Leeds Railway Station

HL Deb 01 May 2001 vol 625 cc629-46

7.39 p.m.

Lord Greaves rose to ask Her Majesty's Government what lessons can be drawn from the modernisation scheme at Leeds railway station.

The noble Lord said: My Lords, a certain amount of discussion has taken place among noble Lords, who, in response to seeing this item on the Order Paper, have said such things as, "Why are we talking about Leeds station?", as though Leeds were in the north of Finland and had a population of 23. I shall try to explain.

I start by putting the matter into context. Leeds station claims to have the largest number of passengers of any station outside London. More than 900 trains a day go through it. It serves a city which is a major regional centre. As a native-born Bradfordian it pains me slightly to say it, but Leeds is a thriving regional centre. It is the largest financial and legal centre outside London. The station, which is run by Railtrack, provides facilities for services run by GNER. It is the main northern terminus on the West Riding branch for the East Coast Main Line, Virgin Cross Country services, a large network of suburban services run by Northern Spirit, or, as they now announce themselves, Arriva, together with the increasingly important trans-Pennine services and, indeed, what remains of the Settle to Carlisle services.

Therefore, what has been happening at Leeds station that leads me to ask your Lordships to debate the matter? A £165 million scheme—it may now be larger than that—is under way for the major renovation and recasting of the track, signalling and infrastructure in the area. Approximately £40 million is being spent on transformation of the station itself. It is called "Leeds First". It is also called the "East Coast Main Line Modernisation Phase 1". One hopes that other phases will follow. The massive 30-month programme in seven phases aims to transform the track, provide more platforms, more track and modern signalling and create a modern station.

Therefore, what are the problems? There are several. There has been a huge amount of disruption to local services throughout West Yorkshire and the parts of North Yorkshire served by Leeds. But people accept that because the long-term result will be beneficial. However, during the Christmas period, acceptable disruption turned into a shambles. The situation at Leeds station was partly a local laughing stock and partly the cause of a great deal of dismay and anger.

During what in railway terms is called a "blockade"—in other words, the closing down of the station for new signalling, platforms, track and so on—the whole situation got out of hand and, in effect, the project fell apart. The blockade of some 10 or 12 days was due to end on 2nd January. Railtrack failed to meet that deadline and announced that it would overrun by a week to 9th January. During that period, the station was completely closed down.

Railtrack had said that the project would overrun to 9th January. That failed, and it overran by another week to 15th January. On the 15th, when everyone expected the services to start again and the local bus services had been called off, it was found that the electric services could not run either because the overhead wiring had not been installed satisfactorily. Only diesel trains were able to use the station that day.

On the next day, 16th January, when the station was due to open yet again, there was a points failure and more chaos. People in that part of West Riding have a fairly wry attitude to life and are able to tackle situations with broad shoulders and a good broad Yorkshire accent. But, finally, the situation got down even the people of Leeds and the West Riding. Not only Leeds was affected; the knock-on effects caused huge disruption to the whole network in West Yorkshire. Businesses in Leeds are said to have lost hundreds of thousands of pounds, if not millions, during that period.

Many excuses were given. The first excuse was the bad weather. It was bad, but one expects bad weather at the end of December and beginning of January. However, Railtrack has been remarkably frank about why the problems arose. Its spokesperson, Naomi Steer, was reported in the local press as saying that Railtrack had been "seriously surprised" at the complexity of the work. It is clear that there were huge faults in the initial planning. During that period there was also a huge breakdown in communication between the project partners and, indeed, the public.

What the company called the "complex interfaces" between the contractors had not been properly integrated. Railtrack had been too ambitious in what it tried to achieve, and it was installing new technology that had not been properly tested. I went along as a lay person to watch the operation. While watching the Balfour Beatty workforce build the new platforms where the old Midland station used to be, I saw several men spend a lot of time standing around doing very little. Some were walking up and down purposefully and some were looking at plans.

One day I saw nearly 100 people, all wearing Day-Glo orange jackets and looking, I suppose, like Liberal canvassers. Nevertheless, they were altogether less efficient than Liberal canvassers. I counted approximately five or six who were actually doing something. If I had been Balfour Beatty or Railtrack, I would not have been very happy with the people whom I was employing and who, because of the organisation's inefficiency, were not doing very much.

Indeed, there is no argument about what I am saying. It can all be found on the Railtrack website, which states: Engineering works overran by a wholly unacceptable margin".

The Railtrack LNE director, Robin Gisby, is quoted in Rail magazine as saying: It was totally unsatisfactory for passengers".

He also stated that the situation was "unacceptable".

Railtrack is now promising that the situation has been sorted out. The Rail Regulator gave the company until 21st May to finish the current phase, and it is still promising that the operational aspects will be finished by the end of this year. We shall see. We shall be able to give our final verdict on Leeds station and on whether or not the project has been a success when we are able to use the new station in its final form and can see whether the trains all arrive on time and whether everything works properly.

