East Coast Main Line

Hugh Bayley Excerpts

Wednesday 5th June 2013 Westminster Hall

[Hugh Bayley (York Central) (Lab)]

I, too, congratulate my hon. Friend the Member for Middlesbrough (Andy McDonald) on securing an important debate.

The headquarters of the east coast main line has been in York ever since the line was built in the 19th century, and hundreds of skilled jobs in my constituency depend on its staying there—jobs at the headquarters and in the Network Rail management of the east coast main line, and hundreds of jobs in private civil, structural, signalling and electrical engineering firms that work for the railways. There have been two private sector-created hiatuses, caused by franchise collapses, on the east coast main line. Now there is a Government-created hiatus—a refranchising. I urge the Minister to make sure that there is stability and that those jobs stay in York.

In February, I asked my right hon. Friend the Minister—I call him my friend because we sat next to each other at the Democratic convention, cheering Obama to the hilt; he is one of us—at Transport questions:

“Before the Government announce their franchising schedule will they look at the feasibility of running a public sector franchise on the east coast for a period to compare like for like with a private franchise on the west coast to resolve the issue”

of whether privatisation works?

He said:

“I am afraid that he is not going to tease out of me in advance what my right hon. Friend the Secretary of State will announce”.—[Official Report, 28 February 2013; Vol. 559, c. 463-4.]

I wish that the Government had given the idea consideration before they announced that they intended to go ahead with franchising, but since they deliberately did not, and told the House they were not going to do so, I ask them to consider the proposition now.

There are three fundamental questions for the Minister. Do the Government want lower fares on the railway, so that the railways become more affordable and passengers get out of their cars and on to trains? Does he want a high return on the public investment that there has been in railways for decades? Does he want ever-improving quality and safety? I am sure that his answer to all three questions would be yes. Has privatisation delivered on those dimensions? On fares: no, it clearly has not. On the return on investment, track charges now being obtained by Network Rail are lower than they were 20 years ago. The East Coast train company is giving the Government a higher return than its predecessor private companies. In round terms, it turns over £650 million a year and gives the Government a profit of £200 million. In the middle of a downturn, for East Coast to provide the Government with a 30% return is doing pretty well, and I do not think the Government should put that in jeopardy.

[Ian Murray]

I congratulate my hon. Friend the Member for Middlesbrough (Andy McDonald) on a wonderful speech. My hon. Friend the Member for York Central (Hugh Bayley) is getting to the crux of the matter. I travel on the east coast line—400 miles, for four hours 20 minutes—about twice a week. Does he agree that if a private operator returned that amount of money to the Government, they would champion it as a great way for the private industry to run the railways?

[Hugh Bayley]

They would, and rightly so but they should also do so for a public sector operator.

I was on the Public Bill Committee—they were called Standing Committees in those days—that considered the Railways Act 1993. We were told that the railways had to be privatised because there would then be masses of new private sector investment in the railways. Sadly, that has not happened. I totted up the investment for the first two years in which the Government were in power: 2010 and 2011. Network Rail invested more than 10 times as much as all the private rail companies put together. It invested £9,739 million and the private sector invested £780 million. In truth, the jury is still out on whether rail privatisation works.

[Mrs Hodgson]

Will my hon. Friend give way?

[Hugh Bayley]

No; I think I will make progress, because I have only a few minutes.

I ask the Minister to consider whether it makes sense to run a private franchise on the west coast main line, which he is obliged to do—Richard Branson will sue him if he does not—and continue, for a full franchise period of 15 years, a public sector operation on the east coast main line, and to compare like for like. Which delivers better value for money to the Government, gives a better service to the public, and does better at reducing fares? I put a final challenge to him: let the Government follow what the passengers want—put out a leaflet on East Coast trains and ask the public whether they want refranchising or to stick with East Coast. If they go for East Coast, give East Coast a whirl.

Several hon. Members rose—

[Dr William McCrea (in the Chair)]

Order. I intend to start the winding-up speeches no later than 3.40 and there are still four hon. Members who have said they want to speak. To allow that to happen I impose a three-minute limit, and hope to get everyone in.

--- Later in debate ---

[The Minister of State, Department for Transport (Mr Simon Burns)]

It is a pleasure to serve under your chairmanship yet again, Dr McCrea.

I congratulate the hon. Member for Middlesbrough (Andy McDonald) on securing the debate. The east coast franchise competition has become a subject of keen interest to many, not only in this room but beyond. The presence of so many hon. Members in the Chamber today to take part in and listen to this debate is a reflection of that keen interest.

The east coast main line serves a huge number of communities and businesses, as a number of hon. Members have made clear, and it connects industries in the north with commerce in the south, provides cross-border services to Scotland and helps to drive the development of tourism and the success of Edinburgh and Leeds as key financial centres outside London. That is why it is at the forefront of our new rail franchising programme, which was announced by my right hon. Friend the Secretary of State in March.

The programme that we announced is the right one. We want to secure the best possible rail services for both passengers and taxpayers, and the programme confirms our belief that franchising is the right way to do so. By publishing the programme, we have provided the whole rail industry with a long-term plan covering every rail franchise for the next eight years. That gives certainty to the market and supports the Government’s major investments in the country’s vital rail network. It is also exactly the same policy that the last Labour Government operated for 13 years when running our railways.

I think it was the hon. Member for Middlesbrough who seemed to be a little confused as to when the noble Lord Adonis made his comments on franchising being the right way, which have been quoted during this debate, so I will help him by saying that they were made in another place and repeated by the right hon. Member for Tooting (Sadiq Khan), who was the senior Transport Minister in the House of Commons at the time, during the debates on having to take the east coast main line into DOR.

[Hugh Bayley]

Will the Minister give way?

[Mr Burns]

I will briefly give way, but I will do so only once because I do not have much time.

[Hugh Bayley]

I am grateful to the Minister. Lord Adonis was saying that we would not want to run the east coast as a public operation indefinitely. No Opposition Member is asking for the east coast to be run as a public sector operation indefinitely; we are asking that it remain with the public sector for a franchise period so that we can compare like with like—public performance against private performance. We will then not have to rely on ideology because we will have some facts.

[Mr Burns]

I will return the compliment the hon. Gentleman gave me earlier by saying that he is on the reasonable wing of the parliamentary Labour party. I have to tell him, though, that Members from the more exotic wing of the Labour party were not saying that in their speeches; they want the east coast main line to be permanently in the public sector, not the private sector.