That this House has considered the Fourth Report of the Transport Committee, Rail infrastructure investment, HC 582, and the Government response, HC 1557.
I am delighted to lead this debate on the Transport Committee’s Fourth Report of this Session, on rail infrastructure investment. I will start the debate as we started our report, by underlining the importance of the UK’s railways. They are a vital part of our national transport network and make a substantial contribution to the economy. Their importance has been recognised by successive Governments of all parties, with billions of pounds invested in rail every year. The importance of our railways is not in question.
However, there are serious challenges for both rail passengers and the industry. While 1.7 billion journeys were made by rail in 2018, it was not an easy year for passengers, who faced disruption and disappointment. Planned improvements—including electrification in south Wales, the midlands and Cumbria, and the opening of Crossrail—have not been delivered, while May’s timetable changes caused unprecedented chaos across the network. This year started with more unwelcome news for rail commuters, with fares increasing by an average of 3.1%.
We must work towards improving services for rail passengers and freight customers. Investment in the network is essential for enabling better services, which in turn provide new opportunities for our constituents and support the development of our towns and cities. That was the focus of our report, and today I will look at three of the main issues it raised.
First, we need to ensure that rail investment and its benefits are shared equally across the country. It is clear that many feel that rail investment is unfairly centralised in a small number of areas, and the Department for Transport has done little to respond to those concerns. Secondly, there are serious questions about what future improvements the Government’s new approach to funding rail enhancements will deliver. To date, more than a year after the new system was put in place, there is a total absence of information about what proposals are even being considered. Thirdly, there remain questions about the future role that electrification will play in improving the UK’s rail network, following the cancellation of the electrification of the midland main line north of Kettering to Nottingham and Sheffield, the Great Western main line to Swansea and Cardiff and the lakes line between Oxenholme and Windermere.
There is long-standing dissatisfaction about the level of investment in the rail network in different regions, and our report looked in detail at the disparity in investment across the country. We considered the issue in the context of the Government’s stated intention to rebalance the economy away from London, exemplified by the northern powerhouse and the midlands engine. From 2012 to 2017, the north-east, the east midlands, the south-west and Wales all received less than 10% of the level of rail investment that went to London. Only the north-west, the south-east and Scotland received even a fifth of the level of rail investment in our capital.
The capital’s size and population mean that it is unsurprising that more is spent in London, in absolute terms, than in other regions. However, there is also a substantial disparity between spending per capita in London, at £773 a head in 2016-17, and other regions, with a low of just £70 per head in my own region, the east midlands. The Institute for Public Policy Research North analysed the Government’s planned transport spending, as set out in the Government’s 2016 “National Infrastructure and Construction Pipeline”, stating that it showed problems not only in the past but in the future and
“a stark gap between London and the rest of the country”,
with £1,900 per capita spending planned in London from 2017 onwards, compared with £400 in the north.
The sense of unfairness felt by many regions across the country has been exacerbated by continued investment in major developments that primarily benefit London. It is hardly surprising that there was real anger when, four days after the cancellation of those electrification schemes, the Secretary of State and the Mayor of London jointly announced an agreement in principle to fund Crossrail 2 at an estimated cost of £30 billion.
The Government have tried to rebut the figures about the regional disparity of investment in our railway. Their response to our report said that
“the planned spending per head figure is within 33% of the national average for all nine English regions. Moreover, the overall figure for the three Northern regions (North West, North East, Yorkshire and Humber) is £1,039 per head, compared to £1,076 per head for the Middle regions (East of England, East Midlands and West Midlands) and £1,029 per head for the Southern regions (London, South East and South West).”
However, those figures are based on a selective analysis. By aggregating regions, variations in the midlands, the north and the south are masked. For example, Yorkshire and the Humber received just £729 per head, the north-east £822 per head and the south-west £851 per head.
As usual, my hon. Friend makes a powerful case for the report that her Committee has produced. She just referenced the funding for Yorkshire and the Humber. The Department for Transport seems to put its head in the sand whenever it is challenged on these regional disparities. Given that the new Rail Minister is a Yorkshire MP, does she think that we might now see a recognition that the north has not had its fair share, and that we will now start to get our fair share?
My hon. Friend has been an outstanding advocate for the north and its need for rail investment. The Minister is a newish Rail Minister, but I know that he previously served in the Department for Transport. We had discussions in the past, when he was the Minister responsible for buses, and I always found him genuinely prepared to listen. I hope that he brings the same approach to his new role.
In January 2018 IPPR North assessed the Government’s analysis of regional spending and stated that it excluded spending in the pipeline for after 2020-21, meaning that the analysis omitted some £42.5 billion of planned investment, 40% of which—£19.8 billion—is earmarked for London. The Government have therefore presented, even if accurate, a rather skewed picture of how planned transport spending will be distributed across the country in the coming years.
My hon. Friend is doing an excellent job of presenting our Committee’s report and explaining how the Government tried to fiddle the figures to obscure the fact that London is getting about 80% of the funding. Does she agree that this will not be rectified and made fair until the methodology for deciding on investment schemes is changed? It massively over-weights time saved, which always pushes investment towards densely populated cities such as London, rather than Newcastle, Manchester, Leeds or the other regional cities.
