Civil Aviation Bill

Debate between Kelvin Hopkins and Tom Harris

Monday 30th January 2012 Commons Chamber

[Mr Harris]

I entirely agree. In 2009, I spoke twice in support of the Government’s plans to build a third runway, and I did so with jobs and the economy in mind, along with the conviction that the Conservative party’s stance at that time was based on cynical electoral calculation rather than any concern for the environment.

I look forward to hearing the contribution of the hon. Member for Spelthorne (Kwasi Kwarteng). I believe that, like me, he supports the third runway—although he might wish to correct that. His predecessor in this House also supported it; he courageously stood against his party’s line, and it is a pity that he chose to retire at the last election—although I am, of course, delighted that the current hon. Member for Spelthorne is now a Member of this House.

The hon. Member for Perth and North Perthshire (Pete Wishart) referred to the sale of British Midland International and the impact on Scottish air services. Those of us who supported—and still support—Heathrow’s third runway pointed out the blindingly obvious fact that a continued squeeze on capacity at Heathrow would inevitably lead to the withdrawal of domestic slots in favour of more profitable international slots. Earlier this month, BAA chief executive Colin Matthews warned:

“Capacity constraints are damaging the UK economy today when the country can least afford it.”

The Conservatives may have won the vote on the third runway, but they have certainly not won the argument.

[Kelvin Hopkins]

May I point out both that our party has also accepted that there will be no third runway at Heathrow and that one way of relieving capacity at Heathrow would be by shifting some medium-haul and short-haul flights to Luton?

[Mr Harris]

My hon. Friend makes a perfectly understandable constituency point, which I am sure will not have gone unnoticed by the Luton Observer, or whatever his local paper is called.

The provision of security is of great concern to all our constituents. The Government’s policy paper that was published at the same time as the Bill in November claimed that the transfer of aviation security regulations functions would save the taxpayer £24.6 million over 10 years. However, it also stated that the CAA would incur costs of £5 million each year, more than double the level of savings to the Department for Transport. Will the Minister explain either in summing up or in Committee why this transfer of powers appears to result in a net annual cost increase of £2.5 million? If that is because we can expect a more secure airport experience, I welcome the move, but if there are to be higher costs but no improvement in security, I will be concerned, particularly if that extra cost is to be passed on to the travelling public, which I understand is the case.

I welcome this Bill, however, and, without wishing to second-guess the great wisdom of the Labour Whips Office, may I say that I look forward to scrutinising it in Committee in the weeks ahead?

Rail Investment

Debate between Kelvin Hopkins and Tom Harris

Thursday 17th February 2011 Westminster Hall

[Kelvin Hopkins]

The hon. Gentleman raises the point that I want to address now. The problem with putting more freight on such routes is that it would be impossible to fund the provision of sufficient gauge. It would be prohibitively expensive to make all the tunnels, bridges, platforms and so on able to take freight. We must have trains these days that are capable of taking full-scale containers—that is W10—and I suggest a scheme that could take full-scale lorry trailers on trains. Hauliers would put their trailers on the trains and they would be taken straight through from Glasgow to Rome, or Rome to Glasgow. I have spoken to the logistics managers of big companies and asked whether they would like to bring their water, wine or whatever from Bordeaux, which is a favourite town of mine, to Birmingham. They say it would be wonderful—fabulous—to send it all the way on the train. What they do now is train it to the coast of the continent and then put it on lorries. That transit would become unnecessary. They could roll a trailer on in Rome or Bordeaux and roll it off in Birmingham or Glasgow.

The problem with trying to upgrade all the existing routes for freight is that there would have to be a through-operation for continental freight trains. They are larger gauge and cannot get through our platforms, because they are wider, or through our tunnels or under our bridges, because they are taller. Certainly we could never have lorry trailers or double stack containers, as we are suggesting. To get serious volumes of freight through, a dedicated freight route is needed, and that is what our scheme is about. As I have said, I have no pecuniary interest in it. I have been passionate about it ever since I heard about it some years ago, and I have spoken on many platforms. I took a team of people to see Geoff Hoon when he was Secretary of State for Transport; they included representatives of supermarkets, Eurotunnel, the rail constructors and AXA—the insurance giant that funds terminals. There were 15 of us. I think that we answered every question put to us adequately. We could not persuade the Secretary of State then, but I hope that the present Government may listen sympathetically, at least.