The important issue, and the reason why I tabled this Question, is that such a situation must not happen again. There must be no more blunders at Leeds. If there are, I believe that people will become very angry. However, more than that, future projects of this type on the rail network must be properly planned and properly managed so that such problems do not occur again. These are hugely complex projects involving a series of different engineering and civil engineering disciplines. They need proper planning and proper management, and it is absolutely clear that the planning and management at Leeds have fallen down. The fact that the projects are so complex is all the more reason to carry them out properly.

I hope that the Minister will tell us of many exciting projects in his 10-year plan for the railways and transport. I hope also that he will tell us that they will be managed properly in future. Different ways of doing so have been floated. Perhaps he will explain those to us.

Perhaps I may refer to one or two other projects which are similar to the one at Leeds in that they involve substantial work to the rail infrastructure surrounding a major station. With regard to the East Coast Main Line—if modernisation on that line ever moves beyond Leeds First Phase 1—we are promised substantial works in the Doncaster area, including at Doncaster station, and at Peterborough. Perhaps both those projects will be even bigger in terms of their cost than the one at Leeds. If the people of Doncaster and the users of the East Coast Main Line are to be subjected at Doncaster and Peterborough to anything like the situation at Leeds, I believe that certain people will have to start to run for cover.

There are proposals—I do not believe that at present they are more than that—for a major and substantial rebuilding project at Birmingham New Street, which, like Leeds, is a bottleneck so far as concerns services. If that comes about, I hope that the lessons of Leeds will be applied at Birmingham.

I return to what I said at the beginning of my speech and perhaps I may give one final warning. People ask, "Why are we talking about Leeds?". If what has happened at Leeds had occurred at any of the main London stations over Christmas, your Lordships and the other place would have discussed it endlessly, week after week, in the weeks and months since then.

One of the main projects involves major re-engineering and rebuilding work at Clapham Junction. I urge noble Lords, the Government and everyone else concerned with the railways to take note of the lessons from Leeds and to apply them to Clapham Junction. Otherwise, noble Lords will be discussing Clapham Junction every week for a year.

7.50 p.m.

Lord Berkeley

My Lords, I congratulate the noble Lord, Lord Greaves, on securing this debate. He asked, why Leeds? As he said, it is an example for the whole industry. While Leeds was having its disaster over Christmas and the New Year, so was Willesclen. That disaster severely affected freight. I declare an interest as chairman of the Rail Freight Group. Channel Tunnel rail freight services were almost at a stop for about a month. Similar problems arose in Leeds and Willesden. We were told that the problem was equally complex and the consequence of signalling overrun, and so on, and we had the usual apologies. I do not believe that railway projects are particularly complicated—we should compare them with major chemical plants or various activities in the oil industry. We do not hear of such major problems in the oil industry, in which I have worked for a few years. It has a habit of managing to cope with weather. Yes, it did snow in Leeds, but, as the noble Lord said, it snows many winters.

I heard at Leeds and Willesden that the overhead line contractor departed on 2nd January and left the job unfinished because he had air tickets for India and that the signalling contractor had air tickets for Australia. The job was therefore left half finished. I made some inquiries today and was told that the Railtrack project manager spent 10 days on holiday in the United States during the same period. I am not sure how he could have project-managed the situation.

It is unacceptable not to test equipment first. We heard such an allegation in relation to the West Coast Main Line two or three years ago with moving-block signalling. As the noble Lord, Lord Greaves, said, train operators fared little better than the contractors—they had no information and no forward planning. Railtrack may be exhibiting the novel idea that if one is going to close a station or a line, one first comes up with an alternative route. It may have proposed to do so for the West Coast Main Line next summer and may not blockade the whole of that line for a month next August. We shall see.

My conclusion is that there has been a total management failure on both projects over Christmas. The Leeds situation is not the only or the first example. Apologies are not enough.

I question whether the situation mattered to Railtrack, the Rail Regulator and the Strategic Rail Authority. I think that it mattered to the Government—the Minister will later tell us about that. People said that if there was a financial shortfall, the Government would pay because the Rail Regulator would tell them to do so. I do not think that that is the case, even if it was the case. Yesterday's Financial Times reported that, when speaking to Railtrack's shareholders, the Rail Regulator's chief economist said, if Railtrack gets into a financial crisis because of inefficiency or through mistakes it will not receive extra public subsidy to prop it up". That is pretty clear to me. Railtrack faces claims from train operators and passenger and freight operators, and new contracts are coming out, which may involve further risks. We have to ask whether Railtrack can get it right or whether it is heading for extinction—self inflicted or otherwise.

There appears to have been a fear that Railtrack will be taken over or liquidated. I must ask why—that is what the private sector is about. Railtrack has assets that we are told are worth about £3 billion and its share price is now nearly down to its offer price. Its liabilities are very high and it will not make any more capital investments. I heard Sir Alastair Norton, the chairman of the Strategic Rail Authority, give evidence today to the Transport Committee in another place. He said that the Government's contribution was £29 billion over 10 years and that much of that would go to Railtrack. He also said that if the Rail Regulator was not propping up Railtrack's inefficiencies, what would happen to any company would happen to Railtrack, which is no different in this regard. When the share price starts to go through the floor, shareholders start to make a noise and put pressure on management to change, or somebody comes along and buys the company out.