My hon. Friend makes an important point, which I will come to in due course. He is a long-standing, experienced and expert member of the Transport Committee, and I am delighted that he is here this afternoon.
The DFT also argues that it is difficult to break down regional spending accurately, saying that where expenditure on the railway takes place is not always an accurate reflection of where the benefits are felt. The Department also emphasises the difficulty of analysing investment annually, or even five-yearly, given that railway assets typically have a lifespan of 25 to 40 years, pointing out that there was inevitably
“a cyclical nature to replacing them that does not lend itself to an even split of funding across all regions within every 5 year control period.”
Of course, there is merit in those arguments, but I simply ask the Minister, when was there a time when investment in the north exceeded investment in the south?
While the Government’s commitment to rebalancing the economy is welcome, it is clear from past experience that, as my hon. Friend the Member for Blackley and Broughton (Graham Stringer) said, current methods for making investment decisions make it much easier for highly populated, economically successful places to prove the case for schemes in their area, because the model has a bias towards schemes that exhibit strong levels of potential demand and/or high potential to relieve existing transport congestion. Witnesses to the inquiry told us that this approach inevitably drew more investment to London and unless the system could be altered to take greater account of wider economic benefits, the process would be inexorable.
Maria Machancoses, the director of Midlands Connect, told us that
“figures on the disparity of investment, no matter which formula you look at—whether by the DFT or the Treasury—they all say that outside London it is just not working.”
I congratulate the hon. Lady, my friend, the Chair of the Select Committee, on securing the debate. She took us through our Select Committee report and chaired us so well. The Government rightly place great faith in the future in hybrid trains and bi-mode, but does she share my concern that we are in a bit of a hiatus? We either have electrification or technology that is not quite there. Many communities—mine in particular, with the extension of HS1—are faced with uncertainty as to whether they will ever get a better service.
The hon. Gentleman is a very valued member of the Select Committee. While new traction, hydrogen and battery potentially have a place on our railway, it is clear that they are not sufficiently developed to be a proper replacement for electrification. There is some doubt about whether they will ever be a suitable replacement for electric trains, particularly on inter-city journeys operating at higher speeds. He is right to raise concerns about the time that might be taken for parts of the country to see improvements to their services, particularly if there is a continued aspiration to use bi-mode technology. While that can provide some benefits, it undoubtedly also has a significant impact on operating costs. When passengers are very concerned about their fares raising, building in long-term costs seems a wise approach.
While it is now clear that the electrification schemes that had been planned were undeliverable, the Railway Industry Association and others were convinced that, for now, electrification remained the optimal solution to train traction. The case for electrification is particularly strong on heavily used routes, balancing significant benefits to passengers with the wider environmental benefits and long-term cost efficiency. Our report called for electrification to be delivered through a long-term rolling programme in which the Department, Network Rail and the wider industry learn the lessons of earlier schemes and strive to reduce costs. Do not throw the baby out with the bath water.
A key driver of Government investment in the rail network is their commitment to reduce carbon emissions. In February 2018, the Government called on the industry to produce a vision for how it will decarbonise with an initial response due in September last year. The Government response to our report confirmed that an industry taskforce, led by Malcolm Brown, is taking this forward. Have the Government received this taskforce’s report on how to decarbonise the rail system? If so, what does it say and what are the Government doing with it? David Clarke, technical director of the Railway Industry Association, has said that to achieve the Government’s aim of decarbonising UK railways by 2040,
I echo the earlier comments of my colleague on the Transport Committee, the hon. Member for Bexhill and Battle (Huw Merriman), about my hon. Friend’s skill in presenting her arguments and chairing the Committee. Does she share my concerns about the market-led proposals? In my part of the world, we have had some major proposals for east west rail, which has been promoted by the National Infrastructure Commission, but there is considerable confusion about whether that railway will be privately run, as the Secretary of State has suggested, or whether there is a plan B. I am not convinced that there is and I am interested in my hon. Friend’s views on that.
It is wonderful to see so many members of the Select Committee here. My hon. Friend raises an important point about what will happen if market-led proposals do not provide the opportunities that the Department hopes. I will touch on that in a moment.
In November, the Government said that they had received 30 responses to their call for ideas for market-led proposals to enhance the railway, but that they could not make an announcement about individual schemes because the proposals had been submitted in confidence. How have those market-led proposals progressed since November, and do the Government expect any of them to be delivered, including the one referred to by my hon. Friend the Member for Cambridge (Daniel Zeichner)?
There was significant support for moving enhancements planning away from the control period process, and we support the intention behind the rail network enhancements pipeline, which should ensure that the planning mistakes made over the past five years are not repeated. However, we also found a substantial risk that the rush to deliver poorly planned and scoped schemes in the current period could be replaced by a different problem—a slowdown or interregnum in new enhancement projects.
