Rail Franchising — House of Commons, 2018-01-10
Topic: Transportation
Alan Brown (Scottish National Party, Centre-left): A belated happy new year to you, Madam Deputy Speaker. I also welcome the new Ministers to the Front Bench and pay tribute to the work done by the previous Minister, the right hon. Member for South Holland and The Deepings (Mr Hayes). He certainly knew how to conduct himself at the Dispatch Box, and perhaps the Secretary of State should be thinking about how he conducts himself. He said that the hon. Member for Middlesbrough (Andy McDonald) spoke for 25 minutes just talking rubbish, but he then spent 18 minutes just union bashing before getting on to any substantive point. Let me be probably the first in the Chamber today to congratulate Virgin on its recent decision to stop selling the Daily Mail on the west coast route. I am sure that many Members will agree when I say that I hope other outlets follow suit. That is probably the last compliment I will pay Virgin, but I want to commend the hard work of its staff. I encounter them fairly regularly on the west coast route and I can certainly testify to their professionalism and hard work The motion covers rail franchising in general and the bail-out of Virgin East Coast in particular. It is fair to say that there are opposite views across the Chamber on the merits of privatisation and franchising—we have already seen that in this debate—but one thing I am really confident about is that the Transport Secretary wrongly connects cause and effect when it comes to the privatisation of the railway. It can be argued, and has been, that British Rail was struggling, with poor rolling stock that was outdated, but that is only half the picture. Any under-investment in British Rail and rolling stock was due to Government constraints. Passenger numbers were affected by the recession, in terms of both affordability and commuters having jobs to travel to. Spending power for investment was further hampered by the safety-critical upgrades required following the 1988 Clapham rail crash, and upgrades needed to service the Channel tunnel links—yet another example of investment in the south-east of England to the detriment of the rest of the United Kingdom The response of John Major’s Government to the problems in British Rail was to privatise and sell it off, but they did that at such a pace that there was no co-ordinated or strategic approach. History shows that that rushed privatisation gave us Railtrack, which eventually went bust and was replaced by Network Rail. If ever there was a demonstration that infrastructure is best owned and managed by the public sector, to avoid profit being put before safety, that is the prime example. I do not pretend that Network Rail is operating as efficiently as possible, but it certainly does not put profit before safety The franchise approach to privatisation gave us a model in which the countries of Great Britain were the only ones to have completely divested themselves of any public stake in passenger rail operations. Given the problems since then, that appears to be another clear example of the UK leading the world, but leading it down completely the wrong path. What rail privatisation gave us was a complex model—stuck doggedly to by the Tories and the Blair and Brown Governments—of charging, interactions, private companies requiring large profits, and ticketing arrangements, and a way for companies and the network owner to play a game of blaming each other for problems The problems are aptly summed up in the report on the southern rail franchise just published by the National Audit Office, the main conclusion of which is that it cannot be demonstrated that the franchise has delivered value for money. The operator blames Network Rail and the unions. The Government blame the unions, as we heard again today from the Secretary of State, but completely ignore the part they played. The bottom line is that 60% of cancellations were due to Govia Thameslink and 40% due to Network Rail. It was the UK Government who set up the model that was supposed to align with the complex infrastructure upgrades; it was the UK Government who took the revenue risks, which means that strikes cost the taxpayer money; and it was the UK Government who awarded the franchise based on even further roll-out of driver-only operation; so the initial unwillingness on the part of the UK Government and Transport Secretaries to get involved is shameful The NAO also makes it quite clear that the Department for Transport had a large responsibility, especially in relation to access to the network and timetabling pressures. I am concerned that the DFT’s lack of understanding of pressures arising from upgrades and timetabling will have an impact on the west coast franchise and HS2 awards. Is that the reason why the invitation to tender for the west coast franchise, which was due in November 2017, still has not been issued and we do not know when it will happen Other franchise issues include the failed award of the west coast franchise in 2012. I am sure that, had Virgin Trains won that franchise in 2012, it would happily have taken it rather than threaten court action. As we have already heard, the case led to direct awards. According to a Library briefing, 12 of 16 franchises have now been subject to direct award. Further failures by the Department for Transport give us the worst of both worlds—there is no competition, and short-term awards provide no incentive for long-term investment, yet the companies are still guaranteed a profit. That is a poor set-up.