To conclude, now is not the time to discuss the restructuring of Railtrack or the rearrangements between the SRA, the Rail Regulator and the Government to achieve a 10-year plan, but that is what has to be discussed at some point. Passenger and rail freight customers are suffering from a structure of continuing inefficiencies. We must discuss whether it is possible to have a company with duties to shareholders and to maintaining network efficiency. Is it right to continue to pour Government money into a regulated monopoly when it has been publicly stated that it can raise no more private finance itself? This House and the country will want that question to be answered after the election.

7.55 p.m.

Lord Wallace of Saltaire

My Lords, I am glad to see that the noble Lord, Lord Dixon-Smith, is in his place. As has happened so often in debates in the House in which I have participated during the past few months, the Conservative Benches are almost empty. It may be that there are no Conservatives left in West Yorkshire to lobby noble Lords.

Leeds station is at the centre of the whole network in West Yorkshire. In Leeds and many other cities we have the inheritance of separate lines running into separate stations. That is the legacy of the first privatisation of our railways. A lesson was founded on the need for strategic planning and the dangers of fragmented ownership.

When I first went to live in Manchester there were five separate stations and one had to walk, carrying one's suitcase, between one and another. That, happily, has been resolved by building the Salford curve and by the introduction of trams.

Birmingham used to have two major stations, through which I also walked as a young man. Birmingham New Street is now a focal point for the entire rail system. However, that raises disturbing questions about whether Railtrack is investing enough in sufficient spare capacity and, in particular, in additional track in and out of the station, to maintain the growth in rail travel.

Bradford is the second city in the West Yorkshire conurbation and it is still without a through-route from north to south. That is a legacy from the ancient rivalry between the Great Northern Railway, the Lancashire and Yorkshire Railway and the Midland Railway. It is still evidenced in the 800-metre gap between Bradford Exchange and Bradford Forster Square. There has been a series of proposals over the past 50 years or more to link up those stations but none of them was ever carried through. That was the result of a lack of imagination, inadequate finance, low priorities, divided authority and a preference for roads.

When I was first living in Shipley in Saltaire, the Aire Valley motorway was going to take care of the whole problem. That was fine except that it would have involved the demolition of a substantial part of Saltaire, which would never have been eligible for world heritage status and would have occupied the whole of the narrow Aire Valley for some miles.

Rail traffic is highly desirable in West Yorkshire because of the nature of the environment and the need to link together the old textile towns north as well as south of Bradford and Leeds, including Bingley, Shipley and Skipton. Those areas are now dependent on financial services, some of which, as we well know, are being forced into amalgamation, which threatens local employment. We need to have a connected rail network. There was an attempt, during earlier cutbacks, to close the Settle to Carlisle railway line, which would have ended links to the north. The massive and unexpected successes of that line since investment was provided to keep it open maintains a link to the north. I welcome the fact that at last decent trains are being introduced on the Airedale and Wharfdale lines to replace the cast-offs from Network SouthEast, with which we used to survive.

Bradford and its associated towns need a through-link to take them directly to Manchester Airport and to provide them with a better link to Leeds. The improved stock is a welcome beginning. Leeds station, when it is finally completed, will be an improvement for the whole region, but I suggest to the Minister that proper investment in an integrated transport structure for the whole of West Yorkshire also requires such a link-up in Bradford as well.

8 p.m.

Lord Faulkner of Worcester

My Lords, I thank the noble Lord, Lord Greaves, for initiating this debate tonight and for giving us the opportunity to discuss some of the problems which the fragmented railway faces as it attempts to undertake investment projects which are designed to provide more capacity and eventually to improve facilities for its passengers.

I suppose I can claim a tiny amount of responsibility for what has been done at Leeds as I helped the British Railways Board promote the general powers Bill—one of the last it put forward—which provided for two extra tracks from Holbeck to Leeds to increase capacity for the growing number of metro trains approaching the station from the west, particularly from Harrogate and Bradford. That was before the Transport and Works Act 1992 took effect.

So the origins of the scheme are well-founded and are part of the strategy for building for the growth in the railway which everyone in this House wishes to see. However, the lessons to be learnt are essentially and inevitably for Railtrack. The Leeds scheme was developed and funded by it and the implementation was entirely under its management and control as the infrastructure owner.

Railtrack acknowledged failings in the way in which the project was implemented. The noble Lord, Lord Greaves, referred to that admission of failure on the Railtrack website, particularly in relation to the ambitious timescales set and, above all, the lack of contingency plans. The bulk of the work was undertaken during the Christmas and New Year period, at a time when resources and attention were diverted elsewhere to deal with the emergency speed restrictions imposed after the Hatfield accident and the results of extensive flooding.