That is why we called on the Government to provide a clear set of strategic priorities for rail infrastructure investment in each region, and to outline the specific projects likely to be available for third-party investment. The Government refused to set priorities for each region, so I ask the Minister today to set out the Government’s priorities for rail enhancements over the next five years.
We were also concerned that the process outlined by the Government did not provide the reassurance and certainty on future investment that the rail industry is looking for. We said that more transparency about the enhancements pipeline and decision-making processes in the Department was needed. That is particularly true if the potential for a substantial increase in third-party investment is to be realised. The Government accepted that recommendation and said that they are
My hon. Friend is being very generous in giving way as she draws to her conclusion. She has already mentioned the fact that it took four months from the decision to cancel the electrification to a written statement to the House on the last day before the summer recess. The previous Secretary of State, the right hon. Member for Derbyshire Dales (Sir Patrick McLoughlin), assured the Committee that there would be no change in the investment plans when the Office for National Statistics had changed the designation of Network Rail’s public status so that it became part of the public expenditure. However, that has driven many of the cuts in the future investment programme.
Does my hon. Friend agree that the Government have not only failed to respond positively to our recommendations but failed to play a straight bat, in not presenting information to the Committee that would have enabled us to carry through properly our job of scrutinising the Department?
My hon. Friend makes a very important point. I do not know whether the previous Secretary of State was really unaware of the implications of that change, but certainly our experience as a Committee is that we have not always had the candour that we would have wanted from the Department. That is disappointing when we are simply trying to do the job of scrutiny that this Committee was appointed to undertake on behalf of Parliament.
As I have said, we welcome much about the Government’s approach to investment in the rail network. There is no argument about the importance of investment or about the fact that the Government are investing significant sums, but the issue is how they have gone about investing and how they ensure that that investment provides good value for money and strategic thought about the long term.
We agree with the increased focus on renewals and we agree that decisions about railway enhancements should be taken out of the five-yearly control period process. However, there are still outstanding questions that were not addressed in the Government’s response to our report. How will the Government meet their commitment to rebalancing the economy when it comes to investment in rail? How do they plan to decarbonise the railway network if they have completely ruled out electrification? What future enhancements to the railway network will emerge from the new rail network enhancements pipeline? I look forward to the Minister’s update on all those points.
It is a pleasure to serve under your chairmanship this afternoon, Mr Evans. Out of courtesy, I must apologise to hon. Members in advance just in case—I emphasise “in case”—I need to leave before the conclusion of the debate, due to another commitment. I pay tribute to the Chair of the Transport Committee, the hon. Member for Nottingham South (Lilian Greenwood), for the case that she has just put, and to all other members of the Committee for their work on “Rail infrastructure investment”. I have a copy of the report and have looked at it, and it is fair to say that it covers a wide range of issues, which the hon. Lady spoke about in her very good and detailed speech.
As the Minister will know, rail infrastructure is incredibly important, not only to my constituents in Witham but to the entire east of England region. I will start by paying tribute to him, because he has recently become the Rail Minister. I had the privilege of working with him previously, in his other incarnation in the Department for Transport, so it is great to see him back there. I thank him and his officials for giving me some time recently, to discuss not only some of the issues that I will raise today, but some of my concerns, as well as the developments that are taking place on the Great Eastern main line and some of the big investment opportunities that we would like to see for the region.
The Minister will know from our recent discussions about the work of the Great Eastern main line taskforce, which I currently chair and which is putting forward the case for strategic investment in rail infrastructure. Back in 2014 we submitted to the Government a business case for a package of investments—I have it here: “exhibit A”—which I have no doubt the Minister is fully versed in, because I know he has seen copies of it. This business case from 2014 discussed the potential to deliver over £4 billion of gross value added to the economy, to support thousands of new jobs, and to help meet the transport needs of the population and housing growth in the region.
The right hon. Lady is making an excellent contribution on behalf of the east of England. I wonder whether she agrees that there are significant possibilities for bringing forward digitalisation of the railways. I am told that a huge amount could be done through digitalisation to better address capacity constraints, and that a relatively modest investment in global terms could be transformational in the east. My concern is that, looking ahead over these very long periods, we may well find that technology has moved much more quickly and we have not taken best advantage of those technological changes. Does the right hon. Lady share that concern?
The hon. Gentleman is absolutely right. I was planning to touch on the significance of digital railway. I mentioned efficiency, and the whole point is how we can use new technology to drive efficiency. Everything is part of a process, and new technology can trump things that have previously gone on. There are also new opportunities for digital signalling. For example, on the Great Eastern main line we are working with the Department for Transport and the Minister to continue to make the case for digital signalling, and part of the case that the GEML taskforce is putting forward is compelling. I know that the Minister is looking forward to receiving the business case that we are currently working on. In previous discussions and meetings he has heard me speak about the pipeline business case that we are working on, and how we will build on the 2014 business case and enhance the numbers, the financials and the key programmes that we should be putting in place. We will revise that business case based on the latest figures for growth, the economy and business, and we will demonstrate that investing in rail in the east of England will help the Government to reach their ambitious targets, not just for housing but for economic growth and regeneration.
