Asked by
To ask Her Majesty's Government what estimate they have made of
the cost to the new South Eastern franchise arising from any
increase in track access charges proposed by HS1 to the Office of
Rail and Road.
The Parliamentary Under-Secretary of State, Department for
Transport (Baroness Vere of Norbiton) (Con)
My Lords, the periodic review process that will determine the new
track access charges for HS1 from April 2020 is ongoing and is
the responsibility of the independent rail regulator, the Office
of Rail and Road. In line with the published draft franchise
agreement, the operator of the new south-eastern franchise will
be held harmless to any regulated track access charges proposed
by HS1 and agreed by the ORR, following regulatory scrutiny.
(Lab)
I am grateful to the Minister for that Answer, but she will be
aware that HS1 has applied for increases in track access charges
of 25% for domestic south-eastern trains, of 40% for Eurostar
services and of 75% for the freight that has to use that line.
Will the Minister remind the ORR of its duties under the 1993
Railways Act and subsequent legislation, and I quote,
“to promote the use of the railway network in Great Britain for
the carriage of passengers and goods”,
and,
“to protect the interests of users”?
I suggest to her that for the regulator to allow such increases
will dramatically harm passengers in the south-east by increasing
fares. Is it not better to protect the passengers, rather than to
line the pockets of the pension funds, including the Korean
pension fund, which now owns that piece of track?
I thank the noble Lord for his observations. As he well knows,
this process is ongoing, so any increases are not yet confirmed.
But my department expects the independent regulator, the Office
of Rail and Road, to provide a robust and rigorous challenge to
HS1’s proposals, as part of the review process. I am aware that
this process has been going on for 18 months and is continuing.
(LD)
My Lords, Eurostar operates in a multimodal travel market that
includes airlines, and HS1 is already the most expensive railway
in Europe by a big margin. If the Government are serious about
reaching zero carbon by 2050, this is just the kind of cost that
needs to be kept firmly under control. It is not acceptable for
the Government to hide behind the regulator. Can the Minister
give me an assurance that the Government will make it clear to
the regulator that costs like this must be well controlled?
I assure the noble Baroness that the Government are making it
clear to the regulator that we expect a robust and rigorous
challenge. It is of course independent, but we recognise the
importance of Eurostar, both for environmental reasons and for
providing extra capacity on a different mode of transport. We
support high-speed passenger services to Europe.
(Con)
My Lords, is it not of great concern that cross-channel
operators, whether of freight or passengers, would be severely
affected by the proposals as they currently stand? Is it not a
bit bizarre that the long-awaited new trains for the Anglia
region, which will make a once-in-a-lifetime journey there, will
have to be carted on freight trains, as they are not allowed to
go under their own steam, incurring extra cost? Are these not
reasons why my noble friend should keep a close eye on the
current discussions to ensure that a fair solution is found?
I reassure my noble friend that we are keeping a very close eye.
Obviously, the new trains are freight like everything else when
they are being transported, but we are concerned by the proposed
significant increases. As I have said, we will be looking to the
ORR to provide that robust challenge.
(Lab)
Does the Minister agree that it was perhaps an unfortunate
business for the coalition Government—which I recollect included
the Liberal party—to vote to sell Britain’s first high-speed line
to a foreign-based consortium? Does she agree with my noble
friend that such consortia will be more concerned about their
return to Canadian teachers, as well as South Korean pensioners,
than the plight of passengers travelling between St Pancras
International and Ashford? Whether she agrees or not, what is she
going to do about it?
I thank the noble Lord for that comment. I do not
agree—surprisingly enough—that the sale of this asset to
investors, foreign or otherwise, was a bad idea. Long-term
infrastructure investors can provide a useful source of capital
to assets precisely like this. This is why the ORR is involved in
this process: it will determine if the concession agreement is
being met and the outputs that HS1 must deliver in the next
control period. It will look at the asset management plan, the
regulatory framework, the structure of the charges and the
charges themselves.
(LD)
My Lords, will the Minister clarify the press reports about
franchising that have appeared today, indicating that the
Government may give the state-owned LNER a five-year extension of
its franchise?
I am afraid that the noble Lord has me stumped on that one,
because I have not seen those press reports. I will certainly
write to him if I can find out any more information.
(Lab)
My Lords, does not this debate reveal that there is still a
contradiction in the Government’s own transport policy on the
benefits of freight traffic being on rail? This extraordinary
increase in charges from HS1 should be investigated. The
Government have not answered the question from the noble Baroness
on the Liberal Democrat Benches about whether this is compatible
with the Government’s transport policy.
The Government absolutely support the movement of freight on
rail. We were interested to read the report on freight by the
National Infrastructure Commission. It is a very good study, and
we will be taking forward further work in this area. I remind the
noble Lord that we have invested £500 million through the
strategic freight network fund and made very important
investments at some of our ports and elsewhere. We also provide
rail freight subsidy through the mode shift revenue support
grants for national rail track of £15.6 million, which takes
800,000 lorries off the road.