But the main problem was that Railtrack was grossly over optimistic as to what could be done on the fragmented railway. It seemed to believe that it was able to plan on the basis of what British Rail would have done had it still existed. The truth is that those criteria no longer apply. I am not one of those who look back at the days of the nationalised railway through rose-tinted spectacles and try to pretend that the trains all ran on time, that all the staff took their responsibilities as public servants seriously and that all stations and coaches were clean and free of litter and graffiti.

But, on the whole, British Rail was able to plan and manage the big investment projects well. The East Coast Main Line electrification was completed on time and on budget, as was the building of the Eurostar terminal at Waterloo. I recall that when the west coast line was being electrified new services were provided on alternative routes such as from Paddington to Birmingham Snow Hill and from St Pancras to Manchester Central, while the major works were being carried out on the lines out of Euston. It is almost impossible to imagine that happening today because the different lines are run by different train operating companies. So when, as happened the other day, Railtrack closes the route between Taunton and Exeter, for example, First Great Western offer its passengers not trains on another line but slow and uncomfortable buses, even though there is an acceptable alternative route from Salisbury to Exeter on which South West Trains run.

Railtrack seems to have come to the view that the railway has lost the knack of upgrading and renewing while services are still running and that the only solution therefore is to shut the railway. That is why we hear calls for fortnight-long blockades on the West Coast Main Line, for example. But such blockades destroy the business of the train operators, who need every penny they can get, and more, to meet the declining subsidy profiles, which were based in the beginning on an uninterrupted service.

At the heart of the Government's 10-year transport plan is a 50 per cent increase in passenger miles. A large number of major infrastructure investment projects are being planned to deliver that, and there will be many more signalling renewal schemes during that period which Railtrack will have to carry out. So it is vital that the lessons learnt from Leeds are applied to those schemes to minimise disruption to passengers while the work is being undertaken.

Since the turn of this year, it has become evident that Railtrack may not be able to take forward major enhancement projects that are not already committed, and that those will need to be led by the Strategic Rail Authority. I hope that the SRA takes forward those projects in joint ventures involving private finance and private management expertise. It will be essential that it makes contingency arrangements to deal with problems as they arise. An important part of that will be to make alternative arrangements for handling passengers while the services are disrupted, and it will be important to involve the rail passenger committees in that process.

The Government were clearly right to establish the SRA and to equip it with adequate powers to lead the industry in this way. Under the regime set up at privatisation there would have been no alternative way forward if Railtrack proved, as it has in the sad case of Leeds, unable to manage the major infrastructure investment projects.

8.5 p.m.

Lord Bradshaw

My Lords, before speaking I must declare my membership of the Strategic Rail Authority, but emphasise that I am not speaking on its behalf. I also thank my noble friend Lord Greaves for giving us this opportunity to debate this topic.

I alone of the people taking part in the debate have been responsible for the management of some of the largest infrastructure resignalling schemes on British Rail. On no occasion did we have overruns of the sort that have taken place at Leeds. The biggest scheme, at Liverpool Street, which was carried out over an Easter weekend, overran until the Tuesday lunchtime and there was hell to pay for the managers as a consequence.

I want today to concentrate on the broader issues raised by what happened at Leeds. First, I want to contrast the problems of a management project on a "live" railway, to which the noble Lord, Lord Faulkner, referred, which are totally different from a major infrastructure job on a greenfield site. It is important to recognise—I do not believe even senior people in the SRA and possibly in government understand this—the difference between building the Channel Tunnel rail link through green fields and upgrading the West Coast Main Line with trains constantly whizzing past at speed.

It is important that the person most involved is the principal operator. The principal operator must take the lead in these schemes. At Leeds I understand that GNER did not even have a representative in the project team. That is absolutely disgraceful. GNER should have been in the lead because it deals with the customers and would have represented not only its own interests but also those of the customers.

If a scheme is led by an operator within a properly thought through engineering and logistical plan, which itself is built into the timetable, the unexpected delays and compensation payments can be avoided. I cannot describe the satisfaction of a proper railwayman seeing, after six weeks, the first train go on time, to the right platform, to the right place. It is a culmination of years of work. When we hit that spot, we know that we have done our job properly.

Compensation costs a lot of money. Of the recently announced £500 million increase in costs on the West Coast Main Line—it is now overrunning by £6.3 billion—£300 million is extra money for compensation. We do not buy any extra railway for that; it is compensation. The compensation culture encourages every engineering contractor to build contingency into the cost. That is why the cost of doing the work has doubled since Railtrack became responsible. Yet the present franchising arrangements set tough performance targets which mean the operators must seek compensation to offset penalties.

So what do we do now that Railtrack is unlikely to be the leader in the future on these projects? In my view, major upgradings should be built firmly into the new franchises, placing the major operator in lead position in planning the work with an obligation to take account of the requirements of secondary users.

