This is the text of a speech Sir George made in the House of Commons on the railways. In the time available, the Minister sadly was not able to reply to the points about carparking, but Sir George is following this up in correspondence.
Sir George Young: I hope that the hon. Gentleman will accept that the leadership coming from the top of both Departments was heavily tilted the other way and that the policy he describes was certainly not the Government’s policy.
Closer to home—to revert to the speech by the hon. Member for Twickenham—my constituents are also talking about the railways, because work by Network Rail has overrun on two successive weekends, as a result of which my journey from Andover on Monday took two hours instead of one. Network Rail says that it has a grip on the contracts, but the contractor has overrun on two successive weekends, causing considerable disruption on the network. Such problems are not assisted by Network Rail’s reported inability to spend all the money that it has been allocated, because of some byzantine investment processes.
The hon. Member for Twickenham may not know that the first franchise train to run in this country left Twickenham station at about five o’clock in the morning one February in, I think, 1996. Somewhere in my archives, I have the first ticket to be sold by a franchised operator, and I was escorted on that historic first journey by Toby Jessell, who was the Member for Twickenham at the time.
As the hon. Member for Luton, North implied, the previous Administration’s policies on the railways was among their more controversial, but I would argue that the concept of franchising was sound and successful. We have created an industry that did not exist before—a train operating industry. Before that, all we had was British Rail, the monopoly that operated the railways. If it did not perform, we could not sack it and we could not get anybody else in—we were stuck with it. Franchising has enabled successful operators of other modes of transport—airways, buses and ferries—to apply their skills to the railways. We would not have been able to take that approach had we not privatised the railways and restructured them in the way that we did.
Franchising has also enabled the taxpayer and the passenger to benefit from the constant re-bidding for the franchises and to capture the extra value, which one simply could not do when British Rail was the provider. Coupled with privatisation, franchising has led to additional investment in the railways, which we would not have had before, when we were wholly dependent on what we could get out of the Treasury. If anybody fails, as has happened, others are willing to take over and to do a better job. We could not have had that before.
John McDonnell rose—
Sir George Young: I thought that I might provoke the hon. Gentleman.
John McDonnell: The right hon. Gentleman is having his Edith Piaf moment. Does he have any regrets about the management of the railway system and the system that we now have as a result of the policies that he introduced? If not, that would seem to be somewhat contrary to the policy of the new leadership of his party, which is to plead for forgiveness from the electorate.
Sir George Young: What I really regret is that, at the time, the Labour party did not say that it would do what it actually did—leave the structure virtually as it found it. It would have been a much easier policy to implement if the Labour party had been realistic and not made threats, including the threat to renationalise Railtrack. As a result of franchising, we now have train operators that look outwards to the market and passengers, whereas previously we had just British Rail, which looked inwards to the Secretary of State, who provided the subsidy to keep it going. Many good people stayed on from British Rail and entered the new companies. To counterbalance what the hon. Gentleman just said, many people who had been in British Rail regarded themselves as liberated, under the new arrangements, to innovate and to use the resources that they simply could not get out of the Treasury to provide a much better service.
Kelvin Hopkins: It is interesting that the right hon. Gentleman’s experience of former BR employees is different from mine. In many cases some of the companies do not like the old BR employees, because they are too fussy and like to get things right. They do not want to cut corners, as so many of the private companies do.
Sir George Young: I think, for example, that Christopher Green, who was at British Rail, has been an outstanding example of a good manager transferring across and making a success of the new regime, so I find myself in respectful disagreement with the hon. Gentleman, but also with the Select Committee on Transport, whose conclusion on franchising was, in paragraph 124:
“Passenger rail franchising, far from being a model capable of delivering quality rail services for the next half century, appears to be a policy muddle.”
I think that the concept—the model—is all right. If the Committee is saying, as I suspect, that the way in which it has been applied is not perfect and is capable of improvement, I would agree.
I agree with what has been said about long franchises. In the previous Parliament we had some two-year extensions, which were a disaster. If we want to maximise investment in the railways, as I hope all those present this afternoon do, the train operators need a long franchise to have the incentive to invest. The Select Committee suggests 15 years; the South West Trains franchise is for 10 years, as the hon. Member for Twickenham said, with the last three dependent on performance. I want to spend a moment on something that the Committee did not touch on—what I call end-of-franchise blight. As the end of a franchise nears, the franchisee becomes reluctant to invest, understandably, because its investment may end up in someone else’s pocket. There is provision in the legislation to get around that, but it does not appear that it is being used. If memory serves, it provides that the regulator—possibly now the Department—can underwrite the investment at the end of the franchise if it believes that to be sensible; that carries through to whoever wins the franchise. I should like more of that, to avoid the cyclical effect that can come with franchising.
