretary of State should have apologised today for the shambles of that privatisation and the staggering sums of money wasted as a result. Unlike him, I take our share of the responsibility for being too timid about addressing that fragmentation during our time in government.
Closer working between train operators and Network Rail makes sense, and I support the internal reorganisation that is going on at Network Rail and many of the proposals that have been made to ensure that costs are removed through greater partnership. I am pleased that the Secretary of State appears to have stepped back from his earlier plans for the wholesale breaking up of our rail infrastructure, which would have been a costly mistake and added yet more fragmentation to the industry. Can he confirm that he does not intend to proceed with an experiment of handing track over to train operating companies within any of the franchise areas? Previously there has been briefing that the East Anglia franchise would be used for that experiment. Can he reassure the House that that is no longer the plan?
I welcome the Secretary of State’s decision to establish a proper review of fares. Despite the efforts that we made, the current system is too complex and leaves passengers frustrated. However, does he understand why passengers will have very little faith that he does not intend to impose yet further hikes in ticket prices? At a time when families are feeling the squeeze on their household budgets, he has imposed fare rises of more than 30% over the next three years. I believe he was wrong to give back to train companies the right to average out the cap across their fares, rather than apply it to each fare individually as we insisted when we were in government. He was also wrong to increase the cap on regulated fares from 1% to 3% above inflation.
In opposition, the current Minister of State said that fare rises of such a level would
“price people off the railways”,
and the Under-Secretary of State, the hon. Member for Lewes (Norman Baker), promised below-inflation fare rises—more broken promises from the two Government parties. Will the Secretary of State reject proposals to give the train operating companies greater freedom to set the level of fares? Will he listen to his own consumer watchdog, Passenger Focus, which has today described the suggestion of reducing regulation on off-peak tickets as a “leap in the dark”? Does he share its concern, as I do, that if the plans go ahead, we might end up with affordable, flexible travel for longer journeys being confined to a brief window in the middle of the day?
Will the Secretary of State also reject the suggestion to remove any role for politicians in the setting of fares, which would effectively remove any public accountability for fares through the ballot box? The link between the fare box and the ballot box should not be broken.
May I urge the right hon. Gentleman to approach reform to staffing levels and pay and conditions within the rail industry in a spirit of partnership, not confrontation? That is something that we have not seen in the language and tone of briefings by his Department in recent days. I urge the trade unions to work with the Government as they look to carry out reforms within the industry, but will he ensure that he includes those who represent staff on the high-level group that he is establishing to take forward these reforms? As he considers staffing, will he understand the value that passengers place on staffed trains and open ticket offices, and the fact that women in particular feel safer in properly staffed stations, particularly late at night?
We have heard today the extent to which the right hon. Gentleman’s policy on rail franchising has descended into chaos and confusion, with his decision to delay the awarding of the west coast franchise. Can he confirm that First Group is to hand back its Great Western franchise three years ahead of schedule? Is the reason that it has given for that decision, as reported in the press, that it has calculated that it will make losses in the final years of its franchise period? Does he agree that that is unacceptable?
Will the Secretary of State confirm that there is a possibility that the east coast main line, the west coast main line and the Great Western franchises will all be run by the Government while he decides what his franchising policy is? Does that not make a mockery of the whole franchising system?
Does the Secretary of State understand why commuters in East Anglia are dismayed at the cost and chaos of his decision to award a contract for less than two years, risking three owners in as many years, with only the companies that supply the paint to redo the liveries benefiting? Are not the future of franchising, the massive public subsidies that go to the private train operating companies, and the vast sums that leave the industry in profits the big missing pieces of the work of looking at costs in the industry?
I welcome the Secretary of State’s decision to replace the current cap and collar revenue-sharing system, but does he agree that we will not get the costs of the industry under control until we look seriously at its structure and the future of franchising? The public want a simplified industry—one in which the driving force is less maximising profit and squeezing every last penny out of the fare payer and the taxpayer, and more the delivery of a world-class service. That is why I have committed Labour’s policy review to look at alternative models for the future of the rail industry, including not-for-profit models. I urge him to do the same.
Finally, the right hon. Gentleman’s statement was not the only announcement to be widely spun and briefed to the media in advance of his coming before the House. Several newspapers are reporting that he has abandoned his plans to close more than half the UK’s coastguard stations, yet the Opposition understand that far from abandoning the plans, he has simply put them on hold. Those plans were never agreed by Ministers in the previous Government, and I would not have approved them. Will he now take this opportunity to end the huge uncertainty facing coastguard stations and agree to abandon those reckless proposals?