What I propose could be done very cheaply. We have a precise route, which would involve only 14 miles of new route, nine of which would be in tunnels. The route would, as I have mentioned, use the Woodhead tunnel. The rest would be on existing under-utilised routes and old track bed. Initially we put a cost of £4 billion on it. One of the rail constructors said it could do it for £3 billion. We are now being generous and suggesting £6 billion; but that is still one third of what we propose to spend on Crossrail—which I also support. Nevertheless, our whole scheme, with its 400-mile route, would cost a third of what we are to spend on Crossrail, and would be commercially viable, because of the amount of traffic on it.

[Mr Tom Harris]

Just for the record, and so that we are talking about exactly the same figures, is my hon. Friend aware, when he talks about the scheme costing a third of what Crossrail does, that the Government’s funding of Crossrail is less than £6 billion, and is a third of the total?

[Kelvin Hopkins]

Indeed. I suggest, although I am a public investment person, that the scheme I am describing would attract outside investment. Already, at the meeting with Geoff Hoon, AXA said it would fund the terminals. It already does that. The prospect would be commercially viable. We suggest it would take 5 million lorry loads off the roads.

Finally, the scheme would make a massive difference to carbon emissions. Heavy freight taken by road produces 12 times as much CO₂ per tonne-km or tonne-mile as freight taken by rail. Even lighter freight produces six to eight times the amount. That is a massive carbon saving from rail. Every tonne we put on to rail makes a substantial saving in CO₂ emissions on those 5 million lorry loads a year on a 400-mile route. That would also transform the links between the northern economies and the continent of Europe and breathe new life into the northern, Welsh and Scottish economies. It would not just be about the south-east. At the moment lorries must get through the treacle of the south-east. With a through, dedicated rail freight route we would overcome that problem. It would be of enormous benefit to colleagues who represent northern constituencies. Instead of being peripheral to the core of the European economy they would become part of the central European economy, which would benefit them and the country enormously.

--- Later in debate ---

[Mr Tom Harris (Glasgow South) (Lab)]

I have been involved with the railway industry to a greater or lesser degree for the best part of 20 years now, but I have never suffered the ignominy of going native. When I was the Minister with responsibility for railways—the Minister is welcome to use this joke if she wishes, although most of her audiences will have heard it a number of times from me—I used to joke that although I had succumbed to the lure of the railways and started buying railway magazines regularly, I was always careful to buy a copy of Playboy and put the railway magazine inside it to avoid embarrassment.

There is a healthy turnout of right hon. and hon. Members here. It says something about the lure of the railways that 80% of our constituents do not use them—I expect that it is more than 80% in most constituencies—but the subject attracts and engages Members of Parliament. I suspect that most of us receive more letters a week from our constituents about railways than about motorways or local roads, despite the fact that roads are a vastly more popular mode of transport.

[Kelvin Hopkins]

Are the railways regarded as a national treasure like our forests?

[Mr Harris]

I will refrain from trespassing on the Government’s sadness at this juncture.

Although I do not stand every weekend with a flask of tea, a pair of binoculars and a camera at the end of the platforms at Glasgow Central, I am, if not an enthusiast, a strong supporter of the railway industry. I congratulate the Government, because most of us feared the worst when this shower came in.

In the previous Parliament, the Labour Government did a great deal to invest in the railways to try to improve the services that our constituents rely on. The figures show that we have the largest number of passengers travelling on the railways, apart from during the wartime period, since they began. We also have the best safety record and there are more services running per weekday than at any time in the history of the railways. There was concern upon the arrival of the new Government, whose Ministers seem unable to speak without using expressions such as, “Cleaning up the mess left by the previous Government,” and talking about deficits and so on. We assumed that that would be a simple mechanism and excuse for starving the railways of investment. However, I must say, in all seriousness, that that has not happened, and I am delighted about that.