Within the life of the new franchise it should be possible for timetable planning and performance criteria to be adjusted, which is now very difficult, so that we can accommodate major upgrades and avoid the compensation payments while still holding contractors responsible for overruns beyond the planned time. There is still time to do that because no new franchises have been signed, although Railtrack's position has changed.

So my message to the Government and to the SRA is to take this opportunity of the new franchises and to put the lead operators in charge. To take South West Trains with its plans to goldplate the railway between Surbiton and Waterloo as an example, let it design the timetable because it deals with the customers. That is the way to avoid another Leeds. I beg the Government and members of the SRA to listen, for once, to the views of professional railwaymen.

8.10 p.m.

Lord Woolmer of Leeds

My Lords, it is a pleasure to follow the thoughtful and constructive remarks of the noble Lord, Lord Bradshaw. I start by emphasising how welcome and necessary is the investment of what will probably be, when this massive project is eventually finished, at least £200 million in my estimation in greatly overdue improvements in track, signalling, station platforms and facilities at Leeds.

By common agreement, Leeds is one of Britain's most successful cities, with a powerhouse of financial, legal, print and media services and is now increasing in strength in Internet and IT services. Some 50,000 passengers per day use Leeds railway station. Passenger use increased by 18 per cent in the year 2000 and is forecast to grow by 15 per cent per annum for the next few years. A further 50,000 new jobs are expected in Leeds over the next 10 years, of which some 70 per cent will be commuters. It is essential that rail captures a substantial number of those commuters.

Despite that success story and vigorous city growth, improvements to rail services have effectively been frozen for 10 years because of capacity problems at Leeds, with all the problems that passengers recognise. The £200 million investment programme will be a huge boost to Leeds and the travelling public. However, as I shall remark later, investment in a station is not enough.

I should like to comment briefly on the chaos which has occurred. No one using Leeds railway station in recent months is in any doubt that these have been trying and often traumatic times. Whatever the cause, the effects were devastating over Christmas and in January. However, uncertainties and inadequacies of service remain all too frequent. It is not simply a matter of problems with the rail station.

The published self-assessment by Railtrack makes salutary and astounding reading. In an almost Maoist-like recantation of errors, Railtrack admitted to unrealistic commitments (it was too ambitious about what could be realistically achieved); poor communications within the project team—not even with the right people—and with train operators; insufficient time devoted to managing complex interfaces between contractors; an inability to take on sufficient staff with the necessary skills; using untried new technologies with not enough leeway for installation; and insufficient allowance for a spell of wintry weather that was not all that bad by European standards.

The travelling public of Leeds, West Yorkshire and beyond will take a long time to forget and forgive what was a gross litany of incompetence. However, the problems faced by rail travellers in and around Leeds have not all been caused by the station improvement project. The unsatisfactory franchise and performance of what was Northern Spirit and is now Arriva has brought much misery to travellers. The division between track operators and the rail service operator has all too often been used to blame others for problems rather than to take responsibility.

From its original award in 1997 the franchise for rail services in the Yorkshire area was not satisfactory. Northern Spirit was never geared up to deliver the promised services. My own inquiries suggest that there has not been a single day since the award of the franchise when Northern Spirit, now Arriva, has operated a full complement of trains. Typically, the average operating capacity at peak times has been only 80 per cent of the capacity needed and promised under the franchise. The result has been cancelled trains and trains with less than a full complement of carriages. That has resulted in delayed journeys, sardine-like packed carriages and unhappy passengers on many services throughout the area.

I am greatly concerned that the new franchise, which I believe is due to take effect in 2003, is properly specified, properly negotiated and properly established. It will cover a wider northern area. There appears to be no timetable in place for the award of the franchise. There seems to be a real danger of slippage in reaching agreements on the proper specifications of the franchise.

The last thing I want to see is the extension of the current franchise on a year-to-year basis. That would simply freeze investment in new rolling stock and improvements. We urgently need much greater investment in areas such as rolling stock if the potential benefits of the Leeds railway station scheme are to be felt. It would be a great irony if £200 million is invested but passengers still experience train cancellation and huge overcrowding but with no improvement in the frequency of services and no new services.

I hope that the Government will have careful discussions with the Strategic Rail Authority. They must ensure that the targets and requirements of the SRA in awarding the new northern franchise match the public transport objectives of the Government. They must also ensure that the big investment in Leeds station does indeed benefit the travelling public in ways that matter; that is, with more, and less crowded, trains, bringing more convenient and desirable rail services which will help to switch journeys from road to public transport.

8.15 p.m.

Lord Shutt of Greetland

My Lords, I, too, thank my noble friend Lord Greaves for initiating this debate. It is indeed interesting and important to note that the noble Lord, Lord Greaves, a Bradfordian, is now a resident of Lancashire and yet he knows from personal experience the problems of Leeds station. The problems are regional and even beyond the region of Yorkshire.