Mr Hammond
I might get some guidance from you, Mr Deputy Speaker, on whether it is appropriate for me to respond to the hon. Lady’s comments on coastguards—I would be happy to do so if you indicate that that is in order.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. It is up to the Secretary of State which points he wishes to answer.
Mr Hammond
Thank you, Mr Deputy Speaker, for that very helpful guidance.
I am grateful for the hon. Lady’s comments about Sir Roy, who was of course appointed by my predecessor. I very much hope that we can take forward the rail reform agenda with a degree of cross-party consensus, which would be very helpful—realistically, it is asking a great deal to expect that we will agree on everything.
The hon. Lady blames “structural fragmentation” for the high cost of our railway. She obviously has not yet had a chance to read the full report, but when she does, she will see that Sir Roy identifies many causes. However, she seems to be displaying the famous Labour disease of collective amnesia. She might recall the inconvenient facts that her Government created Network Rail a decade ago, and that her Government spent 13 years in power doing nothing at all about the structural fragmentation of which she now complains.
The way forward that passengers and taxpayers would expect us to take for our railway is one of evolution rather than revolution, although that evolution must be rapid. I have taken a conscious decision, which I conveyed to Sir Roy, that I would like to see how far we can go within the existing railways legislative framework rather than spark an ultimately unproductive and, for passengers, entirely unhelpful political debate over the next couple of years on major railway legislation. The idea of Sir Roy McNulty’s agenda is to take forward significant reductions in costs in the railway within the existing legislative framework.
The hon. Lady asked about track-train integration. As she will know, Sir Roy has suggested that we pilot closer integration between train operators and the devolved Network Rail infrastructure operations on the different routes and regions. Sir Roy suggested that the railway is not homogeneous, and that we should go forward at different paces on different sections of our railway. I agree with that general principle. We will look very carefully at Sir Roy’s specific proposals and suggestions on track-train integration, and incorporate a response into the wider rail reform proposals with which I intend to return to the House before the end of this year.
The hon. Lady welcomed the fares review, and I am grateful to her for that. She asked whether the review is a cover or code word for increases in prices, but I say this to her: the Government want an end to the era in which fares rise faster than inflation, but we can do that only by delivering Sir Roy’s savings and by getting the costs of our railway back under control. That prize is within our grasp if we progress Sir Roy’s agenda. To reassure her, I have no intention of ending the system of regulated fares. That is not suggested by Sir Roy, and I know not where she got the idea that I was in favour of it.
The hon. Lady asked me to try to take a collaborative approach with the unions on labour productivity. I would be delighted to do so if an opportunity arises. I was slightly heartened by what I heard Bob Crow say on the radio this morning, although I may have heard only a part of the total interview. He said he was willing to look at proposals for more efficient working practices, which is at least better than his saying that he is not willing to look at such proposals. We must be clear that all players in the industry must change if we are to harvest those savings. The prize for the unions is also big. The railway is a growing industry—it is not in decline, as it was before privatisation, but growing rapidly and robustly—and huge increases in passenger numbers are projected. If we can deal with the problems of the cost base, we could have a hugely successful business for the benefit of British fare payers and taxpayers.
The hon. Lady has won me a small bet by referring to my strategy on west coast franchising as being in “chaos and confusion”, so I am grateful to her for that. In fact, I have today announced an example of open government. We could have progressed with the draft invitation to tender that I published today without further consultation, but I felt that because there has been a material change from the documents that we circulated at the time of the January consultation, it is right to consult again. That introduces a three-month delay, and I do not want the franchise changeover to come immediately before the Olympics, which necessarily means a delay until the latter part of next year, which gives us the opportunity to complete the integration of the Pendolino fleet. We have taken a set of careful and interlinked decisions on the timetable for that franchise, and I hope that, on reflection, she welcomes the approach that we have adopted.
The hon. Lady asked about First Great Western. It is of course true that First Great Western has decided to exercise the break clause that exists in its franchise, which allows it to surrender it in 2013 rather than in 2016. However, before she adopts too strident a tone, she should remember who let that franchise with that break clause in it. First Group has exercised the rights that her Government gave it in that franchise. She might also reflect on the fact that her Government let the GNER franchise and the NXEA franchise before she gets too strident about them as well.
