West Coast Main Line

John Leech Excerpts

Monday 17th September 2012 Westminster Hall

[Iain Stewart]

Without wanting to put words in his mouth, I think, from our questioning in Committee of Tim O’Toole of FirstGroup, that he would reflect whatever changes the Government make to the definition of the peak period. The ambition is indeed to try to get a more equitable spread of rail demand across the day so that trains are not packed at certain times while others run comparatively empty. That is a sensible ambition. However, the long-term answer to the hon. Gentleman’s question is a step change in rail capacity, which will come with High Speed 2. In the mean time, the question is how to make best use of the capacity that we have.

[Mr John Leech (Manchester, Withington) (LD)]

I thank my fellow Select Committee member for giving way. I felt that one problem with the questions to Tim O’Toole was that he seemed to argue that First would be able to get people on to those peak-time trains that are under-utilised at the moment with a 15% discount on rail fares. However, that still seems significantly more expensive than the off-peak saver returns or first advance tickets. There is a danger that the ambition to fill those trains will not be realised without increasing the cost of some first advance tickets, so that people cannot get them on off-peak trains.

[Iain Stewart]

I thank my hon. Friend and fellow Select Committee member for that point. There will still be a peak period and an off-peak period. My perspective is that we should be able to manage a more effective distribution. However, Mr O’Toole also made the point that he will not realise his ambition to fill the trains if fares are so high that people will not use them. His ambition is to achieve a modal shift from car and air to train.

--- Later in debate ---

[Derek Twigg (Halton) (Lab)]

I congratulate my hon. Friend the Member for West Lancashire (Rosie Cooper) on securing this unique debate and for the interest that she has taken for many years in transport issues, rail and the west coast line.

I was a bit worried earlier when my hon. Friend the Member for St Helens North (Mr Watts) was criticising the Department for Transport for getting decisions wrong all the time. He mentioned rail. As a former rail Minister, I thought, “Does he mean me?” He has since popped over and said that he did not.

I was rail Minister for 18 months, and it was a fascinating period. We discussed franchising; I am certainly sceptical about it. I had to appear before the Transport Committee, then chaired by Gwyneth Dunwoody, the former Member for Crewe and Nantwich, a formidable individual who is, sadly, no longer with us. We always used to look forward to appearing before her in Committee to answer her questions. It was an experience. I remember asking the officials what franchising adds and what it brought to the party to improve things. I found it difficult to get an answer. The best that they could come up with was that it improves customer service, is more innovative and has brought improvements in service, but their answer was not overwhelming.

We had various problems with franchises. Southern was one that was sort of operated by the Department; now we have East Coast as well. There are alternatives to be considered. Franchising creates many problems, some of which we have heard outlined during this debate.

I welcome the Minister to his new job. I am sure that he will be helpful in answering our questions, and I am sure that he is finding out that the matter is not at all straightforward and has many difficulties and pressures.

I wanted to speak in this debate primarily because I believe that all politics is local. My constituents have contacted me asking me to put forward their views, both on behalf of passengers and because Runcorn station, one of the best-used stations on the west coast main line, is in my constituency, and numerous staff there are my constituents. I worry about their employment and their future. Surprisingly, a lot of people who have contacted me have said that they are disappointed that Virgin lost, because they think Virgin made a difference. Even one long-standing critic of Virgin has come to accept that in the circumstances of franchising Virgin has made a difference, but I will come to that shortly.

The hon. Member for Warrington South (David Mowat) has kept intervening to say that the risk to shareholders and taxpayers is crucial. That has not been made clear at all. Maybe the Minister will make it clear. It is a key issue, because the arrangements must be a good deal for both the fare payer and the taxpayer. We have no idea at the moment whether they are. I am sure that he will want to explore that.

The franchise decision was announced during the summer recess, denying Members of Parliament, many of whom have a close interest in the matter, recourse to questions to the Minister about the ramifications, the process and how the franchise award was arrived at. The decision to award the franchise to FirstGroup has created a lot of concern—I cannot recall a recent franchise award that has been so much criticised—so it is clear that this debate is important.

We are all well aware of the findings of the Transport Committee, chaired by my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), on previous franchise fiscal failures. To dwell on Virgin for a bit, I will not pretend that things have been trouble-free under Virgin—there were certainly a lot of difficulties in the early days—but it had and continues to have fantastic staff, whether at my station at Runcorn, which has won award after award for customer care and service, or on the trains. If I have any criticisms of Virgin, one is that it changed a good thing. Passengers travelling on a line got to know the train crews, and Virgin decided to change them and swap them around the country. A lot of people thought that that added to the drop in service. It was not popular, and it led to a drop in morale.

The prices that Virgin charges for walk-on fares are frankly scandalous; I think that we all know what sort of prices I am talking about. However, it had many innovative ideas about advanced ticketing. Gating along the line could have been done better, as has been discussed in relation to the franchise. Parking charges have been a problem. If I had not stepped in to confront Virgin about parking charges at Runcorn, they would be much higher than they are now, adding to the massive parking problems around the station faced by my constituents.

To return to the franchise, the Department for Transport still has questions to be answered regarding its failure on the relative bid risk assessment; FirstGroup’s bid posed a risk not properly mitigated through adequate risk insurance. My hon. Friend the Member for West Lancashire has asked many questions that are in the public domain, so I will not repeat them. The Minister has heard them, and I hope that he will answer them.

[Mr Leech]

Does the hon. Gentleman agree that as part of that risk, FirstGroup should have to risk losing all its other franchises if it is unable to deliver this one?

[Derek Twigg]

We would have to explore the consequences to the rest of the rail users on the system, but it should certainly be explored.

I return to a key issue that several hon. Members have pointed out. A cloud of controversy has surrounded the back-loading of the premium payments to the Government in the final few years of the franchise, whereas Virgin pledged more cumulative premiums to the Government for the first nine years of the franchise. I know the west coast line well, not just from travelling it but from my experiences as the rail Minister, and there were major problems on the west coast line during the early 2000s, for various reasons. At one stage, it was almost in a state of collapse, and the train services provided were pretty awful. Income dropped massively during those early years, for obvious reasons: people were not using the service. Because of the problems, they were using alternative transport such as cars, planes and so on. Income jumped in 2004 or 2005, and the timetable came out and so on. As the Minister will be aware, in 2009, a new timetable was introduced with weekend running and faster trains, which I mentioned. Did the bid take account of, or did Ministers ask questions about, that unusual situation at the beginning at the 2000s and its impact on longer-term predictions of income?

I assume that High Speed 2 will have a major impact on Euston, unless the Minister can tell me something different. Has any care been taken about that and the possible impact on the west coast?

The other question for the Minister relates to the GDP forecast on which the bids were based. Will the Minister confirm whether the bidders went along with the Government’s forecasts—a major failing in recent years—or a lower forecast? That will have an important impact on the bids. Projections are guess work, but I am not sure—we have not seen all the details, because we keep being told that they are confidential—whether the details actually add up. There is no doubt that the line has the potential for a great amount of growth. A point was made earlier about capacity and future investment. I am slightly sceptical about High Speed 2, because it has the potential to have an impact on necessary investment in the west coast main line.