I am also delighted about the Government’s commitment to High Speed 2, and I regret that my own Government only saw the light on high-speed rail in the latter part of their period in office. That was a mistake, and I accept my own personal responsibility for not pushing it as hard as I could have done when I had the opportunity to do so. I was the Minister who saw through the Crossrail Act 2008, so I am delighted that Crossrail, as well as Thameslink, will be fully funded. There is a lot to celebrate in relation to the railways—there always has been, even at the most difficult times in the network’s history. We have now had two successive Governments who seem to have a genuine commitment to growing the network.

On procurement, my right hon. Friend the Member for Derby South (Margaret Beckett), who is no longer present, mentioned that the manufacturing base of the railway industry in this country is, sadly, significantly smaller than it has ever been. She mentioned Bombardier in particular. I totally understand the pressure that Ministers are under in relation to procurement and an open procurement process throughout the European Union. The Minister will be aware, and she will have been told by her officials, that certain European countries somehow manage to get around the procurement rules and, miraculously, give very large and helpful contracts to their domestic manufacturers rather than to foreign competitors, which is something that Britain has, sadly, never managed to do.

I do not expect the Minister to deviate from her line—I understand the legal ramifications if she were to say that she agrees with me in any respect at all—and I do not even expect her to mention this when she makes her summing-up speech, but she will find very little, or no, opposition from my party if she could find a way of making it easier, within the rules, for British manufacturing companies to be given the same kind of contracts that foreign companies get from their own Governments. If she has that fight with the Treasury, she will have my full backing.

Luton is very well represented on the Transport Committee, and my hon. Friend the Member for Luton North (Kelvin Hopkins) made a point about signalling, which is absolutely crucial. I will not labour the point, because he made it very well, but, given that there is no commitment to building new lines outside HS2, if we are to get more trains more frequently on the existing network, the only way of increasing capacity is to invest in new signalling. When we were in Brussels last week, we heard about the ongoing Galileo project. It is a new satellite system that might, in a couple of hundred years, if it is given an infinite amount of money by every country in the European Union, be able to go into operation. It is the kind of global positioning system that would help provide railways with a satellite navigation system in future, provided that it is accurate enough, which it is not yet. Perhaps Galileo, if it is given an infinite amount of money, might be able to provide that solution.

Value for money is crucial to the railways. My hon. Friend and I are members of the same party, but I hope that he will not object if I say that we come from different parts of it. We have a different view of who owns the railways and whether public or private ownership is the right way. I shall let you conclude for yourself, Mr Owen, which side I fall on and which side my hon. Friend supports. I do not think it matters much whether Network Rail is publicly or privately owned. The fact is that the McNulty review on value for money is absolutely crucial, if we are going to identify ways to cut the costs of the railways.

[Kelvin Hopkins]

McNulty has concluded that our railways cost up to 40% more than continental railways to run. The only major difference between them and us is that they are publicly owned and integrated, while we are privately owned and fragmented. I have made that point to the Secretary of State, who did not strongly disagree.

[Mr Harris]

I am grateful, as always, for my hon. Friend’s intervention, but I disagree with him. Network Rail has had imposed on it an obligation to improve its efficiency and make significant improvements year on year. I do not believe that it is a failing organisation, or that it matters whether it is privately or publicly owned. I am glad, however, that the Secretary of State has thrown out any pretence that Network Rail is a private company, inasmuch as he does not seem to care whether the National Audit Office will, with the stroke of a pen, commit Network Rail’s debt to the public books, which Ministers in the previous Government went to great lengths to avoid. The Secretary of State has taken a more relaxed, and probably more sensible, approach. By the end of this year, Network Rail may well be categorised as a nationalised company. However, if it is not efficient and is not doing the job, does it really matter who owns it? We must get efficiencies back into the railway industry, and we must make sure that the public purse, which is asked to pay a significant amount of the cost of the railway industry, is getting value for money. That is the way to restore people’s trust in the railway industry.

In the run-up to the general election, the Labour Government had a much greater willingness to look at longer franchises. The franchising process itself costs huge amounts of money, not only for the competing companies but for the Department for Transport. The figure of £5 million is often quoted as the cost to the Department, and the longer the franchise, the less often that cost has to be borne. Recently, I had an interesting conversation with an ex-civil servant, who shall not be named. He told me that the reason why seven years was seen as the best period for railway franchises to begin with—from 1995, when the railways were privatised—was that they would start in 1995 and end after the first term of an unpopular Labour Government, at which point, the Conservatives would be able to come back in and look again at the franchise system. But things did not quite work out that way. Seven years is clearly too short a period, and some of the franchises that have been let recently are, for practical reasons, even shorter than that. I hope that we move to a longer franchise period of, perhaps, a standard 10 years, with a two or three-year extension, depending on performance.