Such problems have affected the regional economy. I acknowledge the expenditure of £165 million, or is it £200 million? When I first started work in Leeds on 1st January 1959, I arrived at Leeds Central Station. Before my time, there was a third station in Leeds. The amalgamation of the three stations was an important feature. It happened in the post-Beeching era when perhaps there were 500 trains per day to Leeds. Now there are 900. But such a merger, based on no growth, is certainly no good for today.

We have had almost a year's upset and there is a great temptation to have a good moan. For nearly a month at Christmas and in the two weeks up to 3rd March, 7 per cent of trains were cancelled. Only 75 per cent arrived within five minutes of the book time. There has been insufficient rolling stock because of not being able to get paths to the depot at Neville Hill. Even the West Yorkshire PTA is saying that no one seems to be in charge. At times such as the evening peak when people are tired, there is no one to explain what is going on and how things can be solved. Rainwater has now got into the escalators.

A train which is running 15 minutes late becomes half an hour late because there is then no pathing. We now have a situation where 43 trains have been replaced by buses, with the reduced capacity that that involves. One wonders if there is an over-reliance on a large city such as Leeds. I was interested that my noble friend Lord Wallace of Saltaire referred to Bradford. There is no doubt that were the two stations linked in Bradford, that would have assisted some of the work now taking place in Leeds.

It was good to hear the comments of the noble Lord, Lord Berkeley. We are talking about Leeds and the problems with passenger trains, but we must remember the importance of freight on the railway. The noble Lord, Lord Faulkner of Worcester, referred to the fragmented railway. I shall return to that theme. He referred to his own involvement. When I was a member of the West Yorkshire Passenger Transport Authority from 1987–1990, we were constantly receiving papers seeking funds for Leeds West End. That is really the major aspect of what we are now discussing.

It was good to hear my noble friend Lord Bradshaw speak with experience and expertise about how such large projects may be undertaken. It was also good to hear the noble Lord, Lord Woolmer of Leeds, who, as leader of the West Yorkshire County Council in those lamented times had a pro-public transport position.

It was interesting to hear from the noble Lord that the station has 50,000 passengers each day. Historically I think of Leeds as having a population of 500,000 but the new metropolitan Leeds has more than that. The figure is equivalent to 10 per cent of the city moving in and out of Leeds and the noble Lord is right in saying that there must be a proper set-up from 2003.

One of my concerns, which has not yet been aired and which comes back to the fragmented railway, is the disappearance of the loops. For example, a little over a year ago a new service was opened. The Greetland curve was reopened in order to run trains from Halifax to Huddersfield. It has meant that, because of the refurbishment of Leeds station, trains have been able to go into Halifax, come back out using the Greetland curve and still get to Leeds without using the Leeds/Bradford route. Had the curve not existed that operation would not be possible.

The Wortley curve in Leeds, which was ripped up, could have been useful. The link between Neville Hill and Beeston, which was also ripped up, would have been useful. It is a great shame that the sectorisation of the railway, the concern about point-to-point and the lack of a regional and national system have manifested themselves in the problems of Leeds. When one thinks of the refurbishment of Leeds station and the way in which it has been dealt, one goes on to think about the refurbishment of the West Coast Main Line. Will nationalisation have to return to the nation's agenda?

8.21 p.m.

Lord Dixon-Smith

My Lords, this has been an interesting debate. I, too, am grateful to the noble Lord, Lord Greaves, for introducing it. It concerns deep management problems which the railway system as it now operates has yet to overcome. I cannot help but feel that not least of the Minister's joys in replying is that he no longer has direct-line responsibility. He may well conclude that that has a certain advantage.

However, if we are having a general tour around the railway system and its history, we must remind ourselves that it goes back a long way. I remember seeing papers in the bad days of Dr Beeching, if one can put it that way, which could have closed down the whole railway system. As each mile of railway track was closed, the overhead costs remained and were transferred to the rest of the system. As the overhead costs remained, every mile of closure made the cost equation worse for what was left. The last mile of track left in the country would have carried such huge overhead costs that no matter how many trains it carried it could not have worked. That is the background to the issue.

I accept that the Leeds station improvement can only be described as mismanaged and a short-term disaster not just for the city of Leeds but for the whole of West Yorkshire and beyond. If the transport system is interrupted, major difficulties are caused. Despite the problems and chaos, I have sympathy with the words of the noble Lord, Lord Bradshaw. I have sympathy with anyone who tries to improve and upgrade a system while at the same time keeping the system running. That is exceptionally difficult.

The noble Lord, Lord Bradshaw, mentioned the Hatfield tragedy, which occurred at just the wrong time and certainly took a considerable amount of Railtrack's management concentration away from what otherwise would have been its major project during the Christmas period. That does not excuse what happened but it is an explanation for it.

I also had considerable sympathy with what the noble Lord, Lord Bradshaw, said about the need to involve operators in the improvements. It may be a small red herring, but I remember going on an official visit to China many years ago. I was astonished to read in the English language newspapers which they thoughtfully supplied—English being the second language in China—that the head of the local section of the Chinese nationalised railway system had been got rid of—I do not know whether they shot him—because of an incident such as this. One cannot help but wonder and ask how many heads, so to speak, rolled, even if only metaphorically, as a result of the situation.