For many people in North-West Hampshire the constraint on using the train is not the fares or concern about congestion or safety; it is station car parking. The
Government and the operators want people to use trains in the middle of the day, when they are empty, but by the time trains are empty the station car parks are full. I have four South West Trains stations in my constituency—Grateley, Andover, Whitchurch and Overton—and there is a serious problem at all of them. Last week I got to Andover at a quarter to 8 in the morning, and there were only six places left. That puts people off the railways and upsets people who live near the station, who find commuter cars blocking their streets.
The local authorities—the town and parish councils—want progress to be made on that front much faster. The Department’s press release about the South West Trains franchise mentions smart tickets, gated stations and new radio equipment, but says nothing about the major constraint on rail usage in my constituency: parking. I am not sure that I want a taskforce to put that right, but I want a focused effort to expand capacity. Otherwise, people will simply get back in their cars and drive all the way on the M3.
The Select Committee also says with respect to train operators that we need new entrants—a recommendation that may not find favour with the hon. Member for Luton, North. One of the Government’s policies seems to militate against that. They are trying to reduce the number of franchise operators at a number of mainline stations. No one in this country is trying to reduce the number of bus operators or airline operators, and I am not quite sure why the Government are trying to reduce the number of franchises and, thereby, train operators.
I agree with the Select Committee that the specifications in the franchise documents are now far too tight. They leave little incentive to innovate, and the Department virtually dictates the timetable. It may be more difficult for the Department to arbitrate if the bids come in on different levels, but I should prefer the encouragement of innovation and investment, and allowing differential bids, to the straitjacket that we have at the moment. I have seen some comment in the press to the effect that South West Trains may have “overbid” for the franchise. I think that it is unlikely that an experienced company that has been operating in the market for 10 years would have done anything uncommercial. I think that it knew exactly what it was doing when it bid the £1.2 billion premium.
The hon. Member for Twickenham mentioned Airtrack. I hope that the Government will try to make progress with that project. Someone who wants to get to Heathrow by public transport from my part of the country catches a train to Woking, and then catches a bus. It would be much easier if one could go all the way by train from Woking to Heathrow. There are plans. I think, contrary to what the hon. Gentleman said, that South West Trains would get extra business from the south-west if there were a through service to Heathrow through Airtrack, which might counterbalance any possible loss of traffic from the east. If the Minister has time to explain where we are in relation to Airtrack, it will be enormously helpful.
John McDonnell: I cannot resist a plug for Hayes station. People coming from the west can now get off at Hayes station and transfer to a Heathrow train that will take them directly to Heathrow. I think that from Woking it may be possible to get there via Reading.
Sir George Young: Passengers can if they are on First Great Western, but they cannot if they are on South West Trains, because those do not go to Hayes and Harlington. I should like my constituents to have the facility that the hon. Gentleman’s constituents have to go by train to Heathrow.
The key issue for Network Rail, for the Department for Transport and for those who run the railways is how to get the increased infrastructure that we need to cater for growth. If we consider the South West Trains franchise, there is only one scheme of any significance in the 10-year plan. That is double tracking some eight miles of the west of England line near Axminster. The route utilisation strategies for most Network Rail routes are long on words but short on specific action. The argument is always that there is no business case. The problem with the railways, as we all know, is that quite often there is not a business case for projects, but they are for the benefit of UK plc, and are desperately needed for a balanced and sustainable transport strategy. At the moment, a lot of the key schemes to expand the network simply are not getting carried out. The present arrangements for franchising are freezing out those crucial expansion plans, and that aspect needs revising.
I want to say a final word on fares. Those are regulated by the Government, with no freedom for the train operators to charge what they want. In the first franchise period, regulated fares could go up by only the retail prices index minus 1 per cent. That gave a clear signal that rail fares would fall in real terms, and provided an incentive for people planning their lives and the way they would get to work to use public transport. Now there has been a move to RPI plus 1 per cent. I understand all the pressures that led the Department to do that, but it is absolutely the wrong direction in which to go if we are to have the balanced and sustainable transport strategy that I hope everyone present today wants. The Treasury has won that battle with my old Department, but I hope that the Minister will fight back in future years and get a fares structure that is better balanced and provides the right incentives for people to choose a public sector mode of transport.