The hon. Lady mentioned profit in the railway. I do not consider “profit” to be a dirty word. I consider that proper incentives and profit-making companies delivering efficient public services can be effective ways of delivering for the taxpayer and the passenger. This Government will introduce a profit-sharing arrangement in new franchises, the like of which does not appear in the current crop of franchises, which her Government let, and the like of which would have prevented situations such as the one on the Trans-Pennine franchise, where profits of 30% on revenue are being earned. We will ensure that the taxpayer gets a fair share of any unanticipated profits that are earned over the lifetime of the franchise. I hope that we all have the same objective—the delivery of a world-class railway service that is affordable for taxpayers and for fare payers. However, to deliver that, we have to drive out cost-effectively and, after Members and others have heard what I have had to say and what the hon. Lady has had to say, it will be for them to decide who will most effectively be able to achieve that objective.
Mr Robert Buckland (South Swindon) (Con)
Does my right hon. Friend accept that for many Swindon residents travelling to and from London to work during peak hours has resulted in eye-wateringly high fares for far too many years? What hope can he offer them for the future of peak-time rail fares?
Mr Hammond
There are two things that I can say to my hon. Friend. First, if we do not address the challenges that Sir Roy has set out, there will be only one direction of travel—worse services and higher prices. That is not acceptable to anybody in this House or in the country.
I want to make a point specifically about commuter fares and season tickets. At the moment, we have a very inflexible system of season tickets. People buy a season ticket which assumes that they will travel in peak hours every day. Increasingly, people have opportunities for flexible working patterns—indeed, the Government are committed to giving people greater opportunities for flexible working patterns. Smart ticketing technology will allow us to be able to start to recognise people who have a pattern of work that allows them to work at home one day a week or a fortnight, instead of their having to pay the rail fare even though they are not using the railway. That technology can help us to address some of the perverse incentives that season ticket holders currently have to use the railway in peak time when perhaps they do not always need to do so.
Geraint Davies (Swansea West) (Lab/Co-op)
On the issue of value for money and rail electrification, can the Secretary of State undertake to have a look at transnational transport funding from Europe to help to support the case for the Swansea to Cardiff electrification? It would complete the electrification from Paddington to Swansea and, with the ferry link to Ireland, provide access to significant European funding.
Mr Hammond
I have already made a statement to the House on the economics of the electrification from Cardiff to Swansea and I am afraid that those economics have not changed, but if the hon. Gentleman is raising the issue of trans-European network funding, I am not aware that there is any still available. However, I undertake to have a look at that potential source of funding.
Dr Julian Huppert (Cambridge) (LD)
I welcome this report and congratulate Sir Roy McNulty on it. Commuters and other travellers have suffered for far too long from high and complex fares and overcrowded trains. Can the Secretary of State assure me and all those who use the trains that the savings that must be made from the system will be returned to people in lower fares and better services?
Mr Hammond
I thank my hon. Friend for his question. I have to put it to him slightly differently: the savings will be returned to people in the form of lower taxpayer subsidy—which we have to deliver, because my Department, like every other Department, has to make its contribution to dealing with the fiscal mess that we inherited—and in due course, if they are successful, there will be lower pressure for upward real increases in fares. I would like to see a return to a world in which fares rise broadly in line with inflation, and a move away from the era of inflation-busting fare increase that we have faced over the last few years and, unfortunately, will have to face over the next three years.
Ian Lavery (Wansbeck) (Lab)
The McNulty report did not seriously consider the possibility of the reintegration of the rail system into public ownership. I mention that because many systems abroad are largely in public ownership. One of the reasons why our system is at least 30% more expensive is the billions of pounds siphoned off in profits and dividends. Will the Secretary of State explain why they did not look at that option and why it is not on the table at the moment?
Mr Hammond
A good old Labour contribution from below the gangway! Sir Roy McNulty did look at the options of greater integration, but the hon. Gentleman might not be aware that things have moved on a little in Europe since the last time he read the manual. European law on railways has evolved, and the separation of train operations from track operations is now mandated across the European Union. While much of the railway is still in public ownership, it is not integrated in the way that he may imagine.
Sir Roy’s clear conclusion was that a monolithic UK-wide system is not the direction of travel and that more devolution of responsibility and autonomy to route networks is the way forward.
Mr Edward Timpson (Crewe and Nantwich) (Con)
Although I understand the reasons behind the delay in the decision on the west coast main line franchise, can my right hon. Friend reassure my constituents that the decision will include provision for the train operators to play a more active role in the future of stations, especially in their infrastructure and presentation to passengers?