As all noble Lords have said, the key fact is that everyone must learn from the situation to try to prevent it happening again. Learning from it is quintessentially a management problem and the only people who will seriously do so are "those who dun it". That is not to say that they should be given the responsibility of doing it again; one might feel that that would not be appropriate. However, it is certain that Railtrack must take the lessons seriously on board. The rail regulators must also examine the position carefully, because if Railtrack is in severe financial difficulties and cannot undertake these tasks, which are dependent on a high level of public subsidy, it is clear that the responsibility must be placed elsewhere.

That would represent a signal and major failure for Railtrack and would not be a satisfactory outcome for it or its shareholders. If it does not learn the lesson rapidly, it will be a remarkable thing.

8.28 p.m.

The Minister of State, Department of the Environment, Transport and the Regions (Lord Macdonald of Tradeston)

My Lords, this has been a short but constructive debate, informed by the considerable professional experience of noble Lords. The noble Lord, Lord Greaves, spoke with obvious concern for those passengers and businesses so badly affected by the overrun of the Christmas engineering work. I thank my noble friends and noble Lords for their contributions.

I fully share the concerns about the extent and impact of the disruption which have been clearly articulated in the debate. Indeed, I visited Leeds station to talk to the Railtrack team about the problems they encountered and was close to the other recent problems at Willesden and disruptions at Euston station.

I am encouraged by the emphasis placed during the debate on the need to look forward rather than to recriminate. Much has been said about the mistakes made by Railtrack in carrying out the Leeds First project. The company has rightly stated that the Christmas overrun was unacceptable and has publicly taken full responsibility for that, but with Railtrack we must look to the future. I shall set out how the Government are doing that by working in partnership with Railtrack and other key industry players to ensure that the lessons learnt are applied across the industry to all future major upgrade projects in support of our 10-year plan for transport.

Although delayed, the Leeds First project represents a major reconstruction scheme at one of the main hubs of the national network. It will deliver a bigger and better railway. I understand that the Christmas work was one of its most complex and challenging elements. The £165 million regeneration of Leeds station is, as has been said by noble Lords, the first phase of the multi-billion pound East Coast Main Line upgrade planned for the next 10 years. That project comprises remodelling and resignalling works and the enhancement and expansion of the station's facilities and environment; indeed, it is the biggest engineering project in the region for over 30 years.

The scheme's objectives mirror those of the Government's 10-year plan and integrated transport strategy. The aim is to improve safety, reliability, punctuality and comfort, to increase passenger and freight capacity, and, we hope, to transform the passenger experience. The scheme, I understand, will integrate the station facilities with the wider transport needs of the city and the region through proposals for a bus interchange at the station and links to the supertram, to which we were able to give some backing in recent weeks.

The work at Leeds has been planned and managed so that the station can remain open throughout the project. This has been made possible by Railtrack working in partnership with the passenger transport executive and the passenger and freight operators. I am informed that the project will be substantially complete in December of this year.

The intensive engineering works that overran at Christmas comprised the installation and commissioning of new signalling throughout the station; the connection of new tracks and the renewal of existing ones; and the installation of new overhead lines. I was grateful for the perspective on these matters provided by my noble friend Lord Faulkner. The work was delayed. I know that people in the West Riding are hardy, but for four days running the temperature was minus 10 degrees. I was out on the track myself and felt it to the hone. The work was so tightly programmed and resourced that once slippage occurred it escalated. Contractors were unable to achieve the productivity that was originally planned.

Railtrack h as carried out a thorough review of what went wrong and the lessons to be learnt. The company recognises that it was too ambitious as to what could be achieved in 17 days. Future phases will be more realistically scoped. Indeed, the work planned over Easter was completed on time. The shortfall in contractor productivity highlighted a shortage of resources and skills, particularly in overhead line engineering, right across the industry. I understand that operational communications between Railtrack and the train operators have been strengthened as a direct result of the experience at Christmas.

The rail recovery action group, which I chair, has monitored the disruption and the ensuing review conducted with contractors, suppliers, customers and the Strategic Rail Authority. We have learnt some lessons there, too, because our 10-year plan entails many more projects to rebuild and expand the national network. Therefore, we have strongly urged Railtrack to ensure that it applies the lessons to future upgrades.

Last year the Government made it clear to the rail industry that, for example, training urgently needed to be improved by partnership between industry and government. A particular concern was that very few rail employees currently gain nationally recognised qualifications. In the four years to June 2000, only 24 national vocational qualifications were awarded to train drivers, with an industry total of just 207 NVQs. That cannot be right for an industry which employs tens of thousands of people. Nor can it be right, as noble Lords have said, that we import welders from Scandinavia, signalling engineers from eastern Europe and, as my noble friend Lord Berkeley said, perhaps people who have to return to India, when we are trying to sort out the skills required for a £60 billion investment over the next 10 years. That is why action is now under way to recruit and train people to run an expanding railway system.