Those projects are going to be vast. They will include the introduction of a passing loop in the vicinity of Witham town, right through the heart of the Witham constituency; the redoubling of Haughley junction; improvements to the Trowse swing bridge; re-signalling south of Chelmsford; and improvements to Liverpool Street station. Combined, those investments will increase capacity on the network and—importantly for rail users in my constituency—reduce delays. Through the new franchise to 2025, we will benefit from a new fleet of rolling stock, and the first of those trains are due to enter service very soon. We want to make sure that when they come in we do not have disruption and can get the benefits of efficiencies. Over £1 billion of new investment has been secured following the recommendations of the GEML taskforce, which were actioned by the Government. Of course, we want that infrastructure to complement new trains and maximise the benefits, as well as include those key infrastructure projects.
It is a pleasure to serve under your chairmanship, Mr Evans. I am a new member of the Select Committee on Transport, and did not serve on that Committee while this inquiry was under way; nevertheless, it raises a number of points that I want to speak about. I am also pleased to have been able to join the Transport Committee, particularly under the chairmanship of my hon. Friend the Member for Nottingham South (Lilian Greenwood). I have found her to be supportive, enthusiastic and knowledgeable, and she has made me feel welcome in that Committee in the few weeks that I have been a member, as have the Committee’s other members.
Many people in this country are dependent on rail services, and when there are problems, our constituents really tell us about them. Rail travel is essential for those who are unable to drive or do not own a car for whatever reason, and for people such as me who are dependent on rail for their commute to work and for whom there is no alternative, especially when car commuting would take much longer or be too costly. Since the advent of mobile technology, the train journey means more productive working time for those required to travel long distances, or even for me on my half-hour rail commute, than driving does. One can also use the journey as an opportunity to catch up on sleep—another option that is not available when one is driving. Then, there are tourists: UK and overseas residents letting the train take the strain. For all those people and many more, good train services really matter.
It is not just about the quality of services; it is about price. The real cost of rail travel continues to rise year on year. The real cost of driving has flatlined or even fallen, but UK commuters are paying about 17% of their average wage for their season ticket—by far the highest in Europe—and the cost of rail travel continues to rise.
Rail services that are reliable, convenient, fast over long distances, affordable, comfortable and safe benefit not only passengers but the places they link up, providing more business investment, more residents—particularly in areas of declining population—and, in many places, more tourist spend.
I am grateful to my hon. Friend, as a London-based MP, for her support for a sane, sensible and fair regional policy. Does she agree that not only is the unfairness a factor, but that repeated investment in London to solve transport problems is counterproductive? Investment in transport has an economic effect: it creates more jobs, more people and more pressure on housing. Investing in that way is therefore effectively investing in future congestion.
I absolutely agree. That is the other side of the coin, and it can be addressed only by a proper, serious regional policy. Since 2010, the Government have moved far away from the regional policies that we had, completely decimating the regional economic development boards, and so forth.
The only nod to a regional policy that we have had in recent years is the northern powerhouse. I have heard again and again what a token gesture the northern powerhouse has been. Even the original promises have gradually been whittled away. We have nothing more than tokenism on regional policy in this country at the moment. As the Transport Committee Chair said in the report, regional transport authorities say that
“systems of scheme appraisal currently work against regions”.
In a sense, the state is exacerbating the natural pressure that always occurs without any sort of state intervention.
Market-led proposals are inadequate to deliver new projects—we see that failure around Heathrow airport. The roads around Heathrow airport, and I do not just mean in west London, but across the Thames valley, Buckinghamshire, from Surrey almost to Hertfordshire, and in the whole sub-region surrounding Heathrow airport, have some of the worst traffic in the world. The roads are dangerously overcrowded, with levels of pollution that are illegal, because we increasingly recognise air pollution as a serious health hazard. It is an economic brake on not only businesses that service Heathrow airport but the wider west London and Thames valley region. Unnecessary congestion helps no one.
In 2001, the planning inspector for the Heathrow terminal 5 inquiry said that additional rail capacity was needed. Subsequently, in the run-up to the investigation into whether there was a justification for runway 3 at Heathrow, the national policy statement said that expansion would require 50% of passengers to use public transport by 2030, rising to 55% by 2040, and 25% fewer staff car trips to work by 2030, rising to 50% fewer by 2040.
20 of 76 shown
Her view was that this should be the starting point from which to “move forward.” However, in their response to our report, the Government did not accept the suggestion that their scheme appraisal methods did not provide a fair share of investment in rail across the UK’s regions. This completely fails to acknowledge the overwhelming feeling across the country that investment in rail is unfairly concentrated in a few small areas.
While there are undeniable complexities in accurately breaking down regional spending and identifying where the benefits of investment are felt, the Government must recognise the concerns that have been raised about the regional disparities of investment in our rail network and take action to address them. It is hard to believe that the Department will do so if it does not accept that there is a problem in the first place.