I will mention open-access and freight operators in the same breath, because those two users of the network are entirely free of public subsidy of any kind. Open-access operators are, in my view, a good thing. That may not be the view of certain officials in the Department, but we should welcome a private company if it can come in and run a profitable passenger service between two points without seeking any public subsidy, without taking any of the revenue from existing franchises, and without causing any delays to other franchises or to freight operators. I am disappointed that the Wrexham, Shropshire and Marylebone railway finally shut up shop at the end of January, which was a great blow to those people who used it. I say to my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), who chairs the Transport Committee, that open-access operators are of great interest to the wider railway and to the travelling public. I hope that, at some point soon, we will have the opportunity to look at the whole open-access framework in order to think about what makes open access valuable, what makes it work and, crucially, what makes it fail.

My hon. Friend the Member for Liverpool, Riverside has mentioned fares, and I hope that the Minister will address that issue when she speaks. When Lord Adonis was Secretary of State for Transport, he made an instruction to the train operating companies that resulted in a radical change from previous practice. As has already been said, the retail prices index plus 1% fares annual increase was interpreted in a very generous and broad way by the train operating companies. The highest increase had to be RPI plus 1%, but the train operating companies would take a basket of fares. Within that basket, there could be reductions and increases by up to RPI plus 6%. However, Lord Adonis said that all regulated fares must be increased by a maximum of RPI plus 1%. That took away a lot of manoeuvrability and flexibility from train operating companies, who obviously had a vested interest in increasing season tickets and other fares by more than RPI plus 1%. There may well be perfectly valid reasons for moving away from that approach. If possible, will the Minister say something about where we are now and what effect that policy has had during the past 18 months or so?

Innovation does not sound as if it is directly related to priorities for investment, but the issue comes back to value for money. The criticism made by my hon. Friend the Member for Luton North of the privatisation of the railways is entirely valid in the following respect. It is the only privatised industry in which innovation virtually disappeared—from the point of privatisation until now. In almost every other industry that was intrinsically profitable and was therefore privatised, innovation flourished. However, that has not happened in the railway industry. I tried to do something about that when I was the Minister, but there is very little that the Minister and the DFT can do, because it is up to the industry. If there is a level of innovation that can transform the processes within the industry and the passenger experience, that is how we partly move towards a situation in which we develop better value for money for the passenger.

[Kelvin Hopkins]

One of the problems is that the railways are long-term and expensive and private companies have short-term balance sheets. Inevitably, the tendency is to sweat the assets to maximise profit in the short term and leave long-term considerations to others.

[Mr Harris]

That is undoubtedly the case, but I do not accept that that is necessarily an immovable barrier to innovation. Network Rail is the greatest purchaser and procurer in the whole of the industry and it works in the long term. Frankly, many of the manufacturing companies that rely on contracts from Network Rail want to deal in long-term investment and want a long-term reassurance that the work will be there 10 or 20 years down the line. If the will is there, innovation can happen and, as I have said, that is irrespective of whether the industry is privately or publicly owned.

I shall say a few words about High Speed 2. I have long been a supporter of the project, although not on environmental grounds. As Rod Eddington said in his 2006 report, there may well be a case for high speed on capacity grounds, but there is probably not an environmental case. In addition, there is probably not a great case in terms of connectivity, because Britain is a relatively small country and is already pretty well connected. However, there is a case for high speed on capacity grounds. When we get letters and complaints from our constituents, apart from fares, capacity is the burning issue at the moment. It has been for a number of years and will continue to be until we do something serious about capacity. HS2 will relieve capacity on the west coast main line, and I hope that it will do something for freight as well.

I worry about the debate that is developing in this country on HS2 and that supporters of it are dismissing out of hand the concerns of people who live along the line and colleagues who represent communities based along the line. I hope that we can conduct that debate in a more consensual and less provocative manner.