Mr. Eric Martlew (Carlisle): I attended a meeting earlier this week at which there was discussion of the reinstatement of a line from Lewes to Uckfield. The hon. Member for Lewes (Norman Baker) was very interested in that. The reality is that Network Rail was asked to draw up the business case, and surely that would be the way forward. It will do the business case for people and then they can present it.
Dr. Pugh: It would be nice if Network Rail was always so obliging. Merseytravel is helping with the business case for the Burscough curve that I mentioned.
We pursued that option because Network Rail did not seem as enthusiastic about the proposal. It did not suit its strategic objectives to the same extent as for Merseyrail.
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Mr. Martlew: In an intervention, my hon. Friend mentioned the Barnett formula. After a high-speed line reaches Carlisle and enters Scotland, whether on its way to Glasgow or Edinburgh, how is it funded? Are they UK funds or do they come from the Scottish Parliament?
Mark Lazarowicz: If I have time, I shall try to deal with that question, although I suspect that it is more for the Minister to answer - I am sure that he looks forward to doing so.
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Mr. Martlew: Is not the point that has been made spurious to the extent that if the money did not go into Network Rail, the Government would charge the companies a lot more for running on the track?
Jeremy Corbyn: My hon. Friend is absolutely correct. He is thinking of the enormous public investment that has gone into west coast mainline and east coast mainline and all the other infrastructure developments. That should be seen not as dead money but a good investment in creating both jobs and work and a good transport infrastructure. If such transport infrastructures then run profitably, the public should benefit from the profit, which is the whole issue about public investment and public development.
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Mr. Eric Martlew (Carlisle) (Lab): I wish to put on the record, Sir Nicholas, my thanks to you as co-chair of the all-party parliamentary group on the west coast main line. It has been a hard road and it has taken a long time, but I think you will agree that we now have a line of which we can be proud - although I am not sure whether you got the improvements to Macclesfield station, Sir Nicholas.
The Government were brave to bring out a 30-year plan - although I suspect we might have 15, 16 or 17 Secretaries of State before it reaches the end of its term. I am looking forward to reading the plan in 30 years’ time - in fact, it will be in 28 years’ time because it has been out two years. However, it already looks dated in some ways. I looked at the report, which I think we published last August, and that also seems dated in some ways because at that time we were talking about electrification. I think oil would have then been about $150 a barrel and we were talking about $200. Of course, now it is probably $40 or $45. The argument in that respect was probably wrong.
We were also looking forward to railway expansion. Today, we have been talking about the franchising companies possibly handing their franchise back because there has been a reduction in the numbers. However, those are the future plans. We have to ignore such minor blips and concentrate on the 30-year plan because we will get out of the recession and oil prices will go up again.
The Government got it wrong in two cases: first, in relation to the electrification itself and, secondly, in relation to the high speed line. To give the Government credit, they have put it right in both instances. Those of us who heard the Secretary of State’s statement today will have noticed that he mentioned the electrification of the main line to the midlands - the Midland Mainline - and the First Great Western. Those were not included in the plan two years ago. In fact, doing so was frowned upon - the Government were not brave enough. Of course, there is also high speed line 2. We are going to have high speed 10 taken out at Companies House, but that was not in the document at all at the time - it was exactly the other way. When we saw St. Pancras station and high speed 1 come in on budget and on time, we realised that that was the way forward. The Government have to be congratulated on putting those two things right.
I want to concentrate on a couple of issues today. I have heard many hon. Members talk about the high fares that we pay and then I heard them say, "But, we need extra improvements" - for example, in my or their constituency. I am not sure that we can both keep fares low and make improvements. The fact is that we have increased the public subsidy going into the railways from £1 billion to nearly £6 billion in the past ten years. The idea that we will not have to pay a public subsidy, which was the promise given by the Conservatives was, of course, nonsense. It is right to say that we can keep fares low and not increase subsidy. However, if we do that, what we cannot do is improve the railways. The reality is that if we keep fares low and do not increase the subsidy, we will have a declining railway, which happened for probably 30 years after the war. We cannot let that happen.
The other thing that we must not forget is that in my constituency, for example, where public transport is by bus, people will often not use a train from one year to the other, and parents will say that they are taking their children on the train for a treat. Are we really saying that people who never use trains should pay extra taxes for those who do? I am not sure what the answer is - although I am sure that the Minister will try to give us one. We have to be careful about saying that fares are too high. No one says that we should put more subsidy in, but that is what we mean. If we do not increase fares or increase the subsidy, we will have a declining railway.
Jeremy Corbyn: I am sure that the hon. Gentleman would agree that one way of looking at the matter is to consider the exorbitant profits being taken out by some of the train operating companies. Also, his argument about investment would apply to anything. People who do not have children pay taxes that help pay for education and so on. Surely, it is for the general good of everyone that we invest in a rail system?
Mr. Martlew: I understand that, but it is obviously easier for my hon. Friend to say that when we spend billions of pounds in London. My constituents have no option but to catch the bus. He is right about the money that is going into the private rail companies, and I will come to that in a moment.
We have to think carefully about the issue. It is all too easy to say, "Fares are too high; we should increase the subsidy." However, if we do not increase the subsidy, the effect will be a decline in the railway, which is what happened over 30 years on the West Coast Railways. That is why it cost nearly £9 billion to put things right - although a lot of it was just renewal work. We have to come to a conclusion about how we are going to deal with the matter.