The DFT has published a rebalancing toolkit, to be used as part of the strategic assessment of future investment programmes. This was welcomed in principle by our witnesses. However, when we asked the then Rail Minister, the hon. Member for Blackpool North and Cleveleys (Paul Maynard), for examples of the toolkit’s influence on DFT’s transport investment decisions, he could not provide a single specific example. He told us that it was “relatively early days” for the approach. Our witnesses said that the Government needed to prove that what the rebalancing toolkit is meant to achieve will actually take place. I ask the Minister, over a year after the toolkit was introduced, how has it influenced the DFT’s investment decisions?
In our report, we also called on the Government to be more specific about the economic rebalancing effects they intend to achieve. We call on them to tell the regions in need of regeneration how they can prove their cases and secure investment. We argued that people in the north-east and south-west, regions that have experienced relative under-investment in recent periods, must have a clear sense of what the Government are trying to achieve in order to be able to judge their success.
We also recommended that use of the rebalancing toolkit be mandatory and that the Department worked with Her Majesty’s Treasury to explore how economic rebalancing can be made an intrinsic part of appraising transport schemes. That would put rebalancing at the heart of investment decisions, rather than it merely being an add-on. In response, the Government have told us that it would be impractical to make use of the toolkit mandatory. Why has the Department developed a toolkit that is impractical to use?
Let me turn to rail electrification. Under successive Governments since 2009, the Department has made a compelling case for widespread electrification, moving from diesel to electric traction, particularly on heavily used parts of the network, which would reduce journey times and facilitate lighter, more efficient trains, reducing long-term costs, improving environmental sustainability and enhancing capacity. The Government’s decision to cancel electrification schemes in south Wales, the midlands and the Lake district were a huge disappointment for people who had been promised improvements to their network. Following the cancellation of these schemes, there are also serious questions about the Government’s support for future electrification of the network.
It is clear that the plans for electrification were over-ambitious and suffered from inadequate planning and budgeting. The schemes were hampered by an unclear definition of responsibilities between the DFT, Network Rail and the Office of Rail and Road, and disappointment at their cancellation was compounded by poor communication by the Department for Transport.
Although the decision to cancel the midland main line and the lakes line schemes was taken in March 2017, it was not announced until July, on the day the House rose for its summer recess, limiting opportunities for scrutiny of the decision. The Government also presented the decision not to electrify these lines as a positive story about passenger benefits being delivered in other ways. The announcement, unsurprisingly, was met with scepticism by those who saw it as a pragmatic, cost-based response to overruns. The National Audit Office agreed with those sceptics, and concluded:
“The Department decided to cancel projects in 2017 because Network Rail’s 2014-2019 investment portfolio was no longer affordable.”
Passengers on the midland main line and Great Western main line should eventually see some improvements in capacity and journey time from other enhancements in control period 5, but the way that enhancement to these lines has been handled is far from ideal and has done nothing to create confidence in the Government’s approach to rail improvements.
“electrification must be one of the prime options for intensively used routes”.
The Government accepted our recommendation that it should engage with RIA’s electrification cost challenge initiative. The Department committed to producing a report on cost-effective electrification by this summer, but has said that it will remain agnostic about the best means of securing rail enhancement and that it does not expect proposals for new enhancement to begin with a predefined solution such as electrification. I am afraid it is clear that the Government have no plans for the future electrification of the railways.
I ask the Minister to update us on the Government’s work to produce a report with the industry on cost-effective electrification. When we conducted our inquiry, we heard that there was considerable interest in third-party-funded electrification schemes on the midland main line. We recommended that those proposals should be fully considered as an alternative to the proposed bi-mode solution.
The Government accepted our recommendation and said that they would fully consider
“Any proposals made to government or Network Rail about private sector solutions on the Midland Mainline that could provide benefits in addition to the passenger benefits that are being secured by the Government.”
What discussions have the Government had with third parties about proposals for electrifying the midland main line, and how will the improvements for passengers of the enhancements that will be going ahead compare with the improvements that would be delivered by electrification?
Some hon. Members present represent areas of the north covered by the transpennine route. The upgrade of that route is expected to include some electrification, but those enhancements have been considerably reduced since the then Chancellor announced in 2016 that the Government were
“giving the green light to High Speed 3 between Manchester and Leeds”.—[Official Report, 16 March 2016; Vol. 607, c. 961.]
There are serious concerns that the upgrade will not be fit for purpose for freight trains, and that because only part of the line will be electrified, the route will need bi-mode trains, which will build in higher operating costs for years to come. Are the current proposals for the transpennine route upgrade in line with the advice from Transport for the North? If not, why not? I note the letter to the Secretary of State for Transport from the operator of Humber, Mersey and Tees ports on 7 January, which says:
“It is of increasing concern that the Department for Transport and Network Rail are undervaluing our industry in the North and undermining the economic goal and objectives of the Northern Powerhouse; it will only make the productivity gap between the North and South of England even greater and devalues further the role of Transport for the North.”
It is concerning when the industry feels that the transpennine route upgrade, as it is currently considered, will lead
“to an utter dependence upon the M62 for Transpennine freight traffic for at least another generation.”