Mr Hammond
Yes, I can give my hon. Friend that assurance. The proposal that we have put forward—as he will see when he has a chance to look at the invitation to tender—is that the train operators should be granted a peppercorn rent lease of the station for the duration of the franchise. We also propose a revised residual value mechanism, so that train operators have an incentive to invest capital in station infrastructure throughout their franchises with the confidence that they will be reimbursed a fair value for that investment at the end of the franchise.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does Sir Roy’s report which, from what the Secretary of State has said, is very stimulating and interesting, mention the possibility of mutualisation or a co-operative form for Network Rail? We want a profitable, safe and effective service but if, as MP for Huddersfield, I look at the rolling stock that gets my constituents to Wakefield, Leeds and Manchester, I see that it leaves a great deal to be desired. Could we also see some changes on that front?
Mr Hammond
I am sure that the hon. Gentleman will have been pleased by the announcement that we made recently about additional rolling stock for the commuter services into Leeds. Sir Roy did not specifically address the question of any form of mutual structure. Network Rail is of course an independent company, and as Secretary of State I do not have any power to direct it. There are issues of the governance of Network Rail that need to be addressed, and I accept that, but I suggest that the urgent need is to look at its operational structure. The issues of governance and the rather theoretical question of ownership can be looked at on a longer time horizon. Right now we need to drive out cost.
Mr Marcus Jones (Nuneaton) (Con)
Following the work of the last Government, there are no fast off-peak services on the west coast main line to or from Nuneaton station. Many of the fast off-peak trains thunder through Nuneaton station half empty while there is a strong demand for off-peak services to and from that station. Will the west coast main line specification make it possible for franchisees to look, for example, at changing services so perhaps a fast train could stop at Nuneaton station every hour, trading off a small increase in end-to-end journey times for the possibility of maximising revenue on that service?
Mr Philip Hammond
I thought, at the beginning of my hon. Friend’s question, that perhaps he had missed what I said about less departmental micro-management, but I saw from how he ended that he had not missed it all. We will not mandate the new franchisee to do what he describes, but we will make it possible by relaxing the rigid timetabling and specification imposed in the past. We will also give operators an incentive to do so. By moving away from the cap and collar revenue-sharing regime, we will make operators much more responsive to the demands of passengers waiting on a platform and ready to pay good money to get on a train. In the past, that has not always been the case, because 80% of what passengers handed over went directly to the Government.
Mr Jim Cunningham (Coventry South) (Lab)
I note what the Secretary of State said about subsidies and fares—we will return to that later in the year—but will he give us a progress report on the Coventry Knuckle project, which I am sure he knows a lot about, because it would help Coventry’s economic situation?
Mr Hammond
As the hon. Gentleman knows, I had a productive meeting with him, some of his parliamentary colleagues and local councillors about the project. I think they took from that meeting clear guidance on what needs to be done to raise the project’s prospects of achieving local authority major scheme funding. I remain happy to engage with him and his colleagues in progressing that project.
Amber Rudd (Hastings and Rye) (Con)
Wages in Hastings have fallen dramatically against the rest of the south-east in the past 10 years, but wages of commuters are significantly higher. Does the Secretary of State agree that if we manage to redress the imbalance between the continually deteriorating service and higher wages, we would improve the regeneration of towns such as Hastings as well as the quality of life of commuters themselves?
Mr Hammond
My hon. Friend is right. High-quality rail services deliver major economic benefits to the towns they serve, which, of course, is one of the major rationales behind the Government’s enthusiasm for the high-speed rail project.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
What consideration has been given to a Welsh franchise based on a not-for-profit model operated by the Welsh Government? I believe that is the policy of at least two of the main parties in the National Assembly.
Mr Hammond
I am pleased to be able to tell the hon. Gentleman that franchising policy in Wales is a matter for the Welsh Assembly Government, so it will be for them to decide when the current Arriva Trains Wales franchise comes up for renewal, which—off the top of my head—is in 2016. However, I said something this morning that he will be interested in: I indicated that when we return to the House later this year with our proposals for broader rail reform, we will consider the greater devolution of regional railways and regional railway funding, both to the devolved Administrations and to local authorities and integrated transport authorities around the country. That will enable us to oversee the national strategic rail routes, but not manage the regional and local railways system, from the Department in London. That seems a sensible way of proceeding.