Dr. Pugh: Several hon. Members have talked throughout the debate about the railway model that we have, with the rolling stock companies, the train operating companies, Network Rail and so on, and that we need to make sure that the subsidy is greater than it needs to be - even given the level of investment. The hon. Gentleman just mentioned the west coast main line, but half of the problem was the fact that we had Railtrack.
Mr. Martlew: When Railtrack was going to upgrade the west coast main line, I think the bill was £13 billion. It was only as we brought it back out of the private sector that we got the figure down to a reasonable level. There is a quandary and a question in relation to that and I do not think that people are prepared to face up to that situation.
May I now talk about the skills shortages? If we are going to have a modern railway, we need the skills. If we look at what went wrong on the west coast main line in early January - apart from the aeroplane crash, which was unavoidable and tragic - it all boils down to bad workmanship. That was the problem. It was the contractors that were used at the time; it was the lack of skills; the lack of supervision by managers; and, probably more than anything else, it was the lack of project managers. We need to get those into the industry. Network Rail is doing quite a lot. It has an apprentice training system through which I think they train more than 600 apprentices a year. There is a residential course, but unfortunately, as far as I am concerned, it is on the south coast, which is a long way for my constituents to go. We also need graduates to come into the industry. Perhaps if they are not all going into the banks, some of those high flyers will go into the rail industry, because they will have a future there. The other problem is that the TOCs are not taking on people to gain the skills to maintain the trains because they have a franchise.
On franchising, we have a 30-year plan, but one thing is for certain: the franchises will not last for 30 years. I come from a railway family. My grandfather was a railway man and my father was a railway man. I know that privatised railways do not work. That was why the railways came into the public sector in the first place - it was not because we were greedy; it was because they collapsed. The franchising system was introduced by the Conservatives and has given us the worst of all worlds.
A company can run a good franchise and treat its staff and customers well, but that counts for nothing, because, when it goes for the next franchise, it is a blind process - the Government do not know who puts in the bid. So, when a company comes to the end of its franchise, why should it bother? It gets no credit whatever.
I must be careful with my next point, because I got it wrong during a Select Committee sitting. I said that I liked virgins, and it caused a problem. However, I actually think that Virgin Trains does quite well.
Mr. Paul Truswell (Pudsey) (Lab): You’ve done it again.
Mr. Martlew: I know, but it is an easy way of getting in the paper.
There has been no greater critic of Virgin Trains than me over the years, and we have had our share of ups and downs with Mr. Branson, but it has done quite a decent job. It is coming to the end of its franchise, and, when I complained to it only the other day about the inefficient toilets on its trains, a representative said, "We’re doing some work on that, but, by the time we finish, our franchise will be over and we may not get it again." The franchising system is a nonsense. It may be all right for McDonald’s, but it does not work for the railways, so they should be taken back into public ownership.
The other easy thing for the franchise companies - we saw this with GNER - is that, if the franchise does not work, they do not have to ask the Government for more money, they just hand the keys back and say, "That’s it, it’s not working, we’re stepping away." I advocate that we take the railways back into public ownership. Another option - I will not be popular for saying this - is to sell the business to the companies and then regulate them completely. We could have an "Oftran" and say, "You own the business, this is what you’ll do." They would not be able to give it back, although they would be able to sell it. The franchise system does not work, but I am afraid that my Government are not brave enough to take the railways back, so we have to look at other options. I am conscious that other Members wish to speak, and there are other things to say. The Government have been brave in bringing out their new document, and right in changing their mind on electrification and on high-speed lines, but serious consideration must be given to the balance between what we get from the fare box and from subsidies.
Finally, we must accept that the franchise system does not work and, therefore, do what I advocate. When the franchises come up for renewal, we should take them back into public ownership or consider giving the companies the responsibility for them. At the moment, they can get away with handing the keys back, and that cannot be good for the railways. It is certainly not good for the staff who work on them.
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Mr. Martlew: Can the hon. Gentleman take this opportunity to give us the Opposition’s fares policy?
Stephen Hammond: I shall come to that later. I am sure that you will be waiting earnestly and excitedly to hear it.
Sir Nicholas Winterton (in the Chair): I am not waiting: the hon. Member for Carlisle is waiting. The word "you" is not appropriate.
Stephen Hammond: I am disappointed that even Sir Nicholas is not waiting. But I take it that the hon. Gentleman may be waiting.
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Mr. Martlew: I am a bit worried because the hon. Gentleman has said "finally". He did promise that he would tell us about the Conservative fare strategy.
Sir Nicholas Winterton (in the Chair): Order. I have to say to the hon. Member for Carlisle that I am rather pleased that the hon. Member for Wimbledon has not gone down that track, because the subject of the debate is the Select Committee report, not the Opposition’s transport policy.
Stephen Hammond: I hear your strictures, Sir Nicholas, but I hope that you will allow me just a little latitude in a few moments’ time.
Mr. Martlew: He was only trying to help.
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Mr. Martlew: I do not want to touch on the companies that are asking for extra money, but am I not correct in saying that for a small penalty they can hand the keys back to the Government if they start to lose money?
The Parliamentary Under-Secretary of State for Transport (Paul Clark): The franchises are set up so that they do not penalise the travelling public, as happened in the south-east when Connex gave back the keys. In that case, of course, we asked the company to do so because the service was not being met. Costs are obviously involved, but the company has to provide a bond at the start of the franchise that would cover the costs of the administrative process involved in handing back the keys.
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