We have talked about some of the problems experienced as a result of planned railway improvements in the past five years, which have triggered successive reviews of the planning and delivery of enhancements and led to a substantial change in the way future investment in the railways will be considered and delivered. The next five-year control period will focus on operations, maintenance and renewals, the volume of which will increase substantially, not least because of the number of renewals that have been postponed from the current control period.
Following those postponements, the greater focus on maintenance and renewals in control period 6, which starts in April, is necessary and welcome, but there are long-standing concerns in the industry that investment in renewals has been lumpy, stop-start and boom and bust. We have heard that the level of uncertainty about upcoming spending could have knock-on effects on the wider industry’s confidence to invest in its workforce, skills and innovation.
In our report, we called on the Government to work with Network Rail, the regulator and the industry to look at the ways in which investment could be smoothed out from the start of control period 6, throughout that period and beyond. The Government accepted that recommendation, so I ask the Minister, how has the Department worked with the industry to smooth out investment for the upcoming control period?
Instead of forming part of the five-year control periods for Network Rail investment, future enhancements of the rail network are now subject to a separate process. The new rail network enhancements pipeline is intended to support a continuous planning approach and move away from the overly rigid five-year cycle that was linked to railway control periods.
The Government have signalled that they expect more railway enhancements to be market-led proposals brought forward by third parties. We heard that there was likely to be interest from third parties in bringing forward such proposals, but it was not clear to us that Network Rail had the structures or culture in place to support such third parties to engage and participate in the planning, delivery, funding or financing of the railway.
“committed to transparent policy making and intend to make clear public statements”
as investment decisions are taken at each stage of the pipeline. So far, however, we have seen no such statements.
The Railway Industry Association has said:
“The visibility of enhancements remains a major concern for rail suppliers. There is now a lack of an obvious enhancements pipeline, with no construction-ready schemes in the Rail Network Enhancements Pipeline…published in 2018.”
Last week, I asked the Department how many rail enhancement schemes were being considered as part of the rail network enhancements pipeline, and what stage each proposal was at. Again, the Minister told me that the Government
“are committed to transparent policy making”,
but failed to answer any points of my question. That means that, almost a year after it was set up, the Department has yet to reveal a single proposal being considered as part of the pipeline. We are none the wiser about what, if any, future enhancements the Department is considering, let alone planning.
In response to my question, the Minister also said:
“Network Rail…will continue to provide public updates on the progress of enhancements in the portfolio”,
but it is not clear at what stage of the pipeline proposals will enter the portfolio. Can the Minister confirm at what stage enhancements will be included in Network Rail’s enhancements delivery plan? It seems to me that it is only those that have reached the delivery section of the pipeline that will be exposed in that way, and we will not know what is in the development and design parts. Will there be any transparency of proposals before the decision to deliver them?
Although the Government have accepted a number of our recommendations, as I have outlined, their response to our report was disappointing in several regards. It seemed to show an unwillingness to engage with some of our key conclusions and recommendations.
The Association for Consultancy and Engineering agreed with our assessment of the Government’s response, telling us that the Government had
“failed to meaningfully engage with the expertise provided by industry, and the practical recommendations outlined in the report”.
It told us:
“As evidence givers, it was disheartening for ACE to see the DfT and the ORR”—
that is, the Office of Rail and Road—
“pay such little attention to the solutions proposed by the committee, including dismissing some of them outright.”
I have asked the Minister to respond today on some of the points where we felt that the Government’s response to our report was less than satisfactory. I hope that he will take the opportunity to expand on the Government’s response, for the benefit of both this House and those in the rail industry who were as frustrated as we were by the Government’s response.
To conclude, although our report welcomed much about the Government’s—
Of course, this business case was put together in 2014 by all the Members of Parliament from Essex, Suffolk and Norfolk. It received a great deal of Government interest and time, with interest shown by the former Chancellor, the former Prime Minister and various Ministers, including the former Secretary of State for Transport, my right hon. Friend the Member for Derbyshire Dales (Sir Patrick McLoughlin).
As we have seen in the east of England, and are still seeing, there is so much opportunity for economic growth in our area, with lower housing costs than in other areas. We are on a commuter line and we are accommodating a greater number of commuters and families who travel to London, and not only in Essex but across the eastern region. We are very proud of that. Families choose to enjoy the enormous benefits of living in the villages of my constituency and elsewhere in the region, while being able to work in London as well. I have to say that that is because of the Government’s wider investment in other sectors, including education—we have some amazing schools now—and quality of life is obviously a key feature too.
Of course, Essex and the east of England are fast-growing parts of the country, and they are strategically placed to deliver new jobs and economic growth. Look at what we have going on. We have world-leading businesses and centres of innovation: the Essex knowledge gateway, the University of East Anglia, Essex University and Cambridge University. They are all great hubs of intellect, innovation, jobs, economic growth and entrepreneurship. We have a diverse range of businesses, such as financial services, logistics, manufacturing, construction, modern bio-tech and science. We also have key international transport hubs, as my hon. Friend the Minister is well aware, including the key ports in London Gateway, Tilbury, Harwich and Felixstowe, and our airports at Stansted and Southend.
