HL Deb 13 May 2004 vol 661 cc388-90

11.22 a.m.

Lord Bradshaw

asked Her Majesty's Government:

When negotiations for the new terms for the West Coast Main Line and Cross Country franchises will be completed.

Lord Davies of Oldham

My Lords, the negotiations for these franchises are complex and there is no fixed deadline for their completion. Intensive discussions between the Strategic Rail Authority and Virgin are progressing, with a view to concluding negotiations as soon as possible.

Lord Bradshaw

My Lords, I thank the Minister for that reply. People will be relieved that there is progress because I believe that the Government had got themselves into an almost impossible position. The problem is that an impractical scheme was agreed between Railtrack and Virgin for the West Coast Main Line and cross-country upgrading. Is not this a case where Virgin and Stagecoach must win because either they have a scheme which is impossible to deliver, or they must be paid a management fee for continuing to operate the service? Does this not mean that taxpayers, passengers and freight customers must be on the losing end?

Lord Davies of Oldham

My Lords, the House would not expect me to disclose the Government's hand with regard to the negotiations with Virgin, which, as I say, are reaching a fruitful stage and will be completed in the not too distant future. The facts of the matter are not quite as the noble Lord has portrayed them. At present the arrangements are on the basis of an annual budget for the service, so it is under clear scrutiny from the rail authority. Of course we are hopeful that the negotiations will result in a franchise that will be based on the principle of all such franchises; namely, value for money for the taxpayer and for the fare-paying public.

Lord Berkeley

My Lords, does my noble friend agree that it is a little odd that the subsidy per passenger on the West Coast Main Line is more than £12 and on the East Coast Main Line the operator pays the Government £1.84? Will my noble friend assure the House that this will be taken into account in the renegotiation of the West Coast franchises and that the best value for money for taxpayers will be achieved on the West Coast Main Line?

Lord Davies of Oldham

My Lords, I shall certainly reassure my noble friend on the second point with regard to value for money. The House will perhaps derive the obvious conclusion from the comparative figures between the operation of the East Coast Main Line and the operation of the West Coast. Necessary investment was put into the East Coast Main Line some time ago, with the result that the services work effectively and have attracted a fare-paying public.

There are problems with the West Coast Main Line, which has been neglected for so long. Let me just say in defence of West Coast Main Line issues that it is the busiest, longest, mixed-traffic railway line in the whole of Europe. As such, it is a very difficult line to modernise—and 80 per cent of the line is being modernised. That does not alter the fact that at present the subsidy from the taxpayer is significant and we shall need to improve that with regard to the future.

Viscount Astor

My Lords, is it still the Government's intention to limit the term of the franchise to seven years?

Lord Davies of Oldham

My Lords, the Virgin franchise runs to 2012. That of course is dependent on the outcome of these negotiations. A position has been entered into, which is now subject to annual review because of the difficulties that are recognised in all parts of the House. Subject to the negotiations being successful and stringent conditions being met as far as concerns the taxpayer, the franchise will run to 2012.

Lord Faulkner of Worcester

My Lords, does my noble friend agree that, notwithstanding the inconvenience to which thousands of passengers have been put by weekend closures and blockades, the SRA deserves considerable credit for at last getting the costs of this project and the timetabling of the works under control? They look as though they will produce some real benefits for the travelling public from this September.

Lord Davies of Oldham

My Lords, I am grateful to my noble friend for that point. It is important that the travelling public are encouraged by the fact that the new timetables, which are due from September onwards, will result in a 30-minute reduction in journeys from Edinburgh and Glasgow to London and in a 20-minute reduction from Birmingham to London. These are significant gains. The reliability of the service will also greatly improve. I am grateful to my noble friend for emphasising that point in his question.