Duncan Hames (Chippenham) (LD)
I welcome the greater autonomy for Network Rail route managers in the Wessex area, because rail passengers in my constituency are endlessly frustrated by the pass-the-parcel attitude to responsibility for performance on the railways. In the light of First Great Western’s recent announcement, will the timing for the letting of the Great Western franchise enable the Government fully to embrace the McNulty report proposals in setting out the future of rail travel for my constituents?
Mr Hammond
Yes, of course. The fact that the Great Western franchise will be re-let in 2013 will enable us to bring forward to that date the incorporation of the benefits of McNulty’s work. However, I would re-emphasise that one of Sir Roy’s key conclusions—one that I strongly share—is that our railway is not the same in every area. What is right for the west coast main line might not be right for the East Anglia franchise. What is right for the northern franchise might not be right for the south-eastern franchise. We will consider each franchise individually, and look at different models appropriate to the type of railway involved. We will proceed on that basis, and we will learn as we go.
Mr Bob Ainsworth (Coventry North East) (Lab)
The west coast main line has improved dramatically over the years in both capacity and reliability, because of the investment made. However, it is the victim of its own success. Use has risen exponentially and the trains are packed at peak times. Despite what the Secretary of State said about regulated fares, there is a widespread fear that the proposals he has announced will allow substantial increases in off-peak rail travel fares. If that is so, it will not only damage people travelling in off-peak periods, but remove the incentive to plan one’s travel and thus make the crush at peak times even worse. What can he say in response to those fears?
Mr Hammond
I can say that they are unfounded. By the way, the right hon. Gentleman made the case for High Speed 2 more eloquently than I could. It will deliver a massive increase in capacity on the west coast corridor and allow much more innovative and flexible services on the west coast main line, which is now operating at—or very close to—capacity. However, there is a serious point about pricing and cliff edges in the pricing system. Anyone who stands at Euston station on a Friday evening will see that nobody wants to board a train at 6.50 pm or 6.55 pm, because that means paying the peak fare. They are all trying to get on the train at 7.2 pm, to the extent that the British Transport police regularly have to deploy to physically keep people off the trains for safety’s sake. That is a barmy pricing system. We have to consider the anomalies of massive cliff edges and try to smooth them out, so that there is less of an incentive not to travel on a particular train. However, overall I would expect such a move to be revenue-neutral across regulated fares; this is about managing the system better, not raising more money.
Mr Philip Hollobone (Kettering) (Con)
One of the understandable grumbles of the Kettering rail users group is that for historical reasons the fare for a journey from Kettering to London is disproportionately higher than that for a journey to London of a similar length from other places. Will the fares policy review seek to iron out such anomalies?
Mr Hammond
I do not want to pre-empt the rail fares policy review, to which I am sure that my hon. Friend will make a submission, but I have recently enjoyed meeting the Northampton rail users group, and the Minister of State has just said that she would be happy to meet the Kettering rail users groups, so perhaps we can carry a dialogue forward.
John McDonnell (Hayes and Harlington) (Lab)
I refer to my entry in the Register of Members’ Financial Interests. On a constituency matter, with regard to First Great Western and the handing back of the franchise, I would welcome the Secretary of State or the Minister convening a meeting of the relevant MPs along that line to discuss the security of service provision. This looks like a creeping re-nationalisation of the railway service—but there we are! However, as the Secretary of State said, there is a big staffing agenda. All three rail unions have welcomed the opportunity to work with the Government on that agenda. However, it is crucial that they are represented at every level of the industry and in every forum discussing the staffing agenda. It is not conducive to good industrial relations to have statements about threats of further anti-trade union legislation at this time.
Mr Hammond
I will have to disappoint the hon. Gentleman on creeping re-nationalisation: there is not one, and I can assure him that so long as I am in this job, there will not be one. However, I am happy to meet MPs along that route to talk about the Great Western franchise. First Group will continue to operate the franchise until 2013, and it has assured us that it will operate it as normal and run the franchise properly during that period. It has every incentive to do so, because, as I just announced, our policy is that eligibility for participating in franchise competitions will depend on demonstrated ability to deliver co-operative working, and to bear down on cost pressures.
I am absolutely ready to meet the unions. In fact, I think my office is in the process of arranging a meeting with the rail unions through the TUC, which I hope can play a constructive role in this process—it is a process I think we all want—of making this a viable and affordable industry that has a bright future, and which will employ not fewer but more people as the railway expands on the trajectory of current projections.