In Essex we have great business voices, which were instrumental in making the case for investment in our rail back in 2014. They include the Essex chamber of commerce, which made the business case, outlined the GVA of rail investment, combined the numbers and showed the economic growth that we can deliver outside London, and the new opportunities that will come our way. The Essex economy is already touching £40 billion in GVA, and obviously since 2010 the number of entrepreneurs has risen and we see business growth getting stronger and stronger. I see how much our businesses are already doing, and the jobs and prosperity they create. I am incredibly proud to see the enterprising spirit they have shown. Like me, they look forward to a future in which we can continue to build upon their contributions. They have a positive outlook for the future, not only for Essex but for the whole region.
We know that one of the key factors for growth is strategic investment in our roads and, in particular, our rail, so that we continue to grow and secure long-term investment. Of course, such investment means work on key roads and economic corridors, such as the A12 widening scheme and the dualling of the A120, but it also means investing in our rail network. Our rail network across the east of England has suffered from severe under-investment for many years. The Chair of the Transport Committee made some very important points today. She spoke about regional disparity with regard to the north of England, but of course my taskforce in the east of England has demonstrated that even notional calculations of regional finance mask regional disparities. Commuters on the Great Eastern main line, and particularly Greater Anglia commuters, are net contributors to the Treasury through their rail fares. Of course we want to see some of that money coming back out.
The Select Committee’s report quite rightly raised the whole issue of rebalancing rail investment to ensure that it is spread across the country, which I have consistently pushed for. I agree that we need to invest more widely and look at ways to support schemes in the regions and economic centres. Of course, our whole economy needs to become much more efficient, and investing in rail infrastructure across the country will help to deliver that.
However, I emphasise to the Minister that although it seems on paper that investment has been skewed towards London, partly because of the high cost of Crossrail, it is also important that we see a rebalancing exercise that does not come at the expense of excluding investment opportunities that would deliver high levels of value for money and help to drive billions of pounds back into the whole of the UK economy. Of course, we are set to benefit from approximately £2.2 billion of investment through the control period 6 process, but I stress that that investment is to cover maintenance, operations and renewal.
Paragraph 80 of the excellent report, on page 28, focuses on the historic lumpiness of renewals investment. Investment that covers maintenance, renewals, and so on goes to patch things up, and the graph on page 28 shows that the lumpiness of expenditure goes across the various control periods. We want to ensure a consistent level of investment that covers maintenance, so that we are not simply patching things up. It is a welcome commitment. From our perspective, the new refurbishment —new trains, funds for renewal, and repairs to bridges, embankments and signalling to deal with level crossings—will of course be beneficial. However, that is no substitute for a clear strategy of strategic investments in new infrastructure so that we can have a high-performing railway to support our region. That is the right thing, and it is what our commuters all want.
As the hon. Member for Cambridge (Daniel Zeichner) has said, service improvements on the Great Eastern main line can be delivered through digital railway technology, along with the long-awaited development of Beaulieu Park railway station—Chelmsford parkway, as some call it—with three or four tracks and platforms to facilitate future growth in service opportunities. MPs, councils, businesses and commuters across the region are united behind that vision for rail service across the east of England, and I hope that the Minister and the Department will continue to work with us and back us, working with friends in the Treasury, the Department for Business, Energy and Industrial Strategy and the Ministry of Housing, Communities and Local Government to get that vision fully funded. It is about having an integrated approach across Government to delivering improvement in our rail service and our network, which matters when it comes to wider Government funding.
The Transport Committee’s report comments on the investment process and the enhancement pipeline, which was announced last year and which the hon. Member for Nottingham South spoke about. When the Minister replies, I hope that he will talk about how those schemes can go through that pipeline so that we can be efficient in getting the right kinds of decisions.
I will touch on a few other points very quickly. One—this will also interest the hon. Member for Cambridge—is investing in rail more widely in the region that covers Stansted. Stansted is the third busiest airport by passenger numbers in the country, and the second largest by freight. It has capacity for more flights, and given the capacity issues at Heathrow, we should be encouraging more travel to other airports. Of course, connectivity through the rail link from Stansted to London and further is a major barrier to growth, and our former colleague, the right hon. Sir Alan Haselhurst—now Lord Haselhurst, following his ascension to the other place—is working on proposals to improve connectivity through the West Anglia Taskforce. I commend his work on the issue. We often talk about Crossrail 2 presenting an opportunity for connectivity in that part of the eastern region, and I would like the Minister to provide any updates he can in his concluding remarks.
I thank the Chair of the Transport Committee for the opportunity to speak today off the back of the Committee’s excellent report. I also praise the Minister for his attention to rail, obviously from an east of England point of view. I ask him to bring together all the levers of Government—not just those in his Department—to catalyse funding across other Government Departments in order to unlock economic growth and opportunity across the regions of our country, so that we can use our rail much more strategically. Rail investments have been a catalyst for economic growth.
More people travelling by rail reduces the number of cars on the roads. That then reduces congestion and associated air pollution. Walking or cycling to a station improves a person’s health, and they may be more likely to spend money during that short journey than if they were driving their own private car. Rail improvement, and investment in rail, benefits people and places.