The DfEE, working with my department, the SRA and other key stakeholders has created a framework action plan to help push skills further up the agenda of the rail industry. That plan, which was unveiled by DfEE last week, is a balanced package which aims, among other things, to raise the employer commitment to skills; overcome obstacles to recruitment and labour supply; improve training; and improve skills and quality through externally validated qualifications. The plan will focus on a number of key occupations which the industry has identified as critical. These include drivers, signalling and track maintenance engineers, middle management, planners, graduates and professional staff.

The noble Lord, Lord Greaves, made mention of other huge projects. The West Coast Main Line is the biggest engineering project of its kind in the whole of Europe, and the Channel Tunnel rail link is a £5 billion project. We also have road projects in hand. For transport as a whole, under our 10-year plan the DETR, with colleagues in the DfEE, the DTI and the devolved administrations, plan to meet in the near future to ensure that the 60,000 new transport jobs being created by the 10-year plan can be filled. That will involve the new job transition service to try to link wherever possible the available transport opportunities to those affected elsewhere in manufacturing by redundancies.

The Government are committed to getting the railways back into proper shape and providing passengers with an improved service. During the current spending review period—this is a significant change from the past—transport investment is expanding at 20 per cent a year. This increase in public expenditure will now lever in hugely increased private sector investment through public private partnerships. We have learnt from past problems both in failed privatisations and badly run public sector investment projects. Where projects are complex and long term, or the requirements of ongoing maintenance are as big as the construction project itself, the old relationship of private sector as contractor with the public sector as project manager and risk bearer is not the best way forward.

Our commitment to delivering the rail renaissance was emphasised last month when the Deputy Prime Minister announced a new relationship between the Government and Railtrack. This will enable Railtrack to concentrate on its core business of safely sustaining the existing network and improving its asset stewardship while allowing others to participate in the financing of new schemes to enhance capacity.

The new agenda for Railtrack brings more accountability and tougher regulation in the public interest in return for accelerated payment to the company of the £1.5 billion due to it under the Rail Regulator's review of access charges. This establishes key elements of the financial structure needed by the rail industry to accelerate the momentum of our recently introduced 10-year plan. This new pact also paves the way for bringing in third-party finance and project delivery skills to supplement Railtrack, starting with the priority major enhancements. It enables the Strategic Rail Authority to create a new project finance and delivery vehicle, known as a special purpose vehicle (SPV), for the East Coast Main Line upgrade to create valuable new passenger and freight capacity on that key route. That SPV will be led by the Strategic Rail Authority, and its members are also expected to include a project management company, the future train operator, Railtrack and external investors. The new project structure will ensure that the east coast upgrade is delivered and brings together infrastructure and traction providers. It will enable Railtrack to concentrate its efforts more fully on its existing network, which will include the operation of the East Coast Main Line itself during the course of the upgrade.

In the light of its experience at Leeds and Willesden, Railtrack has acknowledged that changes are needed to its relationship with maintenance contractors. It has developed a radical and much more open approach to its suppliers. This has underpinned the development of what it calls "IMC 2000" a new generation of maintenance contracts to replace entirely the ones drawn up in haste at privatisation. The fragmentation of infrastructure maintenance work into 36 separate maintenance and renewal contracts is now being cut down. By 2002, they will be amalgamated into 18 contracts. Those new contracts provide incentives for contractors to do a quality job. In addition to being rewarded with extensions to their contracts, they stand to gain an equal share of any cost saving that they make along the way. The contracts provide Railtrack with increased transparency over maintenance activity, its associated costs and deliverable outputs.

We believe that the new contracts will ensure a more efficient and detailed flow of information about the assets which the contractors are maintaining. That will be linked to the implementation of a new asset management system upon which the Rail Regulator is insisting. The monitoring of the work also benefits from an improved suite of performance indicators covering train performance, track quality and measures of reliability, efficiency and condition of assets.

Railtrack has a vital part to play in modernising the railway. The company now has a financial basis to enable it to plan with some certainty and to concentrate on its core business of safely running, maintaining and renewing the network. Its chief executive has made clear that it must focus on improving its customer service by being realistic and by delivering on its promises.

We have put in place the framework to enable Railtrack and all other key industry players to work together to achieve that. We have also put in place, as noble Lords may know, the ability for a public service non-executive director to be appointed. I shall refrain from describing him as a people's director in this context. After the example offered by the noble Lord, Lord Dixon-Smith, of what the Chinese do to those who run their railways, we may be short of recruits if there is any contagion there.

In announcing last month's statement of principles with Railtrack, the Deputy Prime Minister said that in many ways it represented a fresh start for the railways; a re-focussed, re-structured and properly funded Railtrack which still has a vital role to play. The new agreement aims to enable Railtrack to work more constructively with all its industry partners to bring new confidence to the railways and to deliver the standard of service that passengers rightly expect.