Jeremy Lefroy (Stafford) (Con)
I welcome the Secretary of State’s approach to the west coast main line franchise. As has been said, overcrowding in standard class in particular is a problem on the west coast main line. I pay tribute to the quality and courtesy of the staff I encounter in difficult circumstances. However, first-class carriages are often under-utilised. Can he confirm whether the new franchise will include a duty to take all practical measures to ensure that people do not have to stand on trains that often travel at more than 120 mph?
Mr Hammond
As I said earlier, the intention is to be less prescriptive. Train operators already have the freedom to de-designate first-class carriages and reconfigure their trains if they want to, and all the new Pendolino cars that will be inserted in existing nine-car sets will be standard-class carriages. I do not want to talk about imposing a specific duty on operators, but they will have to deliver on targets to reduce overcrowding, and we have powers to force them to take action if they do not.
Kelvin Hopkins (Luton North) (Lab)
I had the pleasure of meeting Sir Roy McNulty on two occasions during his consultation. I put to him the points made by Tom Winsor, the former rail regulator, that British Rail worked miracles on a pittance and that when the railways were handed over to the privateers, they were handed over “in good order”—his words. Also, the Catalyst report recorded BR as having the highest productivity of all the railways in Europe. BR was desperately underfunded, with not enough investment, but it worked miracles on a pittance. I also put it to Sir Roy that the staggering rise in costs that has occurred since privatisation is a direct result of privatisation. I personally believe that it is pie in the sky to think that we will bring those costs down without public ownership again. When is the Secretary of State going to look at that again?
Mr Hammond
I am not. I think the hon. Gentleman suffers from the disease—which I have noticed is quite widespread—of taking a rose-tinted retrospective view of British Rail. People were quick enough to criticise and complain about British Rail’s performance when it was operating; now, at 15 years’ distance, that era suddenly appears to have been some halcyon period of British excellence. The hon. Gentleman is right that British Rail operated the railway on a shoestring at relatively low cost, but in doing so it built up a tremendous legacy of under-investment and disregard for safety risk, the terrible consequences of which we saw only too clearly in the late 1990s and the early years of this century.
Graham Evans (Weaver Vale) (Con)
I welcome this report and the associated cost reductions on the west coast main line. We can learn from this report, so will my right hon. Friend please ensure that the forecast build and running costs for High Speed 2 are not exaggerated?
Mr Hammond
Yes. The High Speed 2 business case and the build and running costs put forward in the consultation document incorporate the Treasury’s generous additional percentages for risk and optimism bias—with as much as 60% added to the basic costs in some cases—to address the very concern that my hon. Friend outlines.
Jeremy Corbyn (Islington North) (Lab)
In all this emphasis on devolving and transferring responsibility to train operating companies, does the Secretary of State not recognise that there is a danger of losing the whole principle of having an integrated rail service, with integrated timetabling and ticketing for those who make complicated journeys? Additionally, he did not say very much in his statement about reopening disused branch lines, which could well benefit by becoming a useful feeder service into the network, or about the east-west freight line, which is so important in increasing freight usage and using existing rail tracks more efficiently.
Mr Hammond
I am grateful for the hon. Gentleman’s question, which allows me to make an important point. Integration in the railway at the level of timetabling, planning and route network operation is important. The hon. Gentleman will not have had a chance to read the report yet, but Sir Roy makes that point clearly. Those things have to be done on an industry-wide basis; they cannot be fragmented when greater autonomy is devolved to network rail route managers or when train operators are given greater flexibility.
The hon. Gentleman also talks about reopening disused lines. I am afraid to tell him that work on the cost base has a little way to go before that becomes a practical reality. However, as I said earlier, I intend to look carefully at the case for devolving responsibility for commissioning services and the budgets with which to do that for regional and local railways later this year. I would expect decisions to reinstate any currently disused lines to be taken at that level.
Andrew Jones (Harrogate and Knaresborough) (Con)
I congratulate the Secretary of State on this encouraging report. What are the prospects for improved rolling stock on the Leeds-to-York line via Harrogate and Knaresborough? We have rapidly growing numbers of passengers on the route, but the rolling stock is some of the very worst that I have seen in the country.
Mr Hammond
I am grateful to my hon. Friend for his question. As I mentioned earlier, an announcement was made recently about additional rolling stock for services into Leeds. I had it in my mind that that covered the route in question, but he is testing the extreme edges of my memory now, so it would be better for me to write to him with the specific answer to that question.