As a London MP, I concur with colleagues’ anger at the disparity between transport infrastructure investment in London and in the other regions of the country. Why does that disparity exist? I accept that the way that the calculations are done exacerbates the inequality, but frankly that is a tool of a lack of policy. The disparity is a reaction to what always happens in mature economies when there is no effective regional economic policy: the inevitable growth of population and jobs in the largest city.
The main justification for investment in Crossrail, and the longer trains and platform extensions in other rail services in and around London, is that it is a reaction to population growth in and around London. Any economist will say that unless a country has an effective, long-term regional policy, there will be an increasing suck of investment and people towards the capital.
Against that, in some outlying areas in further regions—particularly, as a colleague said yesterday in Prime Minister’s questions, in the north-east—there are some ex-colliery towns where houses are lying empty. An effective regional policy would address that imbalance, which disadvantages both types of area.
The lack of regional policy, and continuous sucking into London of people and investment without any rebalancing, means that in the capital housing is overcrowded and prices are exorbitant—way beyond our children’s ability to rent, let alone buy their own homes. Of course, there is also overcrowding in our transport system.
The airport policy statement said that the Government expected Heathrow to meet its public pledge to have “no greater” airport-related road traffic. Of course, since then Heathrow airport has said that it wants to double its amount of cargo traffic, yet it has not provided any explanation. If that is not additional pressure on already dangerously overcrowded motorways down to local roads I do not know what is.
Heathrow airport has made it clear that it will not fund additional rail infrastructure, except for possibly a platform or something. Network Rail says:
“Existing connectivity to Heathrow Airport from the south is currently poor, with most people choosing to drive or get a taxi.”
When we were dealing with the implications of a fifth terminal when I was on Hounslow Council we looked, with a range of economic organisations around Heathrow and local authorities, at a scheme to bring in rail from the south and south-west called Airtrack. Meanwhile, colleagues to the west of Heathrow, particularly in Reading, Slough and so on, were looking at a new western rail extension, with the support of the Department for Transport.
Certainly the link from the west was going well, and was a stage ahead of the southern rail access, but last year or the year before everything ground to a halt as the Department for Transport announced that it wanted to let the private sector lead. As the Transport Committee has said, that has just not delivered. We have had a six-month or a year’s hiatus on the rail infrastructure that is needed in and around Heathrow, yet nothing is happening because the private sector—quite understandably—expects the Government to direct those new roads.
Now, the Government are not going to pay for it, and Heathrow is not going to pay for it. Who is, apart from the businesses and people who depend on a smooth-running road system—and the passengers, of course, who will miss their planes because they are stuck in traffic jams? Before the Minister says, “Oh, stop worrying—we are getting Crossrail and HS2 and so on,” let me remind him that Crossrail and the improvements on the Piccadilly line are to deal with existing transport pressures and the existing population increase in west London and the Thames valley. In terms of runway 3, the modal shift of Heathrow passengers on to existing and imminent transport methods will actually be very small. The Minister will know that if he has looked at the documents that were considered by the Transport Committee in its inquiry on the airports national policy statement. We are in a complete mess with rail investment in and around Heathrow, notwithstanding the fact that expansion at Heathrow —as, again, the Department for Transport’s own reports say—actually damages other regions’ connectivity with international destinations and their businesses and customers.
I want to move on briefly to my concern about the Department for Transport’s interference in transport in London. As anybody knows, and as most other major competitive cities do, a very large conurbation needs to be able to link up public transport, walking and cycling under a single management. I think the Government recognise that. Several Mayors, including the Mayor of the Greater Manchester region and others, have said that there should be greater devolution and control over rail policy, and so has every Mayor of London. But in London, and London alone, the Transport Secretary has openly said that he would block devolution of rail policy purely because he did not want a Labour Mayor to have control over it. He implied that if there were another Conservative Mayor after the first Conservative Mayor of London, he might have considered handing over rail responsibilities, but he was not prepared to do so. That blocking of devolution was so shocking that even the hon. Member for Bromley and Chislehurst (Robert Neill) said that the Transport Secretary was not fit to hold office. We have real concerns that where there are opportunities to use imaginative forms of additional investment in rail in London, that option is currently blocked to London and Londoners, and to London’s economy and that of the wider area.
I have touched on regional policy and the particular situation in London and at Heathrow. In my view, transport policy, of which rail is a part, should be a servant, not a driver, of other policies. I may be going beyond the remit of the report today, but it strikes me that we cannot discuss regional imbalance in rail infrastructure, or whether the decision making is at a local or national level, or whether the cost falls on the private sector investor or the passenger, without addressing the overarching issue of Government investment in the transport infrastructure, and rail in particular.
Is the funding from Government for such an important driver of the national economy and the environment enough, or even comparable with other equivalent economies? I suspect it is not, and I definitely think it is not enough. Are passengers paying too much of the cost of running rail? I believe they are. An efficient, affordable, reliable rail service drives economic growth and regeneration, cuts carbon and pollution emissions and enhances the international image of a country.