Katy Clark (North Ayrshire and Arran) (Lab)
Surely the Secretary of State must accept that fragmentation costs more. For example, I understand that Network Rail employs about 600 legal staff to negotiate with the train operating companies, and no doubt each operating company also employs significant numbers of such staff. Surely we should be looking at integration, as it will save us money.
Mr Hammond
The hon. Lady has obviously read the RMT press release from this morning. Of course there are additional frictional costs—interfaces—in the operation of the railway that we currently have, with franchisees and an overall network operator. However, there are also a lot of unnecessary costs that are caused by the adversarial relationship between Network Rail and the train operators. As I said earlier, I do not believe that the answer is some massive revolution that requires primary legislation and will take the rest of this Parliament to deliver. Instead, this is about getting people working together differently. Let us get to a railway that is different from the one that we have now. In the railway that we have now, the brightest and the best people in all train operating companies are the ones who spend their lives allocating responsibility for failure and collecting money from each other. Hundreds of people are literally spending their days trying to decide whether each delayed train is the responsibility of Network Rail or of this or that operator. That is not productive. Getting the industry to work together, looking at industry-wide costs and focusing on solving the problems, rather than allocating blame for them, is the way forward.
Sale of Trust Ports
Lord Hammond of Runnymede Excerpts(12 years, 12 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Transport (Mr Philip Hammond)
I am today launching a consultation on the criteria that the Government consider particularly relevant to the consideration of the appropriateness of sale of a major trust port1 in England or Wales under the Ports Act 1991.
During the consultation period, which will run for six weeks until 27 June 2011, I am seeking the views of interested parties on the following criteria, which I propose to adopt in place of those set out in the written ministerial statement on the sale of trust ports of 25 January 2010, Official Report, column 44WS.
In view of this consultation, I have asked my right hon. Friend the Minister of State to suspend her consideration of the application for a transfer of the port undertaking made by Dover Harbour Board under the Ports Act 1991 until I announce a decision on the proposed criteria.
The Proposed Criteria
The following criteria are those which the Government consider particularly relevant when considering an application under the Ports Act 1991 for the sale of a major trust port in England or Wales. This covers the consideration of any proposal for a transfer scheme submitted under section 9 or 10 of the 1991 Act, together with the exercise of the Secretary of State’s functions in respect of the subsequent sale of the port to which the scheme relates. The Secretary of State also intends to have particular regard to the policy considerations set out below before making a transfer scheme himself under section 12 of the 1991 Act or subsequently approving the sale of a port to which his scheme relates.
Community participation
The Secretary of State will not approve an application for the sale of a trust port under the 1991 Act unless the sale is considered likely to deliver an ongoing and significant level of community participation in the port. Such participation could take a variety of forms, but must include the ability to influence the port’s long-term development and may include the right to receive a share in the profits of the port, or the future increase in its value. It does not necessarily require a community role in the operation of the port.
Future Development of the Port
The Secretary of State will not approve an application unless the sale is considered likely to deliver an ownership model with the capability and access to capital to meet future investment needs.
Fair price
The Secretary of State will not approve an application unless the sale is considered likely to represent good value for money, having regard not only to Exchequer proceeds and market conditions, but also to other benefits including those to the community and the wider economy.
Fair competition
The Secretary of State will not approve an application that is likely to deliver an ownership model which results in unsatisfactory levels of competition in the relevant sector.
Transport networks
It is highly desirable for an application to be likely to deliver an ownership model which will cause the port to be operated so as to contribute to reliable and efficient transport networks.
Sale process
It is highly desirable that the sale should be conducted in such a way as to give all bona fide prospective purchasers a fair and equitable opportunity to participate.
Employee involvement
It is desirable for an application to be likely to deliver port employee participation in the ownership of the port, such as the right to receive equity shares or a share in its future success2.
1For the purposes of the Act, a “major trust port” is a trust port with an annual turnover above a certain limit (currently £7.6 million). In England and Wales this currently includes Dover, Tyne, Milford Haven, Shoreham, Poole, Harwich Haven and the Port of London Authority (though the latter is excluded from provisions on privatisation contained in the Act).
2This is without prejudice to the Ports Act 1991 section 5(3) requirement to have particular regard to the desirability of encouraging the disposal of the whole or a substantial part of the equity share capital of the successor company to managers or other persons employed